Low carbon hydrogen is key to achieving the goal to reach net-zero emissions by 2050. However, the techno economic potential to produce low-cost, low-carbon hydrogen is not evenly distributed globally. The regions with the potential to produce it may not align with those that will have high future demand. This could lead to the creation of a new global market that not only trades low-carbon hydrogen but also its derivatives. This may reshape global energy trade and create opportunities for new players, including developing countries.
So far, the focus has been on emission intensity and cost, but this new global market may not only introduce new players – it could also bring about highly complex international value chains. These value chains, especially when involving developing countries, require a comprehensive sustainability approach that encompasses various dimensions. This report “Shaping Sustainable International Hydrogen Value Chains” by IRENA provides an analysis covering economic, governance and environmental aspects, as well as potential socio-economic benefits and possible risks for developing countries. It also focuses on value chains that, on the one hand, involve developing countries as hydrogen suppliers, and on the other, future demand hubs, such as the G7.
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