Even with this progress, engineering challenges and gaps in the hydrogen value chain remain.
To better understand the current landscape—and where things are headed—Eric Cohen, Head of Green Economy Banking for JPMorgan Chase Commercial Banking, North America, spoke with physicist Lindsey Motlow, Senior Research Associate, Energy Transition and Sustainability at Darcy Partners.
Q&A
Cohen: How would you characterize the state of the hydrogen market today?
Motlow: In 2023, we saw a heavy focus on production and a gap in infrastructure investments. We also saw a limited uptake of green hydrogen in existing markets.
That said, 2023 brought a lot of projects and policies from the planning phase to construction and realization. We also saw a big focus on more investment—exceeding $330 billion—in giga-scale low-carbon hydrogen projects.
2023 was also a great year for learning. With more projects, pilots and feasibility studies breaking ground, passing through complex permitting and regulatory channels, EPC [engineering, procurement and construction] engagement, and enabling component procurement, Darcy Partners published new findings from these first-of-a-kind projects that can help guide future progress and strategic planning and investment for everyone in the industry.
Cohen: You mentioned policy. What major developments in the past year are worth calling out?
Motlow: Policy and regulation development are a huge part of ensuring the success of a “clean hydrogen economy.”
In June 2023, the U.S. Department of Energy (DOE) released the U.S. National Clean Hydrogen Strategy and Roadmap, which outlines the country’s approach to clean hydrogen. The DOE also released an updated guidance document containing a proposal for the Clean Hydrogen Production Standard (CHPS) to meet the requirements of the Infrastructure Investment and Jobs Act of 2021. The updated guidance establishes a target of 4.0 kilograms of carbon dioxide-equivalent emissions per kilogram of hydrogen (kgCO2e/kgH2) for life-cycle greenhouse emissions associated with hydrogen production.
Meanwhile, the European Union’s Clean Hydrogen Joint Undertaking further narrowed its focus on research and innovation activities related to the production, distribution, storage and end-use applications of clean hydrogen—in line with the European Green Deal and the EU Hydrogen Strategy.
Cohen: What progress are you seeing when it comes to infrastructure development?
Motlow: The DOE has been working to drive infrastructure development and stimulate demand for hydrogen with the announcement and launch of its Regional Clean Hydrogen Hubs Program. Other countries have launched similar funding opportunities and initiatives, pushing for scale-up and development of infrastructure solutions down the full hydrogen value chain.
Cohen: Where are there knowledge gaps for people working in the hydrogen space? How is Darcy helping to fill them?
Motlow: Our research model takes input from our members and uses their strategic priorities to inform where we can best provide insights. Many of the hydrogen knowledge gaps are the same across industries, whether the Darcy customer is in oil and gas, utilities or private equity.
And there’s no question about it: The pull from our customer base on hydrogen is significant. One quarter of all the questions we’ve received in the past year have focused on hydrogen specifically. Some of the production-related topics we’ve researched include distributed hydrogen production, methane pyrolysis, waste-to-hydrogen technology, hydrogen electrolysis and lowering the carbon intensity of blue hydrogen production. Meanwhile, our focus on engineering challenges and solutions down the value chain has included studies in storage and transport, hydraulic modeling of hydrogen and hydrogen blends, compatible materials and solutions for pipelines and stationary storage, and opportunities for connective infrastructure development.
Cohen: What are your current research priorities?
Motlow: When it comes to hydrogen, we are spending a lot of time in 2024 on a few key areas: enabling technologies, green ammonia, geologic hydrogen, and offtake and end-use markets. But our research, tech scouting and market intelligence services go beyond hydrogen and the broader energy transition. Our team produces impressive insights each week across the energy complex for oil and gas, utility and industrial customers seeking to deploy and de-risk new technology.
