Hydrogen Plans Could Drain Europe and US Budgets by Over $1 Trillion

An executive at Mitsubishi Heavy Industries (7011.T) projected that Europe and the U.S. would need to invest over $1 trillion in infrastructure to facilitate widespread adoption of hydrogen fuel, emphasizing the critical role of such investments in driving the transition towards cleaner energy sources.

Emmanouil Kakaras, Executive Vice President at Mitsubishi, underscored the necessity of substantial new demand to propel the shift to hydrogen, which could only be achieved through investments in infrastructure aimed at reducing costs.

Speaking at the CERAWeek by S&P Global energy conference, Kakaras stressed, “If you count the funding to bridge the gap, you will easily get to $1 trillion.”

Hydrogen Adoption to Cost Europe and US Over $1 Trillion
Mitsubishi’s executive emphasizes the need for significant demand to propel the hydrogen shift.

European governments have already pledged $750 billion towards this endeavor, and Kakaras noted that with additional funding such as the U.S.

Inflation Reduction Act supporting hydrogen projects, there exists a significant opportunity to accelerate the transition from fossil fuels to cleaner alternatives.

Kakaras thinks that by setting up new hydrogen stuff in Europe and combining it with capturing and storing carbon in the U.S., we could cut down on greenhouse gases and help switch to cleaner energy by 2035.

Hydrogen Adoption to Cost Europe and US Over $1 Trillion
Saudi Aramco CEO warns against hasty transition, advocates for reducing carbon emissions in oil. (Credits: Aramco)

But not everyone at the conference agreed with this idea. Saudi Aramco CEO Amin Nasser cautioned against abandoning oil and gas too hastily, arguing that efforts should instead focus on reducing carbon emissions within these sectors.

Nasser highlighted concerns about the current transition strategy, stating, “Despite its significant long-term potential, hydrogen still costs in the range of $200 to $400 per barrel of oil equivalent, while oil and gas remain much cheaper.”

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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