Global Hydrogen in the Developing World: Unraveling Reality Beyond the Buzzword
Green hydrogen, a potential game-changer in the fight against climate change and the transition to a sustainable energy system, is attracting global attention. However, its widespread adoption faces several hurdles, particularly in terms of cost, technology, and infrastructure.
Challenges of Green Hydrogen
High Cost and Scalability
The high cost of producing green hydrogen, primarily due to the energy-intensive process of electrolysis, remains a significant barrier. Despite efforts to increase production capacity, the EU, for instance, has only managed to reach less than 1% of its 2030 target of 20 million tonnes annually[1][3].
Infrastructure and Market Maturity
The hydrogen market is still in its infancy, with limited transport and distribution infrastructure. There is also uncertainty about which applications will be most promising, slowing large-scale adoption[4].
Short-term Demand and Policy Incentives
Low carbon prices in many regions do not sufficiently encourage the shift from fossil-based hydrogen or fossil fuels to green hydrogen. Moreover, short-term demand is low while governments and companies weigh heavy investments that may not pay off if costs don’t fall quickly[3].
Technological Development Needs
Electrolyzer manufacturing and renewable energy integration must improve to reduce costs. Long-term projections suggest possible cost decreases of 40% to 80% by 2030 or beyond[2].
Potential Benefits
Climate Mitigation and Energy Transition
Green hydrogen can decarbonize sectors difficult to electrify, such as heavy industry (steel, chemicals), heavy-duty transport, and maritime/port operations. It offers a tool to meet Paris Agreement targets and combat the climate emergency[2][5].
Economic Growth and Industrial Development
Developing domestic green hydrogen production can support new industries and economic opportunities, especially as costs fall. Developing countries with abundant renewable resources could use green hydrogen for local energy needs and export, thus becoming players in a new global energy economy[3].
Geopolitical Influence and Energy Security
Green hydrogen promises to reshape global fuel markets, potentially reducing reliance on fossil fuel imports and enhancing energy security. Countries investing early (e.g., China, India, parts of Europe) are positioning to lead this sector[1][3][4].
Job Creation and Technology Leadership
The development of hydrogen ecosystems — including renewable energy projects, electrolyzer manufacturing, and infrastructure — can create skilled jobs and foster technological innovation[2].
For Developing Countries
Developing countries with good renewable resources can leverage green hydrogen to leapfrog fossil fuel dependence. They face financing and technological challenges but could benefit from international partnerships, technology transfer, and expanding global markets for green hydrogen.
Projects like ACCIONA’s hydrogen production from photovoltaic in Mallorca show how green hydrogen can be integrated regionally to power transport and industry, reducing local emissions and advancing economic activity[2].
In conclusion, green hydrogen holds transformative climate and economic potential but requires major cost reductions, technological development, and policy support to overcome current barriers. Developing countries stand to gain substantially if supported in building renewable-based hydrogen sectors aligned with their resources and needs[1][2][3][4][5].
The future of green hydrogen is uncertain, with some companies like Fortescue turning to battery-electric solutions[4]. However, countries with significant investments, like China and the UAE, are positioning themselves to lead this sector[1][3][4]. The Inflation Reduction Act in the U.S. also highlights the growing importance of "clean" hydrogen[5].
As the debate continues, it is crucial to remember the potential benefits of green hydrogen, particularly for developing countries, and to address the challenges to ensure a sustainable and equitable energy transition.
- The high cost and energy-intensive production process of green hydrogen, such as electrolysis, is a main obstacle hindering its widespread adoption, with the EU only reaching less than 1% of its 2030 target of 20 million tonnes annually.
- The hydrogen market, still in its early stages, faces challenges in terms of transport and distribution infrastructure, and uncertainty about the most promising applications, making large-scale adoption slow.
- Low carbon prices in many regions do not sufficiently encourage the shift from fossil-based hydrogen or fossil fuels to green hydrogen, and short-term demand is low while governments and companies consider investments that may not pay off if costs don’t fall quickly.
- Technological development is essential for reducing the costs of green hydrogen production, particularly through improvements in electrolyzer manufacturing and renewable energy integration, with projections suggesting possible cost decreases of 40% to 80% by 2030 or beyond.
- Green hydrogen can decarbonize sectors difficult to electrify, such as heavy industry, heavy-duty transport, and maritime/port operations, offering a valuable tool to meet Paris Agreement targets, combat climate change, and support economic growth and industrial development.
- Developing countries with abundant renewable resources can leverage green hydrogen to minimize fossil fuel dependence, with potential benefits including job creation, technology leadership, geopolitical influence, and energy security.
- International partnerships, technology transfer, and expanding global markets for green hydrogen are crucial for developing countries to overcome financing and technological challenges and build renewable-based hydrogen sectors aligned with their resources and needs.
