IRENA analysis on Hydrogen economy
GS Paper - 3 (Energy)
Rapid growth of the global hydrogen economy can bring significant geoeconomic and geopolitical shifts giving rise to a wave of new interdependencies, a new analysis by the International Renewable Energy Agency (IRENA) said. "Geopolitics of the Energy Transformation: The Hydrogen Factor" sees hydrogen changing the geography of energy trade and regionalising energy relations.
What
- Driven by the climate urgency and countries' commitments to net zero, IRENA estimates hydrogen to cover up to 12 per cent of global energy use by 2050.
- Growing trade and targeted investments in a market dominated by fossil fuels and currently valued at $174 billion is likely to boost economic competitiveness and influence the foreign policy landscape with bilateral deals diverging significantly from the hydrocarbon relationships of the 20th century.
- Hydrogen is clearly riding on the renewable energy revolution with green hydrogen emerging as a game changer for achieving climate neutrality without compromising industrial growth and social development.
- Hydrogen is not new oil; the transition is not a fuel replacement but a shift to a new system with political, technical, environmental, and economic disruptions.
- It is green hydrogen that will bring new and diverse participants to the market, diversify routes and supplies and shift power from the few to the many.
- With international co-operation, the hydrogen market could be more democratic and inclusive, offering opportunities for developed and developing countries alike.
- IRENA estimates that over 30 per cent of hydrogen could be traded across borders by 2050, a higher share than natural gas today.
- Countries that have not traditionally traded energy are establishing bilateral energy relations around hydrogen.
- Cross-border hydrogen trade is set to grow considerably with over 30 countries and regions planning for active commerce already today.
