Hydrogen has a critical role to play in a clean energy transition to achieve net zero emissions (NZE). Global demand for hydrogen is set to increase rapidly and substantially from about 94 Mt/y in 2021 to more than 500 Mt/y by 2050. Meeting this demand, in particular, for low-emission hydrogen will require the rapid scaling up of its production capacity in a short period of time from less than 1 Mt/y clean hydrogen in 2022 to 32 MtH2/y in 2030 in the IEA’s Stated Policies Scenario.
Clean hydrogen can come from renewable-powered water electrolysis, coal gasification with carbon capture, utilisation and storage (CCUS) and natural gas steam methane reforming (SMR) with CCUS. Although coal gasification-based hydrogen production is the most carbon-intensive, the addition of CCUS could reduce CO2 emissions substantially to a level comparable to that of natural gas SMR with CCUS. When the best available technologies are adopted, hydrogen production from coal gasification with CCUS can have life cycle environmental impacts similar to, or slightly larger than, the production of renewable hydrogen.
Developing and adopting renewable hydrogen faces several challenges. The high cost is the main barrier to hydrogen utilisation. There is also a requirement to invest in enough renewable energy to make the hydrogen, and in the infrastructure to store and transport the hydrogen produced. The global demand for clean hydrogen cannot be met by renewable hydrogen production, at least in the near to medium term. Therefore, low-emission hydrogen production from coal and gas with CCUS is essential to bridge the gap. Hydrogen production from coal gasification with CCUS costs significantly less than renewable electrolytic hydrogen. This report examines the regional variations in hydrogen demand and supply and the role of coal in helping to meet the demand for clean hydrogen. Producing low-emission hydrogen from coal with CCUS will be a low-cost option in regions with abundant coal, access to CO2 storage and limited renewable energy availability. Particularly for emerging and developing economies that depend on coal and lack gas and oil resources, coal is indispensable in providing a secure, reliable energy supply and an affordable source for clean hydrogen production