The IEA – Doing A Good Job of Showing What is Not Possible

Key Points

In its annual update, the IEA shows just how far hydrogen progress is from estimates of what a pathway to net zero requires by 2030 – the chart below has driven plenty of equipment investment but not much hydrogen.
In the light of worse storms and unusual weather patterns, we should be working on what we can do quickly to mitigate climate change and how to deal with changes in motion, not how much hydrogen we can make.
Hydrogen is part of the answer, but accepting that we cannot meet the extreme right target below, regardless of how much money we spend, should change the focus. More natural gas-based hydrogen makes more sense.
We note below that some equipment makers are making substantial moves to cut costs. However, electrolyzer overcapacity is still growing, and project cancellations suggest that order books do not tell the whole story.
We look at another week of limited project announcements; some brighter news for blue ammonia, unless you are Air Products; and we note that batteries are getting cheaper, but the gap between the US and China is wide.

Exhibit 1: As we noted last week, it is not about demand, it is about price. At the right price demand will be there.