Hydrogen technologies will be a "pivotal" source of energy over the coming decades, while carbon capture, utilization, and storage (CCUS) and nuclear fusion are "unlikely to have a significant impact" before 2030, according to JPMorgan.
In the investment bank's annual global energy outlook, it did note that hydrogen (H2) should play a crucial role, particularly for hard-to-abate sectors such as steel, ammonia, and heavy-duty transportation, the amount of investment could be hindered by regulatory impediments.
More technological progress is needed for transportation, such as ammonia cracking, and for end-uses including steel.
"Thus, we still expect large-scale green H2 deployment will take time," the analyst team led by Patrick Jones wrote.
Anticipating substantial investment in hydrogen technologies in the latter part of the decade, the team cautions that hurdles such as access and cost of renewable power, regulatory and fiscal policy support, the lack of transport infrastructure, and end-user readiness could pose obstacles.
Therefore, they project green hydrogen output to reach about 10mln metric tons per annum in 2030, making up a tiny 0.2% proportion of global energy consumption.
JPM tipped Plug Power (NASDAQ:PLUG), ITM Power PLC (AIM:ITM) and Bloom Energy Corporation (NYSE:BE) as key players in the hydrogen market.
PLUG is emerging as a leader in providing green hydrogen ecosystem solutions in North America, with Bloom Energy a fuel cell manufacturer already turning a positive EBITDA as it aims to develop solid-oxide electrolysers.
Despite experiencing setbacks in the past year or so, UK-based ITM Power is seen as "offering greater turnaround potential ... given recent operational progress", prompting the analysts to advise keeping a close watch for the July 27 results.
The report also acknowledges the potential of other technologies like blue hydrogen, small modular reactors (SMRs), and fusion to mitigate the future energy shortfall.
Nonetheless, JPMorgan notes that the hurdles of scalability, cost, and commercial readiness remain significant obstacles to their large-scale deployment. These technologies are expected to gain more traction on the pathway to net zero post-2030.