The Future of Hydrogen |
Chapter 3: Storage, transmission and distribution of hydrogen |
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The Future of Hydrogen |
Chapter 3: Storage, transmission and distribution of hydrogen |
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IEA. All rights reserved.
The Future of Hydrogen |
Chapter 4: Present and potential industrial uses of hydrogen |
Chapter 4: Present and potential industrial uses of hydrogen
•Hydrogen use today is dominated by industrial applications. The top four single uses of hydrogen today (in both pure and mixed forms) are: oil refining (33%), ammonia production (27%), methanol production (11%) and steel production via the direct reduction of iron ore (3%). Virtually all of this hydrogen is supplied using fossil fuels. These existing uses of hydrogen underpin many aspects of the global economy and our daily lives. Their future growth depends on the evolution of demand for downstream products, notably refined fuels for transport, fertilisers for food production, and construction materials for buildings.
•More than 60% of hydrogen used in refineries today is produced using natural gas. Tougher
air pollutant standards could increase the use of hydrogen in refining by 7% to 41 MtH2/yr by 2030, although further policy changes to curb increases in oil demand could dampen the pace of growth. Current global refining capacity is generally thought sufficient to meet rising oil demand, which implies that the majority of future hydrogen demand is likely to arise from existing facilities already equipped with hydrogen production units. This suggests an opportunity for retrofitting CCUS as a suitable option to reduce related emissions.
•Demand for ammonia and methanol is expected to increase over the short to medium term, with new capacity additions offering an important opportunity to scale up low-emissions hydrogen pathways. Greater efficiency can reduce overall levels of demand, but this will only partially offset demand growth. Whether via natural gas with CCUS or electrolysis, the technology is available to provide the additional hydrogen demand growth projected for
ammonia and methanol (up 14 MtH2/yr by 2030) in a low-carbon manner. As a priority, substituting low-emissions pathways for any further coal-based production without CCUS would significantly help cut emissions.
•In the longer term, steel and high-temperature heat production offer vast potential for lowemissions hydrogen demand growth. Assuming that the technological challenges that currently inhibit the widespread adoption of hydrogen in these areas can be overcome, the key challenges will be reducing costs and scaling up. In the long term it should be technically possible to produce all primary steel with hydrogen, but this would require vast amounts of lowcarbon electricity (around 2 500 TWh/yr, or around 10% of global electricity generation today) and would only be economic without policy support at very low electricity prices.
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IEA. All rights reserved.
The Future of Hydrogen |
Chapter 4: Present and potential industrial uses of hydrogen |
Most hydrogen today is used in three industrial sectors: oil refining, chemicals and iron and steel. Production of hydrogen to meet the needs of these sectors is at a commercial scale and is almost entirely from natural gas, coal and oil today, with associated environmental impacts. However, the technologies are available to avoid the emissions from this fossil fuel use by producing and supplying low-carbon hydrogen. In some cases these alternatives are already deployed where policy and economics are supportive. Table 4 provides an overview of the current and likely future industrial uses of hydrogen.
This chapter explores how hydrogen is currently used in the refining, chemicals and iron and steel sectors. It reviews the current trends for hydrogen demand in these sectors and the options for addressing the emissions related to supplying hydrogen for these existing uses. It concludes with a discussion of the ways in which significant new markets for hydrogen in industrial applications could emerge if hydrogen were used to satisfy a much higher share of the inputs to steelmaking globally or as a source of high-temperature heat with no direct emissions.
Table 4. |
Summary of hydrogen use in industrial applications and future potential |
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Current |
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2030 |
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Long-term |
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Low-carbon hydrogen supply |
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Sector |
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hydrogen |
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hydrogen role |
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demand |
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Opportunities |
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Challenges |
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demand |
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Hydrogen |
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Used primarily |
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7% increase |
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Retrofit natural |
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production and |
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to remove |
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under existing |
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Highly |
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use is closely |
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gas or coal- |
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impurities (e.g. |
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policies. |
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dependent on |
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integrated within |
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based hydrogen |
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sulphur) from |
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Boosted by |
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future oil |
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refining |
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with CCUS. |
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crude oil and |
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tighter |
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demand but |
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operations, |
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Replace |
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upgrade |
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pollutant |
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likely to remain a |
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making a tough |
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Oil refining |
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merchant |
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heavier crude. |
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regulations, |
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large source of |
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business case for |
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hydrogen |
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Used in |
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but |
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demand in 2050, |
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replacing existing |
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purchases with |
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smaller |
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moderated by |
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even in a Paris- |
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capacity. |
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hydrogen from |
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volumes for oil |
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lower oil |
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compatible |
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Hydrogen costs |
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low-carbon |
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sands and |
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demand |
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pathway. |
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strongly |
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electricity. |
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biofuels. |
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growth. |
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influence refining |
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margins. |
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Hydrogen |
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demand for |
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Retrofit or new- |
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existing uses set |
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build hydrogen |
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Central to |
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31% increase |
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to grow despite |
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Competitiveness |
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with CCUS. Use |
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ammonia and |
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under existing |
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materials |
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of low-carbon |
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low-carbon |
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methanol |
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policies for |
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efficiency |
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hydrogen |
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hydrogen for |
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production, |
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ammonia and |
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(including |
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supplies depends |
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Chemical |
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ammonia and |
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and used in |
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methanol due |
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recycling); new |
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on gas and |
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production |
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methanol |
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several other |
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to economic |
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ammonia and |
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electricity prices. |
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production (urea |
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smaller-scale |
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and |
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methanol |
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CCUS retrofitting |
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and methanol |
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chemical |
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demand could |
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is not a universal |
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will still require a |
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processes. |
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arise for clean |
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option. |
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source of |
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uses as |
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carbon). |
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hydrogen-based |
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fuels. |
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IEA. All rights reserved.