Building a hydrogen-powered economy to cost $15 trillion by 2050: ETC

London (Quantum Commodity Intelligence) - Building a hydrogen-based economy to account for up to 20% of global energy demand will cost $15 trillion over the next 30 years, according to the Energy Transition Commission (ETC), a consortium of leaders from major companies that have committed to net-zero emission targets by 2050.

The report, released Tuesday, estimates that over $12 trillion (85%) of investment will be needed in so-called green hydrogen, electrolysis using renewable energy, while the remainder will need to come from blue hydrogen – fossil-fuel-based production with carbon capture.

"Building a hydrogen economy which accounts for 15 to 20% of total final energy demand, with use increasing 5-7 times from today's 115 Mt, will require very large investments," the report said.

"It is important to realise that by far the largest investments are not in the hydrogen production and use system itself, but in the electricity system required to support a massive increase in green hydrogen production."

The ramp-up of investment is back-ended with annual flows reaching $800 billion per year by the late 2040s to build production and infrastructure.

Hydrogen is often touted as the silver bullet to decarbonising industry and as a way to store and transport renewable energy, but the study shows to get close to accounting for a fifth of energy demand is eye-wateringly expensive.

This figure does not account for the additional investment that is being made by shipbuilders and traders in powering ships with hydrogen and moving away from fossil fuels.

"Those investments might be slightly higher-cost than the fossil fuels-based alternatives in the early stages of the transition – i.e., until economy of scale and learning curve effects are achieved in hydrogen-using equipment manufacturing – and could happen at a faster pace than business-as-usual stock turnover," the ETC said.

The ETC is comprised of leaders from all sectors, including banks, energy companies and carmakers.