Green hydrogen: 56% annual growth rate makes it the main alternative to gas.

Victor Navarro

September 20, 2022
Green hydrogen

What is green hydrogen and how is it produced?

Green hydrogen comes from renewable energies, such as solar, wind or hydropower. This hydrogen is produced through a process called electrolysis. This process consists of applying an electric current that separates the oxygen molecules from the hydrogen in water. This process has a minimal carbon footprint, thus favoring economically viable decarbonization thanks to the lower production costs of renewable energies as production and technology advance.

Green hydrogen in data

Global demand for green hydrogen is forecast to reach 17.87 % by 2025, and up to 61% by 2050. The global turnover of the green hydrogen sector is estimated at $16.54 billion in 2025, growing at a rate of 56.3% per year. It is estimated that by 2050 it will be used in sectors such as construction, mobility, the chemical industry, and as a heat generator and light. Its production costs are estimated to fall by more than 60% by 2030, reducing its price to $1.6/kg.

This is due to public (such as the EU's REPower plan) and private sector investment, which is expected to reach $340 billion by 2030. At the forefront of this trend are positioned the United States and Europe, especially Spain. In the last 4 years, Spain has been in the top 5 countries receiving foreign investment with 3,000 million euros.

Spain is a benchmark for green hydrogen

According to a report prepared by Wood Mackenzie, Spain currently concentrates 20% of green hydrogen projects worldwide. The only country with a higher % is the United States, which concentrates more than half. Among them is the HyDeal Ambition project, a world-leading project aimed at creating the necessary infrastructure for production and transportation in Spain. In 2021, the government launched a three-year €1.5 billion aid plan to boost projects in the sector.

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The key to renewable energies
This great competitive advantage is due to the great current development of renewable energies in Spain, which puts it ahead of other Eurozone countries. Ursula von der Leyen confirms this situation, saying that Spain has become a very attractive country for green hydrogen.

Latin America, a future world power in renewable energies

Currently, in terms of global production of green hydrogen, Latin America is below competitors such as the United States or Europe. However, a report prepared by the Inter-American Development Bank (IDB) indicates that there are 4 key factors to boost the production of this hydrogen:

  1. Electrification of the most polluting sectors
  2. Worldwide growth in renewable energy storage services
  3. Growing interest in investing in green hydrogen development
  4. Falling production costs for all renewable energies

Taking into account these factors and following the global trend, countries such as Chile, Argentina and Brazil could position themselves as major world powers in renewable energy production in the near future.

Catalonia, the new hydrogen Silicon Valley

Recently, Ursula von der Leyen commented on the transformation of the region into an energy hub of reference thanks to the EU's Next Generation funds. Catalonia has eight technology and research centers dedicated to the study of green hydrogen. One of the many proposals to promote the use of green hydrogen is the Ebro hydrogen corridor, also involving Aragon, Navarra and the Basque Country.


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