The International Renewable Energy Agency (IRENA) has been a champion of the immense promise of green hydrogen. Its derivatives, such as ammonia and methanol, are key to the world’s decarbonization effort as we move to net-zero emissions. According to IRENA, in order to meet this target, we will need to spend an incredible $2.49 trillion by 2050. This continued investment is key to fostering the hydrogen value chain. This investment will include renewable energy capacity, electrolysers and battery storage, and the infrastructure needed to produce green hydrogen and other applications.
Green hydrogen is quickly becoming the darling of the clean energy transition. Its cleanliness and the many ways it can be used make it a cornerstone of any successful decarbonization efforts. This process has to include a full-scale transformation of transportation and heavy industry. As countries and companies work to achieve their net-zero pledges, green hydrogen’s potential is more important than ever.
Trade Opportunities for the Global South
We know that the global economy is moving in a greener direction. Green hydrogen and its derivatives present a trailblazing trade opportunity, particularly for nations within the International South. With the right investments, that potential alone could cover almost a fifth of projected global hydrogen demand. This transition presents a unique opportunity for economic development in states and communities that are best located to produce and export hydrogen.
North Africa is uniquely positioned to be a leader in this new market. Its geographical proximity to major European demand centers further serves to bolster the region’s status as a possible supplier of green hydrogen. IRENA estimates that North Africa could meet around 18% of the European Union’s demand for green hydrogen by 2050. Such capacity not only bolsters North Africa’s economic fortunes but encourages a dynamic Euro-Mediterranean energy commerce.
Sub-Saharan Africa is showing a lot of potential in this space. Sub-Saharan countries will need to leverage their geographic positioning and plentiful land. With the right infrastructure, they, like others, could produce green hydrogen for local demand and export potential. Combined with international technical assistance, this rapid deployment would not only greatly accelerate energy access but stimulate local economic development and advance global sustainability objectives.
Investment Requirements for a Sustainable Future
IRENA’s landmark analysis highlights the massive investment needed to develop a successful hydrogen economy. The $2.49 trillion investment figure includes all the installed clean energy resources like renewable energy capacity, electrolysers and battery storage systems. These kinds of investments are essential to making sure green hydrogen is produced efficiently and cost-effectively.
It will take concerted efforts between governments at all levels, the private sector, and the international community to make this shift to a hydrogen economy. Providing the right policies and frameworks will be key to winning that investment and making the technological innovation that investment is bringing possible. With nations around the world increasingly focused on climate action, the momentum driving green hydrogen grows stronger every day.