THP-E121: The International Energy Forum’s Hydrogen Report And My Thoughts On Where I Think The Impacts Will Be. Part 1

June 13, 2022 • Paul Rodden • Season: 2022 • Episode: 121

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Welcome to The Hydrogen Podcast!

The International Energy forum releases their report on the hydrogen market. It’s a huge deal. And I start to talk about it today on the hydrogen podcast.

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Paul Rodden



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The International Energy forum releases their report on the hydrogen market. It’s a huge deal. And I start to talk about it today on the hydrogen podcast.

So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen. And this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.

Okay, so if you haven’t heard, the IEF, or the International Energy forum, has released a comprehensive insight report that they’ve titled scaling up the hydrogen market. The report was written by Mason Hamilton, Allyson Cutright and Anne-Sophie Corbeau. And before we get into the bulk of the podcast, I think it’s important to tell you what the IEF is. Well, the IEF is the world’s largest international energy organization. They have members from 71 countries and include both producing and consuming nations. The IEF has a broad mandate to examine all energy issues including oil and gas, clean and renewable energy sustainability, energy transitions, new technologies, data transparency and energy access.

Through the forum and its associated events, officials, industry executives and other experts engage in dialogue of increasing importance to global energy security, and sustainability. So for my coverage today on the International Energy forums report on the hydrogen market, I’m going to focus on their executive summary and then give my thoughts on where I think the impacts will be. And so starting off the summary, there first heading is where are we headed, and the first bullet point is this low carbon energy sources and carriers will need to replace high carbon ones to meet growing energy demand during the energy transition. Many energy forecasts expect hydrogen to play a vital role in decarbonizing the energy system, particularly in hard to abate sectors where the electrification is impossible, such as high temperature industrial processes, heavy road transportation and shipping. Hydrogen is also expected to play a role as a source of flexibility in the power sector. The next point they make is this, the current energy crisis is likely to accelerate hydrogen market development.

Europe has quadrupled its low carbon hydrogen supply target for 2030 from 5.6 million tonnes per year to 20 point 6 million tonnes per year as part of its RE power EU strategy to reduce reliance on Russian natural gas over 500 large scale projects had been announced in the last two years, and over 50% of those have just been announced in the last year. The third point they make is that the hydrogen market will likely develop in several phases, and over several decades, from one local point to point transactions to two isolated bilateral trades to three larger contracted international deliveries and then to four a potentially globally traded commodity. The market will move from localized to regional to international and interconnected but the pace of development will differ across regions and sectors. And lastly, they say that However, despite playing a role, hydrogen is not a silver bullet for achieving decarbonisation goals or energy security. In many cases, it is the second best solution. Direct electrification is more efficient in many applications, policies and business models need to target supply chains that make the most sense technically, and financially. Okay, and then the next section that to talk about is how do we get there. Their first point is this, the hydrogen market is still in its infancy and development is needed along the entire supply chain. low carbon hydrogen production and utilization must increase from about 1 million tonnes per year, that being today to hundreds of tonnes by 2050. market growth will involve expansion and development and production at transportation, storage and in use.

Scaling up hydrogen will require new business models pricing contracts, regulations, standards, certificates, and policies. The second point they make is the first immediate step will be to replace hydrogen made by unabated hydrocarbons with low carbon hydrogen. This will remove the challenge of creating new demand while reducing co2 emissions from unabated hydrocarbons in the hydrogen production. The third bullet point, hydrogens high cost relative to its alternatives is the most significant obstacle to market development today, costs will need to decrease significantly during the coming decade. Production from renewables is currently around three to $8 per kilogram, which is equivalent to 26 to 70 MMBtu LHV. Policy support is key to lowering production costs and incentivizing consumers to switch to hydrogen. Different tools will be at the disposal of policymakers, including contracts for differences, production tax credits, carbon pricing and carbon neutrality targets for specific sectors.

Their next bullet point is that international partnerships will be an essential component of developing the hydrogen economy, providing offtake certainty and enabling scale, broad based collaboration within and across industries and governments will be needed as well as a commitment to capital and sharing resources and technology. In addition, partnerships will help facilitate long term contracts that will be key in scaling up accessing financing and establishing proven business models. Next is that hydrogen development is primarily a means to support decarbonisation. Future hydrogen markets and trade rules will have to consider the carbon intensity of hydrogen and any carriers or derivatives. The hydrogen market will be based on carbon intensity and not colored designations. Therefore, measuring and tracking carbon intensity needs to be standardized, and corresponding certifications and guarantees of origin will be essential elements in enabling international trade.

Next, there’s a value in studying the development of business models used in the renewables and LNG sectors. Lessons from the evolution of these sectors can support the scale of hydrogen and serve as a model for the formation of initial long term contracts, such as including modified take or pay commitments to support projects capex that are adapted to specifications of hydrogen development. Next, despite parallels between hydrogen and other market development pathways, such as natural gas and LNG regulations should not be systematically imposed in the same way, especially in the early stages. There’s room for innovation and hydrogen technology and business models that over regulation could hinder. Regulation that is fit for purpose can help mitigate risk inherent in a new market, providing regulatory certainty will be essential to attract investment early on. However, a delicate balance is needed to leverage hydrogen and the energy transition but also ensure hydrogen becomes competitive and cost effective.

Next is that energy policies should remain technology neutral to allow accelerators that leverage public finance rather than crowded out. technology neutral funding will help enable a faster market launch and long term cost efficient supply. Their next point is that hydrogen molecules have an important advantage over electrons that can transfer energy over time and distance and be stored more efficiently. Hydrogen can unlock otherwise stranded energy assets such as remote and isolated renewable energy sites. It can connect places with ample renewable energy resources, but no effective means of delivering it to market with concentrated demand hubs, Infrastructure and Transportation developments will be needed to unlock these arbitrage opportunities. And the last point in the executive summary is this hydrogen market data is currently limited and lacks standardized definitions and conventions, greater data transparency and standardization are needed to empower analysts, investors and policymakers to make informed decisions. And there you have it, the executive summary from the IEF hydrogen Market Report.

Now let’s look back on some of these key points. I think one of the first things to focus in on is what they’re talking about, in the first part, under where are we headed, and the reliance on Russian natural gas. Now that’s obviously a huge factor, especially with the war going on. But when it comes to hydrogen and its derivatives, such as ammonia, we need to broaden our field of view and realize that it’s not just Russian natural gas that’s harming the hydrogen and derivative supply chain. Because of their attack on the Ukraine, the world will be facing an ammonia shortage, because the Ukraine is so effective in supplying the world with ammonia. And as we all know by now, hydrogen is a key component in ammonia, which is a key component in fertilizer. So with Russia and the Ukraine, effectively off the board for supplying the world with hydrogen and ammonia, the world is already at a deficit for fertilizer, which means that we could be facing a pretty nasty crop shortage globally, this fall and next spring, and something that they said that I can’t reinforce enough is that energy policies need to remain technology neutral.

And so more than focusing in on a specific technology, or group of technologies for developing hydrogen, they need to focus in on the carbon impact, the global carbon impact and the full cycle carbon impact of hydrogen development. And since I’m running out of time, the last thing that I’m going to focus on is something that hits close to home. And that’s that the data surrounding the hydrogen industry needs desperately standardization. We need full cycle transparency in hydrogen development, so that analysts investors and policymakers can look at this data to make proper investment decisions. All right, that’s it from everyone know, we’re going to be diving more into this later on in future podcasts. So stay tuned.

But in the meantime, if you have a second, I would really appreciate it if you can leave a good review on whatever platform it is that you listen to Apple podcast, Spotify, Google, whatever it is, that will be a tremendous help to the show. And as always, if you ever have any feedback, you’re always welcome to email me directly at And as always, take care. Stay safe. I’ll talk to you later.

Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at Thanks for listening I very much appreciate it. Have a great day.