Sarawak hydrogen market viability still unproven, says analyst

PETALING JAYA, Sept 30 — A market analyst has cautioned that the viability of Sarawak's hydrogen sector remains unproven, cautioning Putrajaya against extending incentives without sufficient buyer certainty. Global Asia Consulting's Samirul Ariff Othman highlighted the critical need for buyers willing to pay commercially viable prices, stressing that the issue stems from the lack of demand.

Despite Sarawak's ability to produce hydrogen affordably, challenges persist in finding customers, particularly in the Japanese market where costs escalate due to compression, cooling, and transport. Samirul advocated for incentives when they support an economically viable project, but cautioned against extending support prematurely when markets are still uncertain.

He noted that a publicly-backed hydrogen transportation system, while promising, does not guarantee market demand or financial sustainability. Samirul urged policymakers to seek binding offtake agreements and clear evidence of enduring demand before committing additional funds to the hydrogen industry.