‘High’ green hydrogen production, consumption potential seen in Asia
The pipeline of green hydrogen projects in the region is around 65.6 GW.
Fitch Solutions said Asia holds a “high potential” for the production and consumption of green hydrogen, ranking second out of all the regions covered following the region of North America and Western Europe.
In a report, Fitch said the green hydrogen projects pipeline in the region has increased to 65.6 gigawatts (GW) as of January 2023 from 35.4 GW in the last report.
Australia is driving the expansion, accounting for 54 out of the 80 projects in the market. However, only nine of the total projects are in the construction stages with a total capacity of around 2.9 GW.
Fitch flagged that the high capital required for hydrogen projects increases the risk of projects progressing particularly for the “megaprojects” or “green hydrogen hubs”, noting that a project that at least 1GW or more capacity costs about $3b.
“A lack of certification standards and the opaqueness of offtake and buyer agreements in the region present challenges for more investment given the high risk associated,” the report read.
“Asia has yet to reach a mature green hydrogen market to regulate and promote transparency in the hydrogen trade, which will be essential to unlocking further growth and financing for the green hydrogen sector,” it added.