Hydrogen Market Formation: An Evaluation Framework

Hydrogen Market Formation: An Evaluation Framework (January 2024) guides first movers, investors, and policymakers to pinpoint new opportunities and challenges for building a clean hydrogen market in their region based on information around three primary factors: today’s hydrogen industry; regional interest and support from policymakers, industry leaders, and local communities; and untapped growth potential. This framework seeks to spur participation in emerging hydrogen markets by bridging the information gap between stakeholders interested in hydrogen development and the future growth of clean hydrogen markets within regions across the world.  

Many countries are looking to form clean hydrogen markets to reach decarbonization and energy security goals. However, these markets are still at a nascent stage of development. High costs for clean hydrogen limit its production and demand. Governments around the world are aiming to scale clean hydrogen industries by instituting research, development, and demonstration (RD&D) programs; production tax credits; cost reduction targets; and massive subsidies for innovation across the value chain. The hydrogen landscape is complex, particularly given the multitude of potential production routes and end-use applications.

This framework allows stakeholders to synthesize large amounts of information on characteristics of hydrogen markets so they can spot potential for market growth. Relevant factors include human capital, energy and critical mineral resources, presence of geologic formations for carbon sequestration, and a technology development ecosystem. The report provides region-specific examples for the United States, Canada, the European Union, the United Kingdom, Japan, and China to illustrate how this framework may be used.