A joint report by the International Renewable Energy Agency (IRENA) and the WTO published on 9 December provides insights into global hydrogen trade and policies for scaling up production. Hydrogen produced exclusively from renewable power — known as green hydrogen — is widely recognised as a key pillar in replacing fossil fuels and decarbonizing sectors that cannot easily be electrified, such as some industrial processes, shipping and aviation.
The transition to low-carbon energy will require a fast increase in the production of green hydrogen. IRENA estimates that hydrogen and its derivatives would meet 14% of global final energy consumption in 2050 in a scenario in which rising global temperatures resulting from emissions are limited to not more than 1.5°C above pre-industrial levels.
At present, most global hydrogen production — around 95 megatons per year — is derived from fossil fuels, contributing substantially to climate change, rather than serving as a vehicle for decarbonization.
The report stresses the urgency of transforming the hydrogen landscape, with existing uses transitioning to a clean hydrogen supply and overall hydrogen production expanding more than five-fold by 2050.
This expansion will require an unprecedented scale-up of renewable generation capacity and electrolyser capacity. “In a net-zero world, the current landscape of hydrogen production and consumption needs to change dramatically,” stated Roland Roesch, Director of IRENA’s Innovation and Technology Centre.
“Global trade of green hydrogen and its derivatives will be crucial to link low production cost and high demand locations,” he added.
The report emphasizes that green hydrogen production expansion will require the development of new supply chains. This will have implications in terms of international trade of renewable hydrogen itself or commodities produced with it, as well as the trade of the necessary equipment and services along the value chain.
“Open, predictable and coherent trade will be key to fostering green hydrogen value chains,” said the Director of the WTO Trade and Environment Division Aik Hoe Lim at the publication's launch event at the 28th United Nations Climate Change Conference (COP28) in Dubai.