Three strategies to revive teetering clean hydrogen dreams

Abstract

A global effort is underway to realize long-held visions of a diversified clean hydrogen (H2) economy. In the United States, the Department of Energy has selected seven clean H2 hub proposals into which it plans to invest $7 billion, along with another $1 billion to stimulate demand for the molecules. Coupled with generous production subsidies, these moves are intended to support early-movers to prove business models, initiate the build-out of distribution infrastructure, and catalyze further scale-up efforts. Major public support programs are also underway in Europe, Asia, the Middle East, North Africa, and Australia. Despite this unprecedented level of public funding, there is a growing risk that follow-on commercial adoption could be mostly limited to substitution in existing uses, new entrants will struggle to gain traction, and private capital will remain on the sidelines for emerging applications. Drawing on insights from senior stakeholders from across the clean H2 value chain and investment community, we explain why the long-term prospects for most clean H2 use-cases remain moribund, and show how public support can address the underlying “system-level” gaps that must also be overcome to truly unlock large-scale growth. In particular, there is an opportunity and need for public support to help resolve three underlying issues: (i) clarifying fit with the broader clean energy ecosystem; (ii) bridging “chicken-and-egg” barriers; and (iii) harnessing incumbency without being captured by it.