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.

Global Hydrogen in the Developing World: Unraveling Reality Beyond the Buzzword