Global pure hydrogen demand will total 73.3 million mt in 2020, down 1.6% from the prior year, due to drops in oil product demand amid the global pandemic, S&P Global Platts Analytics said Thursday.
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Refinery production capacity will grow 1 million mt during the year, lower than previous projections of 1.7 million mt.
"Despite tempered short-term growth, an increase of over 4.25 million mt H2/year within the next decade is still anticipated," Platts Analytics said in its quarterly Hydrogen Market Monitor report.
Refining capacity expansions can imply a greater demand for hydrogen, although much is produced internally through naphtha reforming.
Strong demand growth is expected in the ammonia sector, which uses hydrogen to produce fertilizer. Global ammonia production capacity excluding the US is expected to total nearly 37 million mt H2/year by 2023, up nearly 2 million mt from 2020 estimates.
On the supply side, Platts Analytics estimates 640 MW of announced electrolyzer capacity to come online over the next five years, with an estimated 68% expected by the end of 2022.
Fuel cell electric vehicle fleets are expected to remain at very low levels with the global light duty fleet at 17,000. China has over 4,100 medium or heavy duty FCEVs.
FCEVs are pure electric vehicles operate off electricity produced from hydrogen reacting with oxygen in a fuel cell.
Japan, Germany and California cumulatively account for 60% of global refueling stations, Platts Analytics said.
Looking at S&P Global Platts hydrogen assessments, global hydrogen production costs have come down in the past couple months due to the drop in demand associated with the pandemic.
The cost of hydrogen production in Japan via steam methane reforming without carbon capture and storage, and including assumptions for capital expenses, has dropped from $2.27/kg in late March to $2.09/kg as of Wednesday. It had dipped as low as $1.99/kg on April 29.