Hydrocarbon-rich countries have the potential to effectively produce clean hydrogen at scale, according to a new McKinsey study.
“The clean hydrogen opportunity for hydrocarbon-rich countries” report, said hydrocarbon-rich countries (HRCs) can leverage their experience in large energy projects, access to abundant renewable energy, and their extensive, highly developed export infrastructure in order to facilitate the scaling up of green and blue hydrogen.
HRCs include Canada, the US and Saudi Arabia.
The report stated: “Not only do these countries possess the hydrocarbons necessary to produce low-carbon blue hydrogen, but they also have experience in developing and operating complex industrial projects, and tend to have the renewable resources to produce green hydrogen at scale.”
Additional investment will be needed to ensure HRCs maximise their position and produce the stable and efficient energy supply required to meet global demand, the report said.
For the hydrogen promise to materialise for HRCs, they will need to scale up competitive supply of both blue and green hydrogen.
Green hydrogen costs are expected to decline by approximately 50% by 2030, as electrolyser costs fall.
HRCs with access to low-cost wind and solar resources will be well placed to build on this green hydrogen momentum in the medium to long term, while also hedging the risk of blue hydrogen’s cost competitiveness in the decades to come.
Markus Wilthaner, Partner at McKinsey, said: “The implications of hydrogen energy are particularly important in making progress toward net-zero in hard-to-abate sectors.
“McKinsey’s research suggests that hydrocarbon-rich countries should build on their competitive advantages and become leaders in clean hydrogen.
“These actions include investing and focusing on hydrogen equipment manufacturing, hydrogen production, CCUS, hydrogen transportation, clean hydrogen downstream production, and integrated project developers.
“Investment and action today will help countries access new and growing value pools whilst also driving the journey to a cleaner future.”