IRENA – Green hydrogen industrial development, 2024

Green hydrogen (GH2) is emerging as a crucial element in the global energy industry. It has the potential to revolutionize various sectors, from heavy industries to shipping and aviation, by offering clean and renewable energy. Its advantages include reducing greenhouse gas emissions, enhancing energy security, and creating opportunities for green industrialization. However, it is essential to ensure equal distribution of these benefits to all stakeholders. In light of this, the report "GH2 for sustainable industrial development: A Policy Toolkit for Developing Countries" aims to shift the focus of developing countries from being producers and exporters in the hydrogen market to realizing the significance of the hydrogen value chain for their own development. GH2 presents opportunities to drive industrial growth, spur innovation, and contribute to economic, environmental, and social sustainability. The report identifies seven key economic activity clusters within the GH2 value chain, including renewable energy generation, electrolysis, conversion into Power-to-X, GH2 export, local manufacturing, decarbonization of domestic industries and transport, and attracting foreign direct investment. However, several challenges must be addressed, such as cost barriers, political instability, weak regulatory frameworks, bureaucratic obstacles, and the lack of off-take agreements. Additionally, uncertainties in international transport and concerns about clean hydrogen trade dynamics, including the role of blue hydrogen, pose additional challenges. Scaling up GH2 production in developing countries will require adaptations in infrastructure, regulatory frameworks, financial incentives, and skill development. The report provides a comprehensive toolkit to guide strategic decision-making and overcome these challenges through concerted policy actions.