Hydrogen development plays a crucial role in achieving energy transition and meeting decarbonisation goals. In 2022, green hydrogen production capacity increased by 44% to over 109 kilotons per annum globally. Over the same period, the number of hydrogen-related deals rose significantly, representing a growing trend in the low-carbon hydrogen market. However, there was a decrease in deals after Q2 2022, possibly due to companies focusing on their core business and diversifying investment risk amid economic uncertainties. Despite a large proportion of these deals being partnerships, capital raising and investments remained essential to the hydrogen economy's growth in 2022, with mergers and acquisitions reaching $24.4 billion, a 288% increase from 2021, according to a GlobalData analysis. Similarly, venture finance deal values also saw substantial growth, reaching over $3,000 million globally. 

 

The scalability and affordability of renewable energy systems, as well as advancements in electrolysers, are paving the way for sustainable hydrogen production. The Top 10 Hydrogen Economy Trends & Innovations in 2023 research published by StartUs Insights reveals this year’s hydrogen trends and maps them in accordance with their impact. The research also provides a map of the impact of these trends on companies. 

 

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Data Source: StartUs Insights 

 

The map reveals that fuel cells play a significant role in fostering the hydrogen economy. Renewable hydrogen and carbon capture, utilisation, and storage are particularly influential due to their interrelationship with clean hydrogen production. Biomass gasification presents a viable and environmentally friendly method for generating hydrogen. The efficient distribution of hydrogen depends on the availability of suitable storage systems. Moreover, hydrogen showcases its versatility as an energy carrier by serving various purposes, including combined heat and power generation as well as green propulsion. 

Hydrogen fuel cells 

Hydrogen fuel cells can generate power immediately and help balance energy demands. This is particularly important because hydrogen helps smooth out the ups and downs of power production from renewable energy systems and a grid that relies only on renewables. Hydrogen fuel cells address these issues by serving both as a power source and a long-term energy storage solution. They are used across various modes of transportation including maritime, land, and air, as well as in various vehicles such as ships, trains, planes, drones, cars, trucks, and buses.  

 

The Europe Fuel Cell Market Size & Share Analysis estimates that the Europe Fuel Cell Market is projected to grow from $1,928 million in 2023 to $ 7,442 million by 2028. This growth is primarily driven by the transportation sector, as the EU aims for a zero-emissions transport system. Furthermore, technological advancements like Panasonic's recent 5kW hydrogen fuel cell generator with a peak 56% electrical efficiency, offer significant opportunities for market expansion. 

Renewable hydrogen 

Renewable energy sources like solar and wind can produce hydrogen, leading to substantial carbon reduction. Paired with fuel cells or hydrogen carriers, renewables can meet fluctuating power demands. German startup HY2GEN, for example, produces green hydrogen using solar energy for the mobility and maritime sectors. Their goals include competitive hydrogen pricing, effective distribution, and power storage.  

Advanced electrolysis 

The evolution of advanced electrolysis technologies enables larger-scale hydrogen production. Proton exchange or polymer electrolyte membrane electrolysers, which lower both operational and capital costs, are increasingly preferred for both industrial and residential uses. Other common electrolysers include solid oxide and anion-exchange membrane types. The largest electrolyser HySynergy started producing green hydrogen in Denmark at the end of last year. 

X-to-Hydrogen-to-X 

The hydrogen economy relies not just on hydrogen but also on its chemical byproducts, like e-fuels such as e-methanol. These low-emission fuels, derived from hydrogen, can be used directly in internal combustion engines. Methanol and methane, other hydrogen byproducts, recycle hydrogen into circulation. A key factor for decarbonisation is transforming waste into hydrogen, a process achieved by startups through methods like gasification, pyrolysis, fermentation, and reforming. These waste-to-hydrogen solutions aim to tackle waste issues while generating low or zero-emission hydrogen. 

Hydrogen carriers 

Transporting hydrogen typically in liquid or gas form can strain storage containers due to handling and operational limitations. Hydrogen carriers are compounds formed through a reaction with hydrogen, offering ease in long-distance transportation and storage. Startups are focusing on improving the purity and efficiency of these carriers with continued research and development.  

Carbon capture, utilisation & storage 

Carbon capture, utilisation and storage and blue hydrogen technologies help mitigate the environmental impact of traditional hydrogen production, which largely relies on unsustainable fossil fuels. These methods not only reduce carbon emissions but also repurpose them for other processes, like fertiliser production, thus promoting zero waste and emission cycles.  

Hydrogen distribution 

Transporting and distributing hydrogen is a key challenge in establishing the hydrogen economy. Various methods are being considered depending on production and usage. Regional distribution through new or retrofitted pipelines, as well as transportation via trains, ships, tube trailers, and liquid tankers, facilitate hydrogen movement. Handling hydrogen storage containers is crucial due to its flammability and effects on materials. Hydrogen refuelling stations play a vital role in enabling hydrogen highways and addressing refuelling challenges for hydrogen fuel cell vehicles, particularly in trucks and buses. 

Hydrogen liquefaction & compression 

Hydrogen liquefaction and compression, involving the storage of hydrogen in cryogenic tanks at ultra-low temperatures, is crucial for scaling the hydrogen economy. Although gaseous hydrogen is easier to handle, it is not directly applicable in industrial settings. Cryo-compressed hydrogen offers a cost-effective storage method, storing high-pressure hydrogen and reducing evaporation upon exposure to air.   

Combined heat & power (CHP) 

Decarbonising CHP is a key goal of the hydrogen economy, achieved through blending hydrogen in natural gas pipelines for heating and power generation. Blended hydrogen reduces emissions in stationary gas turbines, generators, combustion boilers, and hybrid heat pumps, enabling sustainable heating.  

Hydrogen propulsion 

Hydrogen shows promise as a fuel for space propulsion due to its high energy-to-density ratio in liquid form, powering rockets, airplanes, and jets with liquid oxygen-hydrogen systems. Advancements include blending hydrogen with other fuels for green propulsion, utilizing hybrid-electric systems for low-emission mobility. Hydrogen peroxide, a hydrogen derivative, is also being researched as a potential alternative fuel for space vehicle propulsion. 

 

Scaling up the development of hydrogen infrastructure and supporting hydrogen investments are identified as key areas to support hydrogen uptake in the EU. A new report from LCP Delta suggests that Europe's total hydrogen installation capacity could surpass 1GW for the first time, with significant contributions from the UK and Germany. Both countries have over 400MW of hydrogen projects planned for 2023, potentially increasing Europe's total installed capacity from roughly 236MW last year to over 2GW in 2023. According to the report, hydrogen distribution and storage will take centre stage in 2023, marking a shift from the focus on production. The year will witness increased efforts in establishing missing links in the hydrogen value chain, including international pipelines, storage mechanisms, and hydrogen derivatives like methanol or ammonia. 2023 is anticipated to be a pivotal year for hydrogen in the clean energy transition, with large-scale projects coming to fruition and a surge in public and private investment. 

The current trends in hydrogen distribution infrastructure in Europe are focused on scaling up the development of hydrogen infrastructure, supporting hydrogen investments, and building a clean and globally competitive hydrogen industry in Europe. However, there are also challenges related to political delays, financial uncertainty, and supply chain issues that may hinder project development. 

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