American credit rating agency, Fitch rating has found that the countries around the world are speeding up the deployment of green hydrogen across 72 gigawatts (GW) of pipeline projects.
The global credit rating agency stated that the momentum towards hydrogen is fueled by strict pollution control requirements and a step towards a sustainable post-pandemic recovery, as well as a growing number of carbon capture and storage schemes.
Asia is currently leading the pipeline for the hydrogen project, however, Western Europe is expected to see significant activity in the market.
The European Union (EU) through its centralized hydrogen strategy and improved funding package for this year is pushing for 40GW of internal market capacity and 40GW of neighboring market production capacity.
“In addition, of the 46 projects we have captured which have timeframes for completion, 80 percent are targeted for 2025 or sooner,” Fitch Analytics commented.
Western Europe is also projected to see the highest number of project completions with 30 schemes targeted between 2021 and 2030. Fitch Analytics is also seeing an equal increase in the size of projects in line with the rise in the number of such schemes.
Hydrogen is being tested as a promising alternative to fossil fuels, particularly in transportation. Clean hydrogen will minimize greenhouse gas emissions from the hydrocarbons sector by 34 percent, according to BloombergNEF, the UK-based leading research organization.
“We note that projects are growing in size from tens of megawatts to several gigawatts. Of the 76 green hydrogen projects, representing an approximate 72GW, 17 are greater than 1GW in scale. In total, these 17 projects account for 66GW of hydrogen production capacity,” the report said.
Growth is also fueled by several countries in West Asia such as Saudi Arabia and the UAE, pledging to make hydrogen an integral part of their energy mix. The world’s largest exporter of crude, Saudi Arabia has planned to boost hydrogen production. Furthermore, Abu Dhabi has created a hydrogen alliance, backed by key state institutions, to add significant hydrogen capacity to its clean energy targets.