Page 156 - CW E-Magazine (19-8-2025)

News from Abroad

OUTLOOK
US EIA’s long term forecasts project natural gas

remaining the largest source of hydrogen

A new Hydrogen Market Module
(HMM) introduced by the US Energy
Information Administration (EIA) in its
recently published Annual Energy Out-
look 2025 (AEO2025), has helped to
model the US market for hydrogen in the
coming decades.

“In most AEO2025 cases, we project
hydrogen production will increase by
around 80% in 2050 compared with 2024
and most hydrogen (H ) will be produced
2
from natural gas in a process known as
steam methane reforming (SMR). In most
cases, we project less than 1% of hydro-
gen will be produced via electrolysers,
which use electricity to produce hydro- almost all hydrogen in the US as feed- by 2050, just over 1,900 TBtu or about
gen from water, regardless of supportive stock. Of this 2018 total, EIA defined 2.5% of total delivered energy in the US.
policies,” the US Government body said. 8-mmt as market hydrogen and represented Of the total volume, about 12-mmt – over
its supply explicitly in AEO projections 80% – is supplied by SMRs. Hydrogen
In most of the cases featured in the using the HMM. produced as a byproduct of industrial
report, EIA considered laws and regulations chemical processes, such as ethane crack-
in place as of December 2024, which Market hydrogen includes the follow- ing and propane dehydrogenation, is the
meant including tax credits implemented ing supplies: next-largest supply source. SMR + CCS
under the 2022 Inflation Reduction Act * Hydrogen produced for consumers production supplies around 1.5-mmt to
(IRA), such as the Section 45V Clean via technologies such as steam meth- 2-mmt of hydrogen to the market at its
Hydrogen Production Tax Credit designed to ane reforming with and without car- peak in the 2030s, but by 2050, its contri-
support hydrogen production generated bon capture and sequestration (SMR, bution to US supply is negligible because
by electrolysis from renewable electri- SMR + CCS) or electrolysis. the tax credits subsidising the deployment
city sources. More recently, the ‘One Big * Byproduct hydrogen from other in- of this technology expire after 2045. Electro-
Beautiful Bill Act; modified incentives dustrial processes that is delivered to lysis contributes a negligible amount of
for hydrogen production and renewable a consumer and not self-consumed. hydrogen to market supply across the
electricity, which can be used to gene- projection period in the ‘Reference’ case
rate hydrogen during electrolysis. These In the ‘Reference’ case, EIA projected despite assuming the availability of the
changes were not taken into account. this market to grow and reach 14.3-mmt 45V tax credit.
To establish a historical baseline for IFF to sell soy and lecithin business
the hydrogen module, EIA used estimates to Bunge
from its 2018 Manufacturing Energy
Consumption Survey. In 2018, EIA esti- As part of its second quarter results in 2024 and employs around 250 people
mated the size of the hydrogen market as disclosure, International Flavors & Fra- globally. The sale aligns with IFF’s strategy
10-million metric tons (mmt), equivalent grances Inc. announced that it has agreed to strengthen its portfolio and supports
to approximately 1,340-trillion British to divest its soy crush, concentrates, and the ongoing evaluation of strategic alter-
thermal units (TBtu) or about 1.8% of lecithin business to Swiss agribusiness natives for its Food Ingredients segment.
end-use energy consumed in the US that and food major, Bunge Global. The trans- Financial terms of the deal have not been
year. Refiners and chemical manufactu- action includes operations that genera- disclosed. Earlier this year, IFF also
rers in the industrial sector consume ted approximately $240-mn in revenue divested its nitrocellulose business.

156 Chemical Weekly August 19, 2025

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