The recent surge in interest by policymakers for low carbon and renewable hydrogen1 reflects a growing recognition of its important role in decarbonizing the energy system. Hydrogen will play a key role in enabling greater and faster integration of renewable energy in the system and fostering greater resilience, cost-efficiency, and optimization at the system level. Going hand-in-hand with electrification, the development of the hydrogen economy is set to enable deep decarbonization worldwide in an effective manner, allowing countries to meet their climate goals, boost green growth, and create sustainable jobs. Over 30 countries have already introduced hydrogen strategies, while industry has announced more than 520 large-scale low carbon and renewable hydrogen projects. While rapid technological learning brings cost competitiveness within reach for some applications, unlocking the full potential of low carbon and renewable hydrogen (defined in the Appendix) requires further policy development. Notwithstanding a very large volume of projects and funding announcements, there remains a significant gap to realize global climate change mitigation ambitions. The full potential of hydrogen requires direct investment of around USD 700bn by 2030. Projects and government support worth USD 160bn have been announced already, leaving a gap of nearly USD 540bn2 . For these investments to take place, the industry needs a clear policy and regulatory framework, and support for scaling up hydrogen solutions, especially during the early market building phase. Coordinating policy and regulatory activity on the one hand with projects and investment activity on the other is key for industry and governments to jointly deliver on the shared climate objectives as soon as possible.
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