The world will probably use a lot less hydrogen in the next few decades than Big Oil would like you to think — and that could cut deeply into their future profits.  That’s one of the biggest takeaways from an in-depth forecast of the energy transition this week by BloombergNEF. By 2050, the report projects, if the global economy is on track for net zero, the world will need about 390 million metric tons of hydrogen annually. That’s about 25% less than the total demand that BNEF projected in the same report last year — and about half of what the main hydrogen lobbying group, whose members include the oil majors and energy services companies like Baker Hughes, hopes to see. The main reason for the steep cut is that BNEF decided to essentially disqualify hydrogen from any role in decarbonizing commercial or residential buildings, because doing so will likely never be cheaper or easier than other options, like electric heat pumps. BNEF also dropped hydrogen as a possible low-carbon fuel for trains, and cut its expectations for how much will be needed for power and other sectors. As renewables, batteries, carbon capture, and other climate tech get cheaper, BNEF’s head of energy economics Matthias Kimmel said, the need for hydrogen is diminishing. |
