Green hydrogen has the potential to play a key role in the energy transition and economic development of the Global South, IRENA has said.
Green hydrogen, produced through electrolysis powered by renewable energy, not only has the capacity to reduce emissions from hard-to-abate sectors, but it also – along with its derivatives such as ammonia and methanol – can help to drive industrial development and increase energy independence, IRENA noted.
‘Such versatile purposes have put green hydrogen in the centre of global energy transition acceleration efforts and discussions, prompting speculations about the prospects of an emerging international market for hydrogen and derived commodities,’ IRENA said, adding that currently, around 20% of the total global demand anticipated for hydrogen may be satisfied through international trade flows.
Renewable energy potential
Countries with abundant solar and wind resources are likely to hold an advantage in the production of green hydrogen going forward, it added, meaning that as a result of its high renewable energy potential, the Global South is poised to become an ‘essential player’ in international markets.
‘Latin America for example, can leverage its solar and wind resources with existing industrial infrastructure,’ IRENA noted. ‘The region could become a major supplier across multiple green commodities, from ammonia and e-methanol to direct reduced iron, serving markets in North America, Europe, and Asia.
‘Sub-Saharan Africa is also presented with opportunities to produce green hydrogen for both domestic use and export. The region’s strategic geographic position is expected to enable efficient access to European and Asian markets, while its vast land availability supports the infrastructure deployments required for competitive green hydrogen production.’
North Africa, too, given its proximity to the European Union, has the potential to supply around 18% of the EU’s green hydrogen and related commodities by 2050, IRENA added.
Infrastructure development
To realise this potential, IRENA estimates that a global investment of $2.49 trillion will be needed in infrastructure development in the hydrogen value chain, including large-scale renewable capacity, electrolysers, and battery storage.
‘International markets for green hydrogen and derived commodities offer the developing countries in the Global South a pathway to sustainable industrialisation, energy security, and economic diversification,’ IRENA said. ‘They therefore can accelerate their own energy transitions while becoming an indispensable partner in the global journey towards net-zero emissions.’ Read more here.
