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S&P Global Examines New Ambitions And Challenges In Low-Carbon Hydrogen

NEW YORK (S&P Global Ratings) Feb. 15, 2024--S&P Global examines the opportunities and challenges facing the nascent clean hydrogen industry in a new report published today, "Hydrogen: New Ambitions and Challenges."

The report draws on the knowledge of experts across S&P Global's Ratings and Commodity Insights divisions.

Hydrogen is an important feedstock for the oil refining and chemical industries. It is largely made from fossil fuels in a highly carbon-intensive "steam reforming" process. However, there is an effort worldwide to transform hydrogen into a means of delivering energy to a wide variety of uses. Decarbonizing the process of making hydrogen could transform it into a carrier of low-carbon energy to new customers. This emerging industry shows great promise, but there are hurdles along the way.

There is genuine global interest in developing this industry, and it has strong support both politically and from business. Governments across the globe have announced policies to steer their industries toward low-carbon hydrogen as part of their energy transition plans. However, to fulfill this vision, three challenges will need to be overcome: cost reduction and elimination of bottlenecks, definitions and classification of low-carbon hydrogen, and customer commitments to buy.

The capital and operating costs of production are an important element--but so too are concerns about infrastructure, pressure, and storage. The sheer scale of new renewables generating capacity that is required is a major challenge. Planning bottlenecks pose further complications.

Official classifications and definitions are also crucial, opening the door to green credentials, financing, and commercialization, at the domestic and international levels. Harmonization of these classifications is critical to the vision of a global hydrogen economy, and it will be needed for international trade to develop rapidly.

The most important concern will be finding willing customers to contract explicitly with suppliers to deliver low-carbon hydrogen. Companies in the hydrogen supply chain are seeking innovative solutions to drive customer demand, and such initiatives will continue to flourish. However, the speed and scale of the transition to hydrogen in unlikely to be a smooth one, given all of these challenges.

For further information about the opportunities and challenges for the emerging low-carbon hydron industry, please see the full report published today on spglobal.com.

About S&P Global

S&P Global (NYSE: SPGI) is the world's foremost provider of credit ratings, benchmarks, and analytics in the global capital and commodity markets, offering ESG solutions, deep data, and insights on critical economic, market and business factors. We've been providing essential intelligence that unlocks opportunity, fosters growth, and accelerates progress for more than 160 years. Our divisions include S&P Global Ratings, S&P Global Commodity Insights, S&P Global Market Intelligence, S&P Dow Jones Indices and S&P Global Platts. For more information, visit www.spglobal.com.

Media contact:

Joanna Vickers, Public Relations Director, + 44 207 260 2234, joanna.vickers@spglobal.com

Ratings author contacts:

Claire Mauduit-LeClercq, Director, EMEA Utilities, S&P Global Ratings, claire.mauduit@spglobal.com

Julien Bernu, Associate Director, EMEA Utilities, S&P Global Ratings, julien.bernu@spglobal.com

Commodity Insights author contacts:

Shankari Srinivasan, Vice President, Global Gas, LNG and Low-Carbon Gas, S&P Global Commodity Insights, shankari.srinivasan@spglobal.com

Catherine Robinson, Executive Director, Hydrogen and Low-Carbon Gas, catherine.robinson@spglobal.com

Simon Blakey, Senior Advisor, simon.blakey@spglobal.com

Anastasia Pantazopoulou, Analyst, Hydrogen and Low-Carbon Gas, anastasia.p2@spglobal.com

Related Research

This report does not constitute a rating action.

The report is available to RatingsDirect subscribers at www.capitaliq.com. If you are not a subscriber, you may purchase a copy of the report by emailing research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box at www.spglobal.com/ratings. Alternatively, call S&P Global Ratings' Global Client Support Line (44) 20-7176-7176.

Primary Credit Analyst:Claire Mauduit-Le Clercq, Paris + 33 14 420 7201;
claire.mauduit@spglobal.com
Secondary Contact:Julien Bernu, London + 442071767137;
Julien.Bernu@spglobal.com

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