The latest update of BP’s Energy Outlook 2023 highlights that hydrogen will have a minimal role in the decarbonization of light vehicles and heating for buildings. However, it will play an important role as a clean fuel for industry and heavy transport. The report emphasizes the increasing dominance of electricity, particularly through heat pumps, in the residential and commercial heating sector, with a limited role for hydrogen. In the case of light vehicles, the share of hydrogen as a fuel is projected to be zero, with the majority relying on electricity directly. The report also examines the role of hydrogen in aviation, shipping, and heavy industry, showcasing its potential as a low-carbon solution in these sectors. Overall, the report underscores the need for a balanced approach between electricity and hydrogen in achieving net-zero emissions.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Minimal role of hydrogen in light vehicles and heating | Shift from hydrogen to electricity for light vehicles and heating | Heat pumps electrify buildings and less reliance on hydrogen | Efficiency and cost-effectiveness of heat pumps |
| Hydrogen important clean fuel for industry, heavy transport | Increase in the use of hydrogen for industry and heavy transport | Greater adoption of hydrogen for industrial processes and transportation | Need for clean fuel alternatives in heavy industries and transport |
| Limited role for hydrogen in aviation | Limited use of hydrogen as fuel in aviation | Sustainable aviation fuel (biofuel) drives decarbonization | Slow turnover of current liquid-fuel based fleet |
| Hydrogen-derived fuels in shipping | Hydrogen-derived fuels (ammonia, methanol) in shipping industry | High adoption of ammonia and methanol as maritime fuels | Cost and handling challenges of ammonia |
| Hydrogen’s role in heavy industry | Use of hydrogen for heavy industry, particularly iron and steel | Low-carbon hydrogen as energy source and reducing agent | Need for low-carbon alternatives in heavy industry |
| Hydrogen’s role in other industries | Limited role of hydrogen in non-heavy industries | Direct electrification and bioenergy dominate in other industries | Greater use of electricity and bioenergy in non-heavy industries |
| Total global demand for hydrogen in net-zero scenario | Increase in demand for hydrogen as clean energy source | Demand for green and blue hydrogen reaches almost 300 million tonnes | Transition towards decarbonization and clean energy sources |