Further development in national strategies and regulatory frameworks for clean hydrogen is anticipated despite some near-term technical and supply-chain challenges, according to BNP Paribas’ Markets 360 team. In a recent report seen by ESG Investor, the team flagged that the global stocktake at COP28 underlined for the first time that low-carbon hydrogen production should be accelerated alongside other forms of cleantech – including renewables, nuclear power and carbon capture utilisation and storage (CCUS). As of March 2024, 53 markets had established hydrogen strategies, with 30 further markets currently developing strategies. Key markets to watch are the US, with its hydrogen production credits under the Inflation Reduction Act and the largest clean hydrogen production capacity commitments by 2030, and the EU, which launched its first hydrogen auctions through Hydrogen Bank this year. Meanwhile, China continues to dominate in electrolyser supply and deployment, but lacks national targets and subsidy schemes compared to the US and EU. Emerging markets are also projected to become key players in clean hydrogen, with the Middle East expected to become a hydrogen powerhouse by 2050 and exports from South America, Australia and Africa scaling to meet growing demand – particularly in Europe and Asia. The report also stressed the importance of all-round support, with a more robust carbon tax helping to create a level playing field between clean hydrogen and other energy types and bolster project viability. In addition, markets are pushing for more precise definitions of hydrogen types to provide greater regulatory certainty for future projects, while policy momentum is ramping up to support infrastructure.
