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Hydrogen’s critical role in the energy transition

By February 5, 2021November 28th, 2021No Comments

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Hydrogen’s critical role in the energy transition

Feb 5, 2021 • Wood Mackenzie

A US$1 trillion silver bullet for hard-to-decarbonise industries?

Low-carbon hydrogen has a tiny share of the global energy market today. Investors, though, are betting on the long-term potential of this super-versatile energy carrier. Shares with meaningful exposure to hydrogen have been among the best performing in the bull run of energy transition stocks these last few months. Green hydrogen, produced by electrolysis of water using renewable electricity, is what most of the fuss is about.

Most developers and investors are still at the very early stages of working up a hydrogen strategy. I asked Ben Gallagher, our lead analyst on emerging technologies, how he sees the opportunity.

First, a dramatic policy shift in the last few months has lit the fuse. The announcement of net-zero targets from China (2060), Japan, South Korea and Canada (all 2050) and the Biden administration recommitting the US to the Paris Agreement show policy momentum to tackle global warming is now unstoppable. The world is pivoting towards decarbonisation and that’s bullish for zero-carbon technologies like green hydrogen.

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