Global investment in hydrogen has spiked. Here’s how the gas might factor into the green economy.

Fuel of the future  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

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Betting on hydrogen The news • A $500 billion investment. As countries and industries look to transition away from fossil fuels to help stabilize the climate, hydrogen has increasingly become part of major decarbonization plans. More than 350 large-scale hydrogen projects have been announced globally—and they are expected to receive $500 billion in public and private funding through 2030. Some companies in steel manufacturing and aviation have already built hydrogen into their energy-transition plans. [Economist] • Hydrogen hub. In August, India’s Prime Minister Narendra Modi announced plans for a National Hydrogen Mission to reduce carbon emissions and bolster production of clean energy. The ambition is for India to become a major hub for green hydrogen, which is produced with renewable energy such as wind and solar power. India is aiming to decrease its reliance on fossil-fuel imports, which cost the country $160 billion a year. [Chemistry World] Despite impressive developments, batteries and fuel-cell technology are not yet ready to meet the very high-power requirements needed for heavy-duty vehicles that operate in harsh conditions. Our insights • Why it matters. For trucking, mining, construction, and agriculture companies to cut emissions to net zero, they’ll need to shift to zero-emissions vehicles. For a long time, hydrogen combustion engines were disregarded because the high cost of hydrogen made these vehicle powertrains uneconomical. Today, however, decreasing hydrogen prices and low capital-expenditure requirements for combustion engines make hydrogen combustion a more competitive solution. • Ignite change. Though the technology is still in its infancy, the advantages of hydrogen combustion engines include faster refueling times compared with battery-electric trucks, lower costs (for dump trucks, the cost of ownership for hydrogen and diesel internal combustion engines is expected to break even by 2030, with diesel engine costs continuing to rise), and higher tolerances for heat and vibrations. To find out how hydrogen combustion engines can leverage existing technologies, support the growth of hydrogen infrastructure—and still provide a zero-emissions option—see our article. — Edited by Andrew Simon    Start your engines Was this forwarded to you? Sign up here. Or send us feedback — we’d love to hear from you. Follow our thinking This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. You received this email because you subscribed to the On Point newsletter. Manage subscriptions | Unsubscribe Copyright © 2021 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007