Financing green hydrogen’s development: clearing the hurdles

29 Mar 2021 Ivan Pavlovic Flagship reports

Financing green hydrogen’s development: clearing the hurdles

- Offering systemic decarbonization solutions for entire sectors of industry and mobility, the hydrogen sector, in particular the green hydrogen sector (low-carbon electrolysis), is still taking off.

- The investments associated with this take-off phase by 2030 are considerable. For the entire sector, they could represent $300 billion worldwide. Considerable, these investments will only be partially covered by the public authorities, despite the recent strengthening of support mechanisms. Their achievement will therefore involve an unprecedented mobilization of private capital.

- The recent example of the deployment of renewable energies in the world offers a development model that is largely replicable in the hydrogen sector: public support schemes have thus made it possible to mobilize considerable masses of private capital and generate a continuous reduction in the costs of developing new capacities.

- In the hydrogen sector, the challenge for the next years is therefore to optimally combine public support schemes and private financing mechanisms to accelerate at the best cost the realization of investments and, thus, decarbonization of the entire economy.

- The present study seeks precisely to determine in what framework and under what conditions private capital (equity, debt) can be effectively mobilized to participate in the financing of the sector.

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