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Global hydrogen demand is expected to grow significantly in the coming years. Looking at the 2020 to 2025 period, the hydrogen market is projected to grow at an average CAGR of 9.2%. This means a market increase of US$71 billion, from US$130 billion in 2020 to US$201 billion in 2025.
In the same period, the Asia Pacific hydrogen market is expected to grow at a CAGR of 10%. The market is currently worth US$93 billion and is a key focus for Australia along with its western partners.
The growth in hydrogen demand and generation is predominantly driven by the increasing global push for clean energy, the need to minimise greenhouse gas emissions, long term power storage, mobile energy generation, and the rising use of hydrogen fuel cell vehicles and aircrafts.
Australia is well placed to become a significant player in the Asia Pacific region and provide quality hydrogen to meet increasing demand. This is due to a combination of drivers, such as the rising demand in the region and geographic proximity to a high growth market.
For this reason, we can expect to see the development of countless green hydrogen companies in Australia a nd across the world.
With the commitment to full decarbonisation by 2050, among Australia’s western trade partners, hydrogen is predicted to become a leader in the global energy market. Australia is well placed to capitalise on the forecasted growth in the hydrogen market. Known for exporting high-quality resources, Australia is set to become a leader in green hydrogen production for buyers in the Asia Pacific and in a global context.
To support the emerging hydrogen export industry, the Australian Commonwealth has developed a National Hydrogen Strategy. The strategy provides a roadmap to capitalise on the potential of this growing market. Key opportunities outlined in the document have been categorised into domestic and international exports
It’s been estimated by multinational American engineering firm, AECOM, that the average cost of electricity produced by diesel generators in regional and remote communities is AU$450 per MWh. Using hydrogen this can be reduced to approximately AU$100 per MWh. That is a significant saving and an early opportunity for hydrogen to enter the market.
Hydrogen can also replace another non-renewable resource – natural gas. Syngas is an extremely rich form of hydrogen that can easily be used in place of natural gas while also being more cost-effective. Experts estimate the syngas market will be worth US$66.5 billion by 2027.
Hydrogen vehicles were launched to the market a few years ago, however, uptake has been limited for a variety of reasons. With the most recent push towards decarbonisation and big names such as Toyota and Hyundai investing in refuelling stations, it is expected that hydrogen vehicles will be normalised in the near future.
Hydrogen production in Australia is expected to generate over AU$10 billion for the local economy by 2040. This is driven by high demand from large trading partners such as Germany, Japan, United Kingdom, South Korea, Italy, France and China.
According to the CSIRO, Australia is expected to export significant amounts of hydrogen to South Korea, China, Japan and Singapore. Hydrogen demand from these trade partners alone will be approximately 3.8 million tonnes by 2030. Japan is predicted to be importing up to 10 megatonnes per year by 2050.
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