Green hydrogen, a key solution for decarbonizing hard-to-abate industries, is set to become cost-competitive by 2030, according to ABI Research.
Production costs, or Levelized Cost of Hydrogen (LCOH), are expected to drop from the current US$6-7/kg to approximately US$2.5/kg by the end of the decade, reaching US$1.80/kg by 2040 and around US$1/kg by 2050 as the market matures.
This cost reduction will be driven by advancements in electrolyzer efficiency, falling renewable energy prices, and economies of scale. Leading electrolyzer producers, including ITM Power, Siemens Energy, and Plug Power, along with supporting technology vendors like Danfoss and Schneider Electric, are key to reducing CAPEX and OPEX.
Heavy industries, such as steel, aviation, and shipping, will increasingly adopt green hydrogen to meet net-zero commitments. Accurate cost predictions will be essential for scaling adoption and identifying market opportunities.
These insights are from ABI Research’s report, The Economic Viability of Green Hydrogen for Industry and Enterprises, part of its Smart Energy research service