Four out of five people involved in the hydrogen space believe that effective carbon pricing regulations are necessary before the sector can scale up, according to a new report by DNV.

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The risk management company’s wide-ranging study, Rising to the Challenge of a Hydrogen Economy: The Outlook for Emerging Hydrogen Value Chains, from Production to Consumption, surveyed 1,124 workers in the grey, blue and green H2 sectors, and found that 80% believe carbon pricing is needed in order to make blue and green hydrogen cost-competitive with cheaper but highly polluting grey H2.

Almost half of the respondents — who came from a wide range of sectors, including oil & gas, power, transport, heavy industry and finance — said that establishing the right regulations was among the most important enablers of a hydrogen economy by 2030, followed by carbon pricing (42%), larger and lower-cost electrolysers (38%), and national hydrogen strategies (37%).

DNV also asked respondents what they thought were the greatest risks in progressing the hydrogen economy, with three potential answers receiving a joint-top 38% of the vote — the high cost of green and blue H2, regulatory changes or lack of required legislative frameworks, and a lack of investment in hydrogen infrastructure.

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At the same time, 71% of respondents said that current hydrogen ambitions — such as the EU’s plans for 40GW of electrolysers producing green hydrogen by 2030 — underestimated the practical limitations and barriers to adoption.

A bull market

But respondents were generally bullish about the prospects for hydrogen growth in the coming years. Almost three quarters said the outlook for H2 had improved significantly over the past 12 months, with 67% believing it would continue to improve significantly in the coming 12 months.

Some 64% said that hydrogen would account for more than 10% of their company’s revenue or spending in 2030, up from 8% today. And while only 2% said hydrogen would account for more than 50% of their company’s revenue or spending in 2021, 26% said this would happen by 2030.

Interestingly, the respondents’ top drivers for involvement in the hydrogen sector varied widely, perhaps reflecting the breadth of the sample group.

Only 54% said profitable business opportunities were the leading driver for their company’s involvement in hydrogen, followed by an ethical conviction on the need to contribute to a net-zero energy system (46%), the need to replace a carbon-intensive part of the business (46%), opportunities to store renewable energy (38%), creating new uses for existing infrastructure (36%), regulatory/government pressure to decarbonise (33%), pressure from shareholders/investors to decarbonise (23%), government subisidies or other incentives (23%), societal pressure and public perception of our brand (21%), and the opportunity to maintain a market for fossil fuels (18%).

A total of 84% of respondents believe that hydrogen has the potential to be a major component of a global, low-carbon energy system; 73% said that the Paris Agreement targets would not be achievable without a large-scale hydrogen economy; and 74% said it would be impossible to reach net-zero emissions by 2050 without H2.