Hydrogen has established a key role in the energy transition in dozens of countries around the world. Several of these have developed strategies and roaps with ambitious but challenging targets, one of them is the United States. 4t143m

But according to analysts Wood Mackenzie, U.S. Hydrogen producers will struggle to hit the National Clean Hydrogen Strategy and Roap that was released by the Department of Energy on June 5. 

In a note to clients, Principal Analyst Hector Arreola, said that the Strategy lays a clear trajectory for achieving low-carbon hydrogen production milestones of 10 million metric tons per annum (Mtpa) by 2030, 20 Mtpa by 2040, and 50 Mtpa by 2050. However, she added that despite these efforts, the market has yet to move at the necessary pace to fully capitalize on the production potential outlined in the Strategy. 

“Several factors make meeting these production targets unlikely,” Arreola says. “Renewable power costs, electrolyser load factor, and a slower decline in capital expenditures for electrolytic hydrogen (which is projected to be around US$1,600/kW in 2030) are all serious headwinds for potential new production." 

US low-carbon hydrogen supply | Wood Mackenzie

Arreola added that other factors such as temporal matching, geo-location, and additionality in carbon intensity calculations could substantially impact the level of production subsidies and, consequently, the adoption rate. 

The client note added that Wood Mackenzie research agreed that the Strategy was correct in identifying the importance that sectors such as ammonia, power, and biofuels/e-fuels as being critical to long-term clean hydrogen adoption.  

US estimates of potential low-carbon hydrogen demand by sector in 2050 | Wood Mackenzie

“The level of penetration on each end-use in the U.S. is uncertain and will vary widely due to market forces, decarbonization alternatives, policy , and go-to-market cost,” the expert said.