IRENA – International trade green hydrogen, 2023

IRENA, the International Renewable Energy Agency, emphasizes the growing importance of green hydrogen as a means to achieve a net-zero global economy. Green hydrogen is produced solely from renewable energy sources and can be used in sectors like heavy industry and transportation where direct use of renewable electricity or fuels is not feasible. In order to meet the goals of the Paris Agreement, hydrogen production and consumption must shift to cleaner methods. IRENA estimates that the global potential for green hydrogen production by 2050 is twenty times the projected global primary energy demand. Access to abundant renewable power will determine the competitiveness of regions in producing hydrogen, and international trade will play an important role in matching supply and demand. However, challenges exist in terms of transportation and costs aIRENA, the International Renewable Energy Agency, highlights the growing importance of green hydrogen as a potential solution to achieving a net-zero global economy. Green hydrogen is produced solely from renewable energy sources and offers a way to decarbonize energy applications where using renewable electricity or fuels directly is not feasible, such as heavy industry and transportation sectors. Meeting the goals of the Paris Agreement, particularly limiting global temperature increase, will require a significant shift in hydrogen production and consumption to cleaner methods. Hydrogen production currently contributes to climate change due to carbon-intensive production processes. IRENA estimates that the global potential for green hydrogen production is twenty times the projected global primary energy demand by 2050. Access to abundant and high-quality renewable power generation will be crucial in determining the competitiveness of regions in producing hydrogen and related commodities. International trade can play a vital role in matching supply and demand for green hydrogen, as some economies may not have enough domestic production capacity and could benefit from importing it at lower costs. IRENA suggests that by 2050, approximately one-quarter of the global hydrogen demand could be met through international trade. Currently, hydrogen production relies heavily on natural gas, with significant trade flows. However, in a net-zero scenario, the trade dynamics for green hydrogen and its derivatives, such as ammonia and methanol, will be different from fossil fuel markets. Green hydrogen production is widespread and tied to solar and wind power supply, while there are fewer major importers compared to the oil and gas markets. Additionally, transporting hydrogen over long distances is technically challenging and expensive.ssociated with long-distance hydrogen transport.