BAKU, Azerbaijan, September 26. In 2022, $1 billion invested in projects aimed at producing low-emission hydrogen may not have precisely mirrored the entire market value of the sector, Trend reports.
According to the International Energy Agency (IEA), as the demand for low-emission hydrogen and hydrogen-based fuels continues to surge, annual capital investments in related projects will increasingly align with the total expenditure within the value chains of these projects.
Funds channeled into hardware acquisitions and installation contracts will subsequently flow to suppliers, enabling them to procure necessary inputs, the agency said. The collective value of these sales represents the market worth of the hydrogen and hydrogen-based fuels sector.
This discrepancy arises because certain expenditures on equipment and component factories must precede project spending, the IEA explained. However, By 2030, project expenditures related to the production, transportation, and conversion of hydrogen-based fuels are expected to serve as a dependable indicator of market size.
In the Stated Policies Scenario (STEPS) for 2030, the market size is projected to reach $12 billion, roughly equivalent to the expenditure on offshore wind projects in Europe in 2022. In the Net-Zero Emissions (NZE) Scenario, this market size expands considerably, reaching $117 billion, which is roughly on par with the market for rooftop solar PV installations in the Asia-Pacific region in 2022.
When considering hydrogen-based fuels, the pricing strategy to attain specific proportions of sustainable aviation and maritime fuels could potentially be determined by the marginal international production expenses. According to the IEA, this approach might result in substantial variations: assuming that the average worldwide price for hydrogen, including expenses related to its transportation, storage, and distribution, amounts to $3 per kilogram in 2030, the total market valuation in the NZE Scenario would reach $200 billion. However, if this price were to increase to $7.5 per kilogram in 2030, the market valuation would subsequently escalate to $500 billion.
