Hydrogen will be a key enabler in reducing greenhouse gas emissions – particularly for sectors that are hard to decarbonize. But first the hydrogen economy must develop on an industrial scale, which requires manufacturing technologies to evolve. A new study by Roland Berger and the VDMA highlights the status quo, outlines the challenges that remain, and provides three crucial steps in overcoming them for policymakers and industry alike.
"The biggest challenge for manufacturing technologies in the hydrogen economy will be to succeed in scaling up production and driving costs down."
As the backbone of many industries, manufacturers face continuous pressure to improve performance and efficiency. This coincides with several megatrends approaching tipping points, which broadens the criteria for manufacturing competitiveness. Companies can now diversify their manufacturing by adjusting their footprint and production processes – what we at Roland Berger call “ Next Generation Manufacturing. ”
Two of these trends – sustainability and industry disruption – can be seen in the development of the hydrogen economy by supporting sustainable solutions and driving change in the technology used. Thanks to its versatility, hydrogen can contribute to the decarbonization of a wide range of sectors including heavy industry, long-haul and heavy-duty transport, and energy – sectors that are generally considered hard to decarbonize. It can also help with energy storage via electrolysis.
But for this to happen, the entire hydrogen economy must first develop on an industrial scale, from production over storage, transport and distribution to end use. This requires, among other things, the industrialization of manufacturing technologies to enable the scale up of hydrogen production.
Change is underway. Driven largely by the push to improve sustainability, we expect hydrogen consumption in Europe to double from approximately 10 Mt today to around 20 Mt by the end of the decade. While most of these volumes will continue to be used as feedstock in industrial processes, applications in the mobility and energy sector will expand. The new hydrogen economy also presents significant growth opportunities for a variety of businesses in the emerging industrial supply chains.
As our study shows, however, there is much still to be done. Based on more than 20 interviews with representatives from member companies of the VDMA network “Power-to-X for Applications” we identified five key themes related to the technologies required to manufacture machines and equipment for the hydrogen economy. They include the fact that industrial supply chains are already close to industrialization and that companies are ready to scale up manufacturing capacities.
The study sheds light on several manufacturing technologies for equipment along the hydrogen value chain. All technology examples are based on contributions of selected “Power-to-X for Applications” member companies from the German Mittelstand and contribute to the maturing and scaling of hydrogen equipment supply: enabling sufficient volumes, increasing efficiencies in production, innovating new components and alternative materials, etc.
Thus, many key technologies – for the hydrogen value chain itself but especially for equipment manufacturing – are ready to move from niche application to widespread use. For the first time, the hydrogen sector has the chance to break the traditional chicken-and-egg problem – where equipment manufacturers look for reasons to invest in large-scale infrastructure, while users wait for more mature and cost-efficient hydrogen technologies.
To break this cycle, policymakers, industry and investors alike must act. Our report outlines three crucial steps that will help the hydrogen economy achieve a breakthrough.
Find out more about why it is time to industrialize manufacturing tech for equipment in the hydrogen economy.
