Sunday Thematic & Weekly Recap

The Hydrogen Economy Will Change the World, But Slowly and Not As Currently Expected
May 26, 2024
Commodities Mentioned:
Hydrogen, E-Fuels, Ammonia, Ethylene, Water, Polyethylene
Companies Mentioned:
Dow, NetPower, DuPont, Freeport LNG, Texas LNG, Glenfarne, LSB Industries, CF Industries, Air Products, OCI, Linde, Issaquena Green Power ExxonMobil, LyondellBasell, SABIC, Corteva

C-MACC Sunday Thematic and Hydrogen Weekly

The Hydrogen Economy Will Change the World, But Slowly and Not As Currently Expected

  • At the right price the demand for clean hydrogen could be well above estimates, but the major challenge is meeting that “right price” goal. Progress will be slow and new sources and routes to hydrogen are needed.
  • Today, costs are the major challenge for green hydrogen, and subsidies need to be both higher and less complex to prevent the industry stalling for many years – for blue hydrogen, we need more acceptance and offtakes.
  • Decarbonizing industry is likely to be one of the most significant engineering and economic challenges of the next 30 years, and a recent RFI from the DOE suggests that we need more ideas than we have now.
  • As noted in our Sustainability Report on Friday, weather is beginning to get a lot more attention, and while this may drive a more global focus, things will likely need to get much worse first – the US is moving backwards.
  • Otherwise, too much optimism in ethylene, the forward market squeeze on US margins, DuPont’s split, what a bad hurricane season could do for prices now, and the unintended consequences of a $1/kg hydrogen target.

Exhibit 1: At the right price, the World could use a lot of hydrogen.

Source: Bloomberg, C-MACC Analysis, May 2024

See PDF below for all charts, tables and diagrams

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