Green Hydrogen Costs of Production to Drop to US$2.5/kg by 2030, and US$1.80 by 2040, Clearing the Way for Heavy Industry Decarbonization

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Dec 04, 2024, 08:30 ET

LONDON, Dec. 4, 2024 /PRNewswire/ -- Green hydrogen is emerging as an essential commodity for decarbonizing hard-to-abate industries. Yet, despite its clear sustainability benefits, the high production cost—known as the Levelized Cost of Hydrogen (LCOH)—has, to date, limited both investment in and demand for green hydrogen. However, ABI Research, a global technology intelligence firm, predicts that global LCOHs will reach a cost-competitive level by 2030 and undercut polluting alternatives by 2040, paving the way for industrial adoption.

"With rapid reductions in production CAPEX, mainly driven by increased electrolyzer efficiencies and lower costs, expected by 2027, and the achievement of significant economies of scale across facilities predicted by 2030, global green hydrogen production costs are forecast to drop from an average of US$6-7/kg to approximately US$2.5/kg by the end of the decade. Additionally, by 2040, we expect LCOHs to have reached US$1.80/kg, primarily driven by falling prices for renewable energy. By 2050, green LCOHs will reach around US$1/kg as the market matures," explains Daniel Burge, Research Analyst at ABI Research.

Electrolyzer producers, including ITM Power, Plug Power, Siemens Energy, LONGi, Peric, Thyssenkrupp, and Green Hydrogen Systems, are driving a significant proportion of the CAPEX decline. Supporting technology vendors, such as Danfoss, Schneider Electric, and SunGreen H2, will play a key role in reducing OPEX costs. As for green hydrogen producers, Linde, Shell, Adani Energy, Sinopec, Equinor, and ENI will be vendors to watch as plants reach maturity.

Heavy industries' adoption of green hydrogen will be fundamental to meeting sustainability commitments and net zero targets at the company, national, and regional levels. For aviation, steel, shipping, chemical, and petrochemical industries under pressure to decarbonize, cost is crucial in shaping demand for H2. "The success of projects depends largely on how accurately these costs can be predicted. Subsequently, heavy industry vendors must be keenly aware of when green LCOHs will be reached, and where—and at what time—demand in specific markets will develop," Burge concludes.

These findings are from ABI Research's The Economic Viability of Green Hydrogen for Industry and Enterprises report. This report is part of the company's Smart Energy for Enterprises & Industries research service, which includes research, data, and ABI Insights.

About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research是一家全球性的技术情报公司，拥有得天独厚的优势，充当终端市场公司和技术解决方案提供商之间的桥梁，通过提供独家研究和专业性指导，推动成功的技术实施和提供经证明可吸引和留住客户的战略，无缝连接这两大主体。

For more information about ABI Research's services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific, or visit www.abiresearch.com.

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SOURCE ABI Research