Fuel Production:

Hydrogen

Global demand for hydrogen fuel is expected to reach over 400 million kilograms (kg), the equivalent in energy content of 400 million gallons of gasoline, annually by 2020.

With an estimated 31 million metric tons produced globally in 2011, hydrogen is widely used, in both liquid and gaseous form, and represents a large and mature industry. Hydrogen is used primarily for its chemical properties as an industrial gas; direct fuel use applications are still a very small portion of the hydrogen industry. Among direct fuel use applications, hydrogen can be used in fuel cells for transportation (e.g., buses, forklifts, light duty vehicles), and in stationary uninterruptible power supply (UPS) units, which make up the majority of commercial energy-related hydrogen sales today. There is also potential for use in scooters, locomotives, aircraft, and other applications, but these are not likely to see large-scale use in the short-term. It should be noted that hydrogen is technically an energy carrier, which means that, like electricity, it must be produced from some other primary energy source.

Hydrogen fuel production market data is not included in this analysis, but to provide a sense of the opportunity, global demand for hydrogen fuel is expected to reach over 400 million kilograms (kg), the equivalent in energy content of 400 million gallons of gasoline, annually by 2020. This reflects a forecasted 2010–2020 CAGR of 88% globally. Cumulative demand is projected to be relatively low – less than 50 million kg – from 2010 through 2014, driven primarily from the forklift sector in the United States and Canada. In 2015, demand is projected to reach an estimated 55 million kg, accelerating based on growth in the use of hydrogen in light duty vehicles (LDVs) and continued strong demand in the forklift sector.

Hydrogen fuel development for passenger cars is constrained by the chicken-egg problem between hydrogen fuel cell vehicle manufacturers, hydrogen fuel producers, and hydrogen fueling infrastructure companies. A joint approach to reduce risk among the three groups is required, such as that taking place currently in Germany and Japan where automakers are collaborating with fuel providers to build infrastructure that can meet hydrogen demand when commercial fuel cell vehicles are introduced in 2015.