Green hydrogen, produced exclusively from renewable energy, is rapidly gaining importance as a potential factor in the transition to a net-zero global economy. It offers a solution to decarbonize energy applications where the direct use of renewable electricity or fuels is not a technically viable or cost-effective solution. Green hydrogen could play a key role in achieving the goals of the Paris Agreement by mid-century.
IRENA estimates that the global technical potential to produce green hydrogen is as much as twenty times what the total global primary energy demand will be in 2050. Access to high quality abundant renewable power generation will be a crucial cost factor, as this will be a key driver of the relative competitiveness of certain regions in producing hydrogen or in producing tradable commodities using hydrogen.
International trade could play a significant role in matching supply and demand for green hydrogen and its derivatives, because the domestic production potential of some economies and regions may not be enough to satisfy their domestic demand, and it may be cheaper for some economies to import green hydrogen from locations with lower production costs. Analysis by IRENA suggests that by 2050 about one quarter of the total global hydrogen demand could be satisfied through international trade.
A number of pathways could help to render trade policies more open, predictable, coherent and inclusive, to advance their role in fostering and shaping the development of green hydrogen supply chains. The report “International trade and green hydrogen” prepared by IRENA and WTO outlines actions for consideration by policymakers like developing sound quality infrastructure to guarantee the environmental integrity of green hydrogen production and providing information on the production process and emissions footprint along the value chain.
Access the complete report here.
