GlobalHydrogenFlows-2023UpdateConsiderationsforevolvingglobalhydrogentradePublishedinNovember2023bytheHydrogenCouncil.Copiesofthisdocumentareavailableuponrequestorcanbedownloadedfromourwebsite:http://www.hydrogencouncil.comThisreportwasauthoredbytheHydrogenCouncilincollaborationwithMcKinsey&Company.Thereproductionofthiswork,savewhereotherwisestated,isauthorised,providedthesourceisacknowledged.Allrightsareotherwisereserved.Theauthorsofthereportconfirmthefollowing:1.Therearenorecommendations,measures,ortrajectorieswithinthereportthatcouldbeinterpretedasstandardsorasanyotherformof(suggested)coordinationbetweentheparticipantsofthestudyreferredtowithinthereportthatwouldinfringetheEUcompetitionlaw.2.Itisnottheirintentionthatanysuchformofcoordinationwillbeadopted.Whilethecontentsofthisreportanditsabstractimplicationsfortheindustrycanbediscussedgenerallyoncetheyhavebeenprepared,individualstrategiesremainproprietaryandconfidentialandaretheresponsibilityofeachparticipant.Participantsareremindedthat,aspartoftheinvariablepracticeoftheHydrogenCouncilandtheEUcompetitionlawobligationstowhichmembershipactivitiesaresubject,suchstrategicandconfidentialinformationmustnotbesharedorcoordinated—includingaspartofthisreport.2GlobalHydrogenFlows-2023UpdateHydrogenCouncil,McKinsey&CompanyHydrogenanditsderivativeswillplayacentralroleindecarbonizationandglobaltradewillbecriticalfordrivinguptake.ThiswasthekeyfindingofGlobalHydrogenFlows,ajointreportoftheHydrogenCouncilandMcKinsey&Companypublishedin2022.Ithighlightedtheinabilityofmajorfuturehydrogendemandregions,includingEurope,Japan,andSouthKorea,tomeetalltheirdemandataffordablecosts.Otherregions,thereportshowed,couldpotentiallyhaveexcesslow-costsupply.Yettheoutlookforhydrogenisfarfromfixed.Thehydrogenindustryisconstantlyadaptingtoarapidlyevolvingregulatoryframework,shiftsinglobalpolicy,geopoliticalforces,newtechnologies,andongoinglearningfromprojectimplementation.This2023summaryreportrevisitsthefindingsofthe2022GlobalHydrogenFlowsreporttoaccountfortheseandotherchanges—andassesseshowglobalhydrogentradeflowscouldevolve.1AbouttheanalysisTheresultspresentedinthis2023summaryreportarebasedonamoredetaileddocument,showingtheoutputsfromanadvancedanalyticsoptimizationmodel.Thissoftwarebalancessupplyanddemandacrossallregions,multiplecarriers,andendproducts.TheGlobalHydrogenTradeFlowsModeloptimizesacross1.5milliontraderoutesandmultipledemandscenarios1Unlessotherwisestated,alldataandanalysisinthissummaryreportarebasedondataprovidedbytheGlobalHydrogenFlows2023datasetoftheHydrogenCouncilandMcKinsey&Company,drawingondataprovidedbyMcKinsey&Company.Introduction3GlobalHydrogenFlows-2023UpdateHydrogenCouncil,McKinsey&CompanyDespitetheexistingpositiveandgrowingmomentumonhydrogenuptake(refertoHydrogenInsights2023),itisalsobecomingclearthatthecurrentgrowthrateisnotstrongenoughcomparedtowhatisrequiredforthenet-zerotrajectory,atleastnotby2030.Acknowledgingthecriticalrolehydrogenhastoplayfortheworldtodecarbonizeby2050,thereisaneedandurgencytostepupeffortsthataddresschallengesandunlockinvestments.Estimatesofthelevelizedcostofhydrogen(LCOH)forrenewablehydrogenarebetween30and65percenthigherthanthoseintheOctober2022report.Therevisedestimatesreflecthigherelectrolyzercapitalexpenditureaswellasrenewablecostsandfactorinelementsthatmayinfluenceindividualcountries’investmentattra...