Lack of support threatens hydrogen sector: IEA

A lack of government policy support is threatening to derail the expansion of the low-emissions hydrogen production sector, according to an International Energy Agency report. 

While the sector has grown in the past two years inflation, supply chain disruptions, and the high cost of capital are threatening the profitability of the sector, the report reads.

“Inflation and more expensive borrowing costs are affecting the entire hydrogen value chain, driving up financing costs for developers and reducing the impact of government support,” the IEA wrote in the report. 

“Greater progress is needed on technology, regulation and demand creation to ensure low-emissions hydrogen can realise its full potential,” said IEA executive director Fatih Birol. 

While there are a number of government programmes in place in the US, UK, and the EU, lengthy time lags between policy announcements and implementation are causing developers to delay projects, the report argues. 

The study also details a number of policy recommendations focused on reducing risk in the sector and incentivising investment, alongside the development of common international standards and regulations.