One major obstacle is that the existing terminology used to describe low-emission hydrogen varies among stakeholders and countries, which complicates trade and investment. An internationally agreed methodology for calculating the emissions intensity of hydrogen production could cut financing costs, bring greater visibility for investors, and enable greater economies of scale.
Policy momentum behind hydrogen is certainly building. At the end of 2022, a total of 28 governments had a hydrogen strategy in place, around one-third of which had been developed in the previous two years. Some countries envisage importing large volumes of hydrogen, whereas others are positioning themselves as future exporters in the nascent hydrogen market.
Yet despite these developments, hydrogen demand in 2022 rose around 3% to 95 Mt, with demand concentrated in the refining and industrial sectors, with very limited use in new applications such as industry and transport.
There is an urgent need to create demand for low-emission hydrogen and to mobilise investment in production and supporting infrastructure. To further this aim, the IEA in collaboration with the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) released a report for the G7 Climate, Energy and Environmental Ministerial meeting in April 2023, titled Towards hydrogen definitions based on their emissions intensity.
