With population growth and rising living standards, the global community is placing increasing demands on resources and moving towards a more sustainable future is imperative. In the process, China and the world will face a surge in energy demand. Renewable energy is an important way to move towards net zero emissions, but it is not the only solution. The hydrogen economy will play a key role, with hydrogen expected to meet about 20% of global energy demand by 2050. Opportunities in hydrogen include green and low-carbon hydrocarbon production, hydrogen storage and delivery, carrier liquids such as ammonia and methanol, as well as end-user fuel cells, hydrogen/natural gas mixtures, and green ammonia for fertilizer. All of this is driving significant investment in research and development, as well as capital investment projects in Asia and globally, resulting in an accelerating hydrogen economy. However, there are some obstacles to overcome.

In his recent book on climate solutions and breakthroughs, Bill Gates talks about the “Green Premium,” arguing that paying higher prices for green energy will be the future, but that we must and can eliminate this additional cost. Gates believes that by investing trillions of dollars to accelerate innovation and breakthroughs, we can potentially reduce and eliminate the green premium.

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According to a recent McKinsey report, hydrogen is expected to contribute more than 20% of global carbon emissions reductions by 2050. According to H2 Tech magazine’s (Gulf Publishing Co.) Global Energy Infrastructure Database analysis, as of June 2023, there are 1,886 hydrogen projects in the world, of which 47 are what the Hydrogen Council calls Giga-Scale projects. According to HSBC Global Research, China’s green hydrogen projects (in terms of capacity) doubled from October 2022 to March 2023: the capacity of green hydrogen projects under construction or in the planning stage increased from 700,000 metric tons to 147 million metric tons. Current global hydrogen production is about 100 million metric tons per year, most of which is used in oil refining and chemical processes for domestic use. The World Bank predicts that this figure will grow by more than 9% per year for the next seven years, and that world hydrogen production will reach 500-680 million metric tons per year by 2050.

Rate of progress

In 2003, the United States and Europe reached an agreement on cooperation to accelerate the development of a hydrogen economy. Today, the United States is investing heavily in several regions, including $1 billion this year alone to promote the commercialization of electrolyzed water and $8 billion to build hydrogen energy centers in four regions, which is finally being achieved. However, as the World Bank, the International Hydrogen Council, the International Energy Agency, McKinsey and others have pointed out, there are still some challenges that need to be overcome to bring the global hydrogen value chain to scale and implement related projects.

The biggest obstacle is the economics of hydrogen production, transportation and utilization. According to the International Renewable Energy Agency (IRENA), hydrogen is currently two to three times more expensive than fossil fuels, not including the cost of carbon emissions. The cost of hydrogen pipelines is 10 to 50 percent higher than that of natural gas and oil pipelines. However, digital technology will quickly reverse this situation. Aspen creates a sustainability path that supports the hydrogen economy and makes it easier to deploy key leading digital technologies to drive innovation, execution and scale of hydrogen projects along the entire value chain, from renewable energy to hydrogen production to storage and end use.