While significant progress has been made in the nine years since the landmark Paris Agreement, the global energy transition is entering a new phase, marked by rising costs, complexity, and increased technology challenges. To successfully navigate this next phase and meet the Paris Agreement goals, urgent action will be needed and the pace of change must accelerate. The clean energy transition will also need to be balanced with affordability, energy system resiliency, and energy security in an increasingly uncertain macroeconomic environment.
The Global Energy Perspective 2024 is intended to serve as a fact base grounded in the best currently available data to help global stakeholders meet decarbonization goals. The report offers a detailed demand outlook for 68 sectors and 78 fuels across a 1.5° pathway, as set out in the Paris Agreement, as well as three bottom-up energy transition scenarios. These scenarios have been redesigned this year to better reflect changing global conditions, including geopolitical shifts, increasingly complex supply chains, and higher inflation. The critical question this research aims to address is how the world can achieve a step change in its efforts toward meeting net-zero goals and avoid the worst impacts of climate change.
Successfully navigating the transition away from fossil fuels will require focusing beyond a single solution or technology. There are no silver bullets—the future calls for a holistic transformation of the global energy system by incorporating a range of proven and emerging levers. To do this, considerations beyond technological feasibility will need to be addressed, spanning capital deployment, improving business cases, ensuring economic returns, adjusting regulation, and establishing continued political and public support in the face of competing economic and societal priorities.
Move from plans to progress.
Our analysis of the data shows global emissions to 2050 remaining above a 1.5º pathway—even if all countries deliver on current commitments
Increased energy demand and the continued role of fossil fuels in the energy system mean emissions could continue rising through 2025–35. Emissions have not yet peaked, and global CO2 emissions from combustion and industrial processes are projected to increase until around 2025 under all our bottom-up scenarios. The scenarios begin to diverge toward 2030, with all showing a decline in emissions by 2050. Despite this projected decline, 2050 emissions are still meaningfully above net-zero targets across all scenarios.
The emissions decline is driven primarily by economic factors, particularly the increasing cost-effectiveness of low-carbon technology in sectors such as power and road transport. For example, solar photovoltaic (PV) deployment in Europe is on track to reach 2030 targets, while China is making strides in both solar and electric vehicle (EV) adoption. Policy and regulations will also continue to contribute to the adoption of low-carbon technology and support a decline in emissions.
In all our bottom-up scenarios, rising emissions would lead to global temperature increases above 1.5°C by 2050, from around 1.8°C in the Sustainable Transformation scenario, through around 2.2°C in Continued Momentum, to around 2.6°C in Slow Evolution.
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A line graph shows four scenarios of global greenhouse gas emissions from 1990 to 2050, measured in gigatons (Gt) of CO2 equivalent per annum. The values from 1990 to 2022 are historical values, represented by one line that grows from approximately 38 Gt to 53. From 2022 to 2050, four lines diverge representing the four different scenarios. The Slow Evolution scenario line increases to 54 Gt in 2030 and then decreases to 46 by 2050. The Continued Momentum scenario line initially increases, then falls to 51 Gt in 2030, and then continues to decrease to 35 by 2050. The Sustainable Transformation scenario line decreases to 46 Gt by 2030 and then continues to decrease to 18 by 2050. The 1.5º pathway line decreases to 30 Gt in 2030 and then further decreases to eight in 2050.
Source: IEA Global Energy Review 2022; IEA World Energy Balances
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Global energy demand is projected to continue to increase to 2050
Global energy demand is growing faster than expected and a more challenging geopolitical landscape—combined with the emergence of new sources of demand and smaller-than-expected efficiency gains—means the evolution of demand growth could see rapid changes in unexpected directions.
Global energy demand is projected to grow between 11 percent (in the Continued Momentum scenario) and 18 percent (in the Slow Evolution scenario) by 2050. Most of this growth will come from emerging economies, where growing populations and a strengthening middle class will result in higher energy demand. The relocation of manufacturing industries from mature to emerging economies will further shift demand to these economies.
Developments in emerging economies, particularly ASEAN countries, India, and the Middle East, are critical, given that these regions are projected to drive between 66 and 95 percent of energy demand growth to 2050, depending on the scenario. A substantial part of this growth is projected to come from ASEAN countries, cementing the region as a key energy demand center—further reshaping global energy trade flows and increasing the region’s geopolitical importance.
In mature economies, as well as in China, overall demand is projected to flatten in the short to medium term. However, there are several forces at work that could affect the demand trajectory in different regions. In the United States, industrial resurgence would drive demand growth through electrification, while in Europe, by contrast, continued deindustrialization would lead to declining demand in the region.
How the world will meet the projected increase in energy demand is one of the key questions of the energy transition. Both RES and new fossil fuels build-out will be required to ensure demand is met by supply, and nuclear power could play a bigger role in the years beyond 2050. However, for all these energy sources, lengthy project timelines and higher interest rates could add costs and put project execution at risk.
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A stacked area chart shows global primary energy demand by region under the Continued Momentum scenario, in million terajoules, between 1990 and 2050. The regions are separated into two overall categories: those with increasing demand, including India, ASEAN, Africa, Middle East, Latin America, China, and rest of world, and those with decreasing demand, including North America, OECD Europe, and OECD Asia–Pacific. Note: OECD stands for the “Organization for Economic Cooperation and Development.” From 2023 to 2050, the total of all segments is projected to grow by 11 percent, from approximately 620 million terajoules to approximately 690 million terajoules. From 2023 to 2050, the individual-region CAGR values are: India, 2.3 percent; ASEAN, 1.2 percent; Africa, 1.0 percent; Middle East, 0.6 percent; rest of world, 0.5 percent; Latin America, 0.5 percent; China, 0.3 percent; North America, -0.1 percent; OECD Europe, -0.8 percent; OECD Asia–Pacific, -0.9 percent.
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Growth in electricity consumption is expected to accelerate as new demand centers emerge
Electrification is accelerating—our analysis suggests that, between 2023 and 2050, electricity consumption could more than double in slower energy transition scenarios, and nearly triple in faster scenarios. This is in comparison to total energy consumption growth of up to 21 percent over the same period. Electricity is projected to become the largest source of energy by 2050 across scenarios, with consumption coming from traditional sectors (for example, electrification of buildings) as well as newer sectors (such as data centers, EVs, and green hydrogen).
Of these new demand centers, the most striking is the rise of artificial intelligence (AI) and the associated boom in data centers. The effect that AI could have on future energy demand could vary substantially depending on the growth trajectories of its many applications, as well as those of other technologies. Our research estimates that the rise of cloud solutions, cryptocurrency, and AI could see data centers accounting for 2,500 to 4,500 terawatt hours (TWh) of global electricity demand by 2050 (5 to 9 percent of total electricity demand). Data centers are mostly powered by electricity (with backup generators) and have constant demand, creating greater need for gas or other firming sources of energy to balance out the intermittency of renewable energy sources (RES).
Under the Continued Momentum scenario, global green hydrogen consumption is projected to increase to 179 megatons per annum (Mtpa) by 2050, up from less than 1 Mtpa today and 5 Mtpa in 2030. This could lead to a growth in power consumption of 20 percent per year for the sector.
Electricity consumption in transport could grow by around 10 percent annually in the Continued Momentum scenario, driven by increased penetration of EVs. Battery electric vehicles (BEVs) are projected to account for most global passenger car sales by 2050, up from 13 percent today.
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A stacked column chart shows global power consumption by sector under the Continued Momentum scenario, measured in thousand terawatt-hours (TTWh). The sectors are industry, buildings, hydrogen gas (H2) and synfuels, data centers, and transport. There are columns for the years 2000, 2010, 2023, 2030, and 2050. From 2000 to 2023, the total of all segments grows from 13 to 25 TTWh, representing a 3.0 percent per year increase. These are actual values, and the stacked columns are composed almost entirely of industry and buildings. From 2023 to 2050, forecast values show the total of all segments growing from 25 to 64 TTWh, which represents a 3.5 percent per year increase. Transport, data centers, and H2 and synfuels are forecast to grow by 2050 to comprise approximately 30 percent of the total. The CAGR values by segment from 2023 to 2050 are: transport, 10 percent; data centers, 8 percent; H2 and synfuels, 20 percent; buildings, 2 percent; industry, 3 percent.
Source: IEA; IRENA
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Renewables are projected to make up the bulk of the power mix into the future
Low-carbon energy sources are projected to grow, accounting for 65 to 80 percent of global power generation by 2050, depending on the scenario, up from 32 percent today. This growth is primarily driven by the lower cost of RES, though policy and incentives also play a role.
Growth rates are projected to differ by technology. Those technologies for which the levelized cost of energy (LCOE) is already low at the point of production, such as solar, wind, and energy storage systems, are projected to continue to grow, while those with higher costs—including hydrogen and other sustainable fuels, and carbon capture, utilization, and storage (CCUS)—lack sufficient demand and policy support for strong growth. Solar stands out with particularly strong growth projections, while hydrogen growth to 2050 has been revised downward by 10 to 25 percent compared to previous estimates due to higher cost projections.
To supply projected energy demand and increase the viability of RES-based power systems, stakeholders now need to consider how to build a fully running and reliable energy system based on renewables. Here, emerging economies have an opportunity to build a renewables-based system from the ground up to meet their burgeoning energy needs, potentially leapfrogging some of the constraints imposed by adapting a preexisting energy system to run on renewables. Doing so would require conscious planning; purposeful, pragmatic action; and a supportive policy environment to ensure that a renewables-based energy system could meet rapidly growing demand.
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A stacked column chart shows global power generation by energy source, measured in thousand terawatt-hours (TTWh). Historical values are shown for 1995, 2010, and 2023, and separate projections based on the Slow Evolution, Continued Momentum, and Sustainable Transformation scenarios are shown for 2030, 2040, and 2050. The historical totals are: 1995, 13 TTWh; 2010, 19; 2023, 28. The 2030 totals by scenario are: Slow Evolution, 32 TTWh; Continued Momentum, 33; Sustainable Transformation, 36. The 2040 totals by scenario are: Slow Evolution, 43 TTWh; Continued Momentum, 50; Sustainable Transformation, 58. The 2050 totals by scenario are: Slow Evolution, 59 TTWh; Continued Momentum, 70; Sustainable Transformation, 79. The 2023–40 CAGR values for Continued Momentum, by energy source, are: other, 3 percent; solar, 12 percent; wind offshore, 15 percent; wind onshore, 10 percent; hydro, 1 percent; clean firm, 3 percent; gas, 0 percent; coal, -3 percent. Note: clean firm includes gas and coal plants with carbon capture, utilization, and storage (CCUS); nuclear; and hydrogen. The percentage share of renewables historical totals are: 1995, 19 percent; 2010, 18 percent; 2023, 32 percent. By 2050, the percentage share of renewables totals by scenario are projected to be approximately 65 percent for Slow Evolution, approximately 75 percent for Continued Momentum, and approximately 80 percent for Sustainable Transformation. The gigatons (Gt) of CO2 emissions historical totals are: 2010, approximately 11 Gt; 2023, 13 Gt. By 2050, the Gt of CO2 emissions totals by scenario are projected to be: approximately 11 Gt for Slow Evolution, approximately 9 Gt for Continued Momentum, and approximately 4 Gt for Sustainable Transformation.
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Challenges facing RES build-out, including power pricing and firmness, need to be overcome
A set of new and existing challenges to RES build-out will need to be overcome to ensure the energy transition continues at pace. While RES are now cheaper and make up a larger part of the energy mix than ever before, more work is needed around the economic feasibility of some RES business cases.
An emerging challenge affecting energy systems with a high penetration of renewables is power pricing. The comparatively lower marginal costs of RES mean that the price of electricity tends toward zero—or even negative pricing—at certain times of day. For new RES installations, this could potentially impact the business case, requiring electricity providers to derisk their positions. In some scenarios, including those with the most cost-effective decarbonization pathways, our analysis shows that new RES build-out would not have a positive business case without regulatory intervention.
Achieving firmness in a renewables-based system introduces another complex challenge. The business case for firming capacity, such as from gas or battery electric storage systems (BESS), needs to make sense and be supported by government and correct market design. Even though a renewables-based system may be cheaper than a fossil-based one, the need for firmness is nontrivial—and this, in combination with the required grid investment, could make the final cost of power for the consumer higher than previously anticipated.
Policy and regulation can play a role in ensuring the build-out of low-carbon firm energy sources is feasible, with robust business cases that result in affordable power for end users. Additionally, BESS and other long-duration energy storage (LDES) technologies could play an important role in meeting demand located far from the grid and in balancing a renewables-based system.
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A bar chart shows the number of yearly occurrences of day-ahead negative electricity prices in the EU plus Norway and Switzerland, from 2017 to 2023. Note: one occurrence corresponds to one hour during which prices are negative. The number of occurrences by year are: 834 in 2017, 510 in 2018, 925 in 2019, 1,923 in 2020, 952 in 2021, 558 in 2022, and 6,470 in 2023. From 2022 to 2023, the number of occurrences increased by 12 times.
Source: European Union Agency for the Cooperation of Energy Regulators (ACER)
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Fossil demand is set to decrease, but fossil fuels are expected to continue to help meet growing energy demand across all scenarios
Despite progress in RES build-out, the energy transition has been slower than expected in certain areas, and key transition levers are not yet mature, scalable, or cost-effective. This, combined with the constraints facing renewables build-out and growing energy demand, means renewables alone are not currently projected to be sufficient to meet the world’s future energy needs in all our bottom-up scenarios.
Fossil fuels, including oil, natural gas, and coal, are therefore projected to continue to play a role, albeit a moderating one, in the global energy system to 2050, meeting between 40 and 60 percent of global energy demand in 2050, depending on the scenario, down from 78 percent in 2023. Analysis of the data shows that investment and capital flow into fossil fuels are projected to continue for at least the next ten years to ensure the global energy system can keep up with demand.
This means that future fossil fuel demand in 2030 is best characterized as a decade-spanning plateau rather than a peak, with the duration of this plateau varying by scenario. Reducing the duration of this plateau will depend on several levers, including accelerated electrification of the economy, particularly in transport (EV adoption) and faster industrial heat pump deployment, enhanced adoption of bio and synfuels in difficult-to-abate sectors such as heavy transport and other industrial segments, and accelerated build-out of RES in the power sector.
It is increasingly clear from our analysis that the energy system is not a zero-sum game—our analysis shows that both fossil fuels and RES will form part of the energy mix for the foreseeable future, with fossil fuels projected to meet the demand unable to be met by RES due to slow build-out, and to provide firming capacity for renewables-based energy systems.
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Three stacked area charts show global primary energy demand by fuel, in million terajoules, across the Sustainable Transformation, Continued Momentum, and Slow Evolution scenarios. There are three categories of fuel included: natural gas, oil, and coal. All three charts show 1990 to 2050, with the 2023–50 values representing the differing projections. Historical values from 1990 to 2023 increased from approximately 300 million terajoules, to approximately 430 million terajoules, with brief dips around 2009 and 2020. Going forward from 2023, all three scenarios are projected to plateau and then decline toward 2050. Sustainable Transformation has the shortest plateau and the most dramatic decline, reaching a 2050 total of approximately 240 million terajoules. This represents 39 percent of the total energy demand projected for 2050. Under this scenario, from 2023 to 2050, the CAGR for natural gas is -1 percent; for oil, -3 percent; and for coal, -5 percent. In the next chart, showing Continued Momentum, there is a longer plateau and less dramatic decline, reaching a 2050 total of approximately 360 million terajoules. This represents 52 percent of the total energy demand projected for 2050. Under this scenario, from 2023 to 2050, the CAGR for natural gas is 0 percent; for oil, -2 percent; and for coal, -3 percent. The last chart, representing Slow Evolution, has the longest plateau and smallest overall decline to 2050, reaching a final total of approximately 440 million terajoules. This represents 61 percent of the total energy demand projected for 2050. Under this scenario, from 2023 to 2050, the CAGR for natural gas is 1 percent; for oil, -1 percent; and for coal, -2 percent.
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Significant grid build-out will be needed to enable electrification, with T&D investments required to grow threefold
Maintaining or accelerating the pace of the global energy transition will require overcoming several bottlenecks impacting the continued uptake of low-carbon technologies. The global energy system is fragile, lacks redundancy, and is highly complex, all of which means that bottlenecks could have significant effects if they go unresolved. Additionally, as the energy transition progresses, difficult trade-offs will need to be made between multiple objectives, including affordability, reliability, industrial competitiveness, and energy security. The major bottlenecks identified affect electricity generation, but other low-carbon energy sources, such as sustainable fuels and key low-carbon technologies such as EV batteries, face bottlenecks of their own.
As electrification continues, significant grid build-out will be needed. Electrification requires purpose-built and resilient grids that can connect new RES and support bidirectional flows—requiring a significant amount of infrastructure to be built. Achieving this required build-out may be challenging in many areas, resulting in grid congestion and preventing new RES projects from being connected to the grid.
The grid build-out needed to enable the uptake of electrification requires significant capital. Transmission and distribution (T&D) investments would need to grow about threefold by 2050 to recover from underinvestment and to accommodate intermittent RES. This would result in an increase in the share of grid cost in total average delivered power costs to customers. As costs increase, grids could become congested and labor shortages emerge. Demand management could help alleviate increases in delivered power costs. Nevertheless, as the grid decarbonizes with an increased share of renewables, the average generation cost is projected to decline, which could bring down the system cost of electricity in some cases.
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Four sets of stacked column charts show the system cost of electricity under the Continued Momentum scenario, measured in dollars per megawatt-hour ($MWh). The four charts represent the United States, Brazil, Germany, and the United Kingdom, each with stacked columns for the years 2024, 2030, 2040, and 2050. The stacks comprise three segments: distribution, transmission, and generation. For the United States, from 2024 to 2030, the total has a 0.4 percent CAGR, increasing from approximately 118 $MWh to approximately 121. From 2024 to 2050, the total has a -0.8 percent CAGR, decreasing from approximately 118 $MWh to approximately 97. The 2024–50 CAGR values by segment are: 0 percent for distribution, 2 percent for transmission, and -2 percent for generation. For Brazil, from 2024 to 2030, the total has a -1.0 percent CAGR, decreasing from approximately 107 $MWh to approximately 101. From 2024 to 2050, the total has a 0 percent CAGR, arriving at a total of approximately 108 $MWh in 2050. The 2024–50 CAGR values by segment are: 1 percent for distribution, 4 percent for transmission, and -2 percent for generation. For Germany, from 2024 to 2030, the total has a 0.5 percent CAGR, increasing from approximately 188 $MWh to approximately 195. From 2024 to 2050, the total has a 0.2 percent CAGR, increasing from approximately 188 $MWh to approximately 199. The 2024–50 CAGR values by segment are: 1 percent for distribution, 4 percent for transmission, and -3 percent for generation. For the United Kingdom, from 2024 to 2030, the total has a 2.2 percent CAGR, increasing from approximately 168 $MWh to approximately 191. From 2024 to 2050, the total has a 0.2 percent CAGR, increasing from approximately 168 $MWh to approximately 175. The 2024–50 CAGR values by segment are: 0 percent for distribution, 3 percent for transmission, and -1 percent for generation.
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Slowdown in the uptake of energy efficiency technologies could lead to electricity demand not materializing in Europe
Despite the projected growth in electricity demand, it remains uncertain whether this demand will fully materialize, particularly in Europe. Drivers of this uncertainty include a slowdown in heat pump installations, slower-than-expected EV sales, lack of investment into industrial electrification, and uncertainties in project development. The expected reduction in industrial output in some sectors, such as iron and steel, paper and pulp, and chemicals, is another contributing factor. The lack of clarity in how demand will unfold could dampen the appetite to invest in next-generation clean energy projects, potentially stalling or slowing the energy transition.
The availability of an appropriately skilled workforce is another bottleneck for both renewables and fossil fuels. These industries may struggle to attract skilled workers, with new talent choosing to work in less traditional sectors, and older workers retiring. The net-zero transition is also changing the materials and mining demand profile as low-carbon technologies require more and different materials than conventional technologies.
Because bottlenecks are, in general, caused by the lack of affordability and strong business cases, a common thread in solving them is ensuring a viable business case for technology uptake or build-out, with the right policy and financial frameworks and incentives in place—and willingness from stakeholders to adopt these solutions. Pragmatic and adaptive regulation, informed by the evolving energy transition landscape, could also be an important component in resolving bottlenecks.
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A waterfall chart shows expected electricity demand growth in Europe from 2023 to 2030, in terawatt-hours (TWh), under the Continued Momentum scenario. Each step is divided into baseline growth and at-risk growth. Buildings contribute 17 TWh, with 100 percent share categorized as at risk. Transport has 70 TWh baseline growth and 58 at risk, thus approximately 45 percent share at risk. Industry has 58 TWh baseline growth and 66 at risk, thus approximately 55 percent share at risk. Green H2 has 79 TWh baseline growth and 22 at risk, thus approximately 20 percent share at risk. Data centers have 70 TWh baseline growth and 21 at risk, thus approximately 25 percent share at risk. Overall, these categories total 277 TWh baseline growth and 164 at risk, thus approximately 40 percent share at risk. In total, including baseline growth and at-risk growth, this is an increase of 461 TWh, or 16 percent, from 2023 to 2030.
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In the European Union and the United States, the deployment pipeline for several technologies falls short of 2030 targets
One major cross-cutting bottleneck facing the energy transition is a lack of firm commitment to project pipelines—not helped by concerns surrounding project economics and long-term returns, and much less by the fact there is no precedent for the global energy transition.
Despite significant announced investment and a supportive policy environment, this lack of firm commitment could put a significant number of RES projects at risk. Despite continued reductions in the LCOE, the deployment of low-carbon power generation faces challenges related to broader market design and infrastructure.
Notwithstanding numerous announcements spurred by policies such as the US Inflation Reduction Act, clean commodities production faces a significant shortfall in firm commitments. The pace of the final investment decision (FID) is not on track to meet net-zero targets, following concerns over feedstock availability and competitive pricing. Currently, less than half of the deployment pipeline to 2030 for low-carbon power has reached FID.
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A series of stacked bar graphs shows the technology deployment pipeline in the EU-27 plus three (EU-27 plus Norway, Switzerland, and the United Kingdom) and the United States versus 2030 targets (in which tech deployment is measured to understand the gap between actual versus needed deployment), as a percentage of those targets. In low-carbon power generation, announced solar photovoltaic projects meet and exceed the target by 3 percent. Operational deployments in 2023 represent less than 15 percent of the 205 gigawatt (GW) target for offshore wind, approximately 60 percent of the 695 GW target for onshore wind, and 75 percent of the 705 GW target for solar photovoltaic. In clean commodities production, announced clean hydrogen projects exceed the target by 98 percent. Operational deployments in 2023 represent less than 5 percent of the 15 million metric-ton-per-annum (MTPA) target for clean hydrogen and approximately 10 percent of the 136 MTPA target for sustainable fuels. In end-use decarbonization, announced carbon capture, utilization, and storage (CCUS) projects exceed the target by 473 percent. Operational deployments in 2023 represent less than 30 percent of the 56 million target for electric vehicles, approximately 40 percent of the 156 million target for heat pumps, and approximately 30 percent of the 75 MTPA target for CCUS.
Source: EHPA; EIA; Eurostat; IEA; Rystad; Wind 4C; McKinsey Energy Solutions; McKinsey Hydrogen Insights
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