Policy strategies to grow decarbonized hydrogen demand: Sector-specific recommendations


13 November, 2023



Decarbonized hydrogen is gaining momentum as one of the few available solutions to a complex challenge in the energy transition – the decarbonization of hard-to-abate sectors. It is now clear: without the use of this energy carrier, many energy-intensive industries will not achieve net-zero emissions by 2050.

And yet, despite this widespread consensus, only 4% of all announced projects have reached the Final Investment Decision stage (FID) or are currently under construction.

Why? One reason is that governments worldwide have so far mostly focused on stimulating supply to boost the decarbonized hydrogen market, while overlooking the power of demand. Without sufficient consumer demand, however, there is no business case for low-carbon hydrogen and projects simply do not get built. In turn, this lack of scale further inhibits demand, creating a cycle of constraint.

To tackle this issue, WBCSD and its members wrote this report which looks into four hard-to-abate sectors for which hydrogen is a fundamental decarbonization lever – green steel production, heavy-duty road transport, ammonia production and oil refinery. It provides recommendations on the policies these sectors need to end the demand-supply conundrum and scale their offtake of decarbonized hydrogen.

Our findings can help policymakers create the conditions for a more sustainable and cost-effective hydrogen economy. With the proper policy support, decarbonized hydrogen can live up to its full potential and become a viable decarbonization option for the four industries selected in this paper and other sectors facing similar challenges.

View the publication.