Hydrogen: Closing the Cost Gap

The report “Hydrogen: Closing the Cost Gap” published by the Hydrogen Council examines how clean hydrogen can become economically competitive and achieve large-scale adoption by 2030. Developed with analytical support from McKinsey & Company, the study analyses the economic barriers that currently limit the deployment of low-carbon and renewable hydrogen technologies. The report highlights that although significant investment and policy momentum exist, clean hydrogen still faces a cost gap compared with fossil-based alternatives, which slows market demand.

The analysis shows that effective implementation of existing policy frameworks in major regions -particularly the European Union, the United States, and East Asia -  could unlock around 8 million tonnes of clean hydrogen demand annually by 2030. Key policy mechanisms include incentives, mandates, and carbon pricing that reduce production costs or stimulate demand for hydrogen and its derivatives.

The report also emphasises the importance of infrastructure development, stable regulatory frameworks, and long-term offtake agreements to reduce investment risks. Overall, it provides strategic recommendations for governments and industry to accelerate hydrogen deployment, strengthen market confidence, and support the transition toward a low-carbon global energy system.

Report Download (External Link)