The push for renewable hydrogen as a clean energy solution has the potential to reshape global energy systems. As hydrogen gains traction, especially in hard-to-abate sectors like heavy industry and transportation, sustainable international hydrogen value chains must be developed. This article provides a detailed exploration of hydrogen value chains, covering the production and demand, environmental impacts, and socio-economic benefits, as outlined in the 2024 IRENA report.
Hydrogen Production and Demand: Current and Future Outlook
As of 2022, global hydrogen production stands at approximately 95 million tonnes, mostly derived from fossil fuels like coal and natural gas. In a world pursuing net-zero emissions by 2050, hydrogen production will need to increase fivefold to meet the demand, with renewable hydrogen (green hydrogen) playing a central role. By 2050, green hydrogen is expected to account for 14% of global final energy consumption, making it vital for decarbonizing sectors like ammonia and steel production, shipping, and aviation. This rise in hydrogen use will necessitate an enormous increase in electrolyzer capacity, from negligible amounts today to 428 GW by 2030 and 5,722 GW by 2050.
The Role of Renewable Hydrogen in Global Energy Transition
Renewable hydrogen has the potential to act as a bridge between renewable electricity and hard-to-decarbonize sectors. According to IRENA’s 1.5°C scenario, renewable hydrogen and its derivatives could replace fossil fuels in a significant number of applications, enabling cleaner production of materials like ammonia and steel. Moreover, by 2050, about 25% of the world’s hydrogen demand will be met through international trade, with hydrogen transported via retrofitted natural gas pipelines or shipped as ammonia.
Environmental Aspects of Renewable Hydrogen Production
The environmental benefits of renewable hydrogen lie primarily in its low greenhouse gas (GHG) emissions compared to grey and blue hydrogen (produced from fossil fuels with or without carbon capture). However, the infrastructure required to scale up hydrogen production raises concerns about land use, water demand, and the potential for environmental burdens on developing countries. While green hydrogen has a lower emissions intensity, particularly when produced using renewable energy sources like wind and solar, it also requires careful management of resources, especially in water-scarce regions.
Key Drivers of Emission Intensity
Hydrogen’s sustainability depends largely on its emission intensity, which varies across production methods. Grey hydrogen, produced from fossil fuels, has the highest emissions, while green hydrogen, made through electrolysis using renewable electricity, has the lowest. Blue hydrogen, which captures some carbon emissions during production, still carries significant risks, especially due to methane leakages. The report highlights that the most crucial factor in determining hydrogen’s carbon footprint is the source of electricity used in its production.
Transportation and Trade of Renewable Hydrogen
Long-distance transportation of hydrogen will be a significant challenge in shaping international value chains. Hydrogen can be transported in various forms, including ammonia, liquid organic hydrogen carriers (LOHCs), and methanol, each with its own advantages and technical requirements. The energy consumption for transporting hydrogen is a critical factor, and the report indicates that shipping ammonia or methanol directly as fuels can bypass the energy-intensive reconversion step required for pure hydrogen transport.
Socio-Economic Benefits for Developing Countries
Hydrogen production presents an opportunity for economic development in developing countries. The co-benefits of hydrogen production include job creation, industrial development, and increased access to clean energy. However, these benefits depend on strategic planning and local involvement to ensure long-term value creation. The report emphasizes the importance of capacity-building in developing countries, enabling them to participate more actively in the global hydrogen economy.
Governance and Strategic Frameworks
At least 53 countries have launched hydrogen strategies, with the G7 countries playing a central role in hydrogen policy development. These strategies vary significantly, with developed countries often focusing on decarbonization while developing countries look to hydrogen as an economic growth opportunity. The report stresses the need for collaboration between potential hydrogen suppliers (often in the Global South) and demand centres like Europe and East Asia. Strategic partnerships are crucial for sharing technology, best practices, and financial resources to accelerate the adoption of renewable hydrogen.
Conclusion
The path to building sustainable international hydrogen value chains is filled with both opportunities and challenges. Renewable hydrogen holds the potential to play a significant role in the global energy transition, but this requires a comprehensive approach to sustainability. By focusing on emissions reduction, environmental impact mitigation, socio-economic benefits for developing countries, and strategic global partnerships, the world can shape a fair and equitable hydrogen economy that meets both energy demand and climate goals.
This article is based on the IRENA report Shaping Sustainable International Hydrogen Value Chains, authored by Ann-Kathrin Lipponer, Emanuele Bianco, and Arno van den Bos under the guidance of Francisco Boshell, Ute Collier, and Roland Roesch.