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Low-carbon hydrogen: A path to a greener future

Report from the Capgemini Research Institute

With the global imperative towards sustainability driving organizations to explore sustainable energy solutions, the Capgemini Research Institute has been exploring possible routes to accelerating decarbonization.

The most prominent hydrogen production methods continue to rely on fossil fuels. To solve this problem, the world is currently exploring “low-carbon hydrogen” (such as green hydrogen or pink hydrogen), which has only marginal carbon emissions in the production process and is emerging as a promising tool for emissions reduction and sustainable development.

Recognizing the potential for low-carbon hydrogen to contribute to a sustainable future, we examine the topic in depth in our newest Capgemini Research Institute report, Low-carbon hydrogen: A path to a greener future. We answer the question of “what is green hydrogen?”, assess the current state of it, and look at how organizations can capitalize on the opportunities that it creates. To this end, we surveyed over 800 global executives from the energy and utilities (E&U) sector as well as end-user sectors and conducted 20 in-depth interviews with stakeholders across a variety of organizations.  

Our findings indicate that with government support, declining renewable energy costs, rapid technological advances, and a growing focus on decarbonization and sustainability, the demand for low-carbon hydrogen will increase manifold in the coming years. E&U organizations expect low-carbon hydrogen to meet up to 18% of energy demand by 2050. Investment in the area is already taking off and is set to increase significantly – 64% of E&U organizations in our survey plan to invest in low-carbon hydrogen initiatives by 2030, and 9 in 10 plan to do so by 2050.

Nevertheless, there are several obstacles that low-carbon hydrogen will have to overcome to fulfil organizations’ hopes. A big challenge is cost, with low-carbon hydrogen still being 2–3 times more expensive to produce than carbon-based hydrogen. Moreover, the high costs of storage, transportation, as well as energy losses across the value chain all contribute to an increased total cost of operations. Finally, there are also engineering and skill shortage challenges that organizations must contend with.

Still, it is evident that low-carbon hydrogen holds real decarbonization potential. But in order to succeed in their initiatives, organizations will need to navigate several obstacles along the way to seize the opportunity, mitigate costs, and scale at pace. In this report, we provide insight into how E&U organizations can approach these challenges, exploring five major themes of low-carbon hydrogen and three layers that organizations will need to address in order to achieve their goals.

To learn more about low-carbon hydrogen and how organizations can capitalize on the opportunity it presents, download the report.

Meet our experts

James Forrest

Global Head of Energy and Utilities
I lead in helping global clients with major business transformations involving smart grid, IoT, the reform of gas and electricity markets, major software and infrastructure changes, and the use of machine learning and artificial intelligence to drive significant business performance improvement.

Florent Andrillon

Vice President | Head of Climate Tech Strategy & Development, Capgemini
Florent leads clean tech business development with all sustainability teams across the Group. He has more than 20 years of experience in the energy and utilities sector, helping clients to achieve their sustainability goals and transition to a low-carbon economy. He has a strong focus on the energy, resources, and clean tech market, as well as on sustainability, climate, and energy transition issues. He leverages Capgemini’s capabilities and its external partners to deliver innovative and impactful solutions.

Benoît Calatayud

Director, Capgemini Invent
Benoît Calatayud graduated from Ecole Centrale de Nantes, Sciences Po Paris and IIT Madras. He began his career at the Commission de Régulation de l’énergie, working on network regulation issues (Smartgrids, TSO/DSO investments, tariff). He then joined Bpifrance, the french investment bank, as head of the energy transition in the innovation department where he was in charge of financing projects in the energy transition, particularly in hydrogen, and advising business lines on decarbonation issues. Benoît joined the Capgemini Invent teams at the beginning of 2022, to contribute to the development of energy transition projects.

Mike Lewis

VP Global Leader Energy Transition
He is the lead of Capgemini’s Energy Transition business globally. He is responsible for our client’s success in their move to low carbon energy – both the products and services our clients bring to market, and how their own company transition to low carbon, sustainable business practices.

Peter King

Global Energy and Utilities Lead, Capgemini Invent
I focus on driving transformation by working with my clients to define new ways of working, new operating models and the transformation programs that will deliver change.

Richard Biagioni

Vice President Climate, Sustainability & Ecosystems chez, Capgemini Invent

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