Geopolitics of the Energy Transformation ( The Hydrogen Factor)
In recent years, hydrogen has risen up the agenda as a potential missing piece of the clean energy puzzle. A growing number of countries now have a national hydrogen roadmap or strategy, and a sizeable portion of the COVID-19 stimulus and recovery funds have been dedicated to the acceleration of hydrogen. At the 2021 United Nations Climate Change Conference (COP26) in Glasgow, 32 countries and the European Union (EU) agreed to work together to accelerate the development and deployment of clean hydrogen and ensure that “affordable renewable and low-carbon hydrogen is globally available by 2030” (UNFCCC, 2021).
Hydrogen has spurred multiple waves of interest in the past without significant impact. Two factors make
this time different. First, governments worldwide have rallied behind the target of net zero emissions by
the middle of this century (Blacket al., 2021). Having a reasonable chance of limiting global temperature
rise to 1.5°C, the goal laid out in the 2015 Paris Agreement, requires reaching net zero emissions by 2050
(IPCC, 2021). To do so, all sectors of the economy need to cut their emissions, including heavy industry
and long-haul transport, where limited solutions exist. Hydrogen has emerged as a key option for reducing
emissions in these sectors.
Second, the plummeting costs of renewables and electrolysers are improving the economic attractiveness
of "green" hydrogen – that is, hydrogen produced through the electrolysis of water powered by renewable
electricity. The increasing share of variable renewables, such as wind and photovoltaic (PV) solar power,
also creates demand for flexibility and storage, which hydrogen can help deliver. Green hydrogen can thus
complement and extend the ongoing revolution in renewable electricity.
This report provides a comprehensive analysis of the geopolitical drivers and potential consequences of the
development of clean hydrogen value chains.