• Climate change and net-zero commitments are accelerating the shift from fossil fuels to alternatives such as clean hydrogen.
  • The race is on to adopt hydrogen technologies, with some countries positioning to become tomorrow’s hydrogen superpowers.
  • Hydrogen isn’t a direct substitute for coal, oil and natural gas, but it can help to decarbonize parts of the economy.

The global quest for clean energy is disrupting the fossil fuel-based world order. Hydrogen could account for up to 12% of global energy use by 2050, leading to the rise of new energy superpowers, according to a recently released report.

But who are the frontrunners in the race to adopt and scale up clean hydrogen and other low-carbon fuels. A new report from the International Renewable Energy Agency (IRENA), called Geopolitics of the Energy Transformation: The Hydrogen Factor, analyzes the political and economic changes taking place in the energy landscape.

It lists six leaders in developing policy initiatives, technology and export facilities to promote clean hydrogen value chains – all of which are needed if the world is to decarbonize sectors like steelmaking, shipping and road haulage.


China

China consumes and produces more hydrogen than any other country – its current annual usage is more than 24 million tonnes.

An infographic showing different types of hydrogen.
Emissions-free “green” hydrogen is generated using renewable energy.
Image: Irena

Most of the country’s production is “grey” hydrogen, meaning it is generated using fossil fuels like coal, but more than 30 projects involving “green” hydrogen – created using emissions-free renewable energy – have been set up since 2019.

China issued its first hydrogen roadmap in 2016, leading to it having the world’s third-largest fuel cell electric vehicle (FCEV) fleet and to the country becoming a pioneer in developing fuel cell trucks and buses.

China’s five-year economic plan recognizes hydrogen as one of the six industries of the future. And while it currently has no national strategy in place, hydrogen features in 16 provincial and city energy strategies.

The European Union

Having issued its national hydrogen strategy in 2020, the EU has recognized hydrogen as a key technology for achieving policy goals such as the European Green Deal.

The bloc’s strategy is heavily focused on emissions-free green hydrogen, with a target to install 40 gigawatts of renewable hydrogen electrolyzer capacity by 2030. However, with Europe’s green hydrogen capacity set to reach just 2.7 gigawatts by 2025, achieving such an ambitious goal will be a challenge.

The European Clean Hydrogen Alliance was launched to support investment and large-scale deployment of clean hydrogen projects, as the EU aims to become the industrial leader in clean hydrogen. Within the bloc, different member states look set to become large-scale hydrogen importers, exporters or transit hubs.

A chart showing average annual funding available for hydrogen projects.
The EU has annual funding potential for hydrogen projects of $4.56 billion.
Image: Irena

As the chart shows, the EU has $4.56 billion of annual funding potential for hydrogen projects in 2021-30.

India

Green hydrogen could help India make a “quantum leap” to energy independence by 2047, Prime Minister Narendra Modi said during the launch of the country’s National Hydrogen Mission in 2021.

Policymakers are considering legislation requiring oil refineries and fertilizer plants to use a minimum quota of green hydrogen in their industrial processes.

Green hydrogen could be a huge value-adding opportunity for India as it pivots towards renewables and away from imported fossil fuels, which currently meet most of the nation’s oil and gas demand, Tim Buckley, Director of Energy Finance Studies, Australasia, for the Institute for Energy Economics and Financial Analysis told Recharge News.

Japan

In 2017, Japan became the first country to formulate a national hydrogen strategy as part of its ambition to become the world’s first “hydrogen society” by adopting the fuel across all sectors, the IRENA report says.

The country lacks the natural resources needed to deploy sufficient levels of wind or solar to generate clean hydrogen at scale, so is developing long-term supply agreements to import hydrogen from overseas.

Alongside government investment in hydrogen and fuel cell technologies – totalling $670 million in 2020 – policymakers have set mobility targets of 800,000 FCEVs and 900 hydrogen refuelling stations by 2030.

Person fuelling car with hydrogen.
Hydrogen is seen as a key driver of economic growth and new jobs in South Korea.
Image: UNSPLASH/Maxim Hopman

South Korea

South Korea’s 2019 hydrogen roadmap hailed clean hydrogen as a key driver of economic growth and job creation. The nation has its sights set on becoming a global leader in producing and deploying FCEVs and large-scale stationary fuel cells for hydrogen power generation.

Its Green New Deal contains an ambitious target of deploying 200,000 FCEVs by 2025 – about 20 times more than in 2020. And last year, South Korea passed the Economic Promotion and Safety Control of Hydrogen Act, the world’s first law aimed at promoting hydrogen vehicles, charging stations and fuel cells.

Plans are in place for hydrogen to provide 10% of the energy needs of its cities, counties and towns by 2030, with its share rising to 30% by 2040 before it becomes the country’s largest single energy carrier by mid-century, according to IRENA.

United States

The US is the world’s second-biggest producer and consumer of hydrogen after China, accounting for 13% of global demand.

States such as California supported the country’s FCEV market growth for more than a decade with initiatives like the Clean Vehicle Rebate Programme. The US led the world in this field until 2020.

When the government passed into law the Infrastructure Investment and Jobs Act of 2021, it contained a $9.5 billion budget to boost clean hydrogen development. This was followed by the launch of the government’s Hydrogen Earthshot programme, with its so-called “111 goal” to cut the cost of clean hydrogen to $1 per 1 kilogramme in 1 decade, the report notes.

Other countries

Net energy importers like Chile, in South America, and African countries such as Morocco and Namibia are emerging as exporters of emissions-free green hydrogen. Meanwhile, fossil fuel exporters like Australia, Oman, Saudi Arabia and the United Arab Emirates are looking to clean hydrogen to help diversify their economies, the report states.

What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

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