In a significant development for Azerbaijan’s energy landscape, the European Bank for Reconstruction and Development (EBRD) has thrown its weight behind the country’s green hydrogen initiatives. This support not only reflects the growing global enthusiasm for green hydrogen but also positions Azerbaijan as a pivotal player in the transition to a sustainable energy future.
Azerbaijan’s journey toward green hydrogen gained momentum with the EBRD’s commitment to provide technical assistance for project preparation and tailor-made financial products to drive each endeavor. The EBRD’s multifaceted approach aligns with the nation’s aspirations to become a powerhouse in the green hydrogen sector.
This commitment follows a preliminary market study report, conducted by an international consultant and supported by the EBRD, published in August 2023. The report’s findings underscore Azerbaijan’s immense potential to produce renewable hydrogen—a resource that not only supports local decarbonization but can also meet the high-demand needs of regions like the European Union.
Azerbaijan’s unique advantage lies in its existing expertise in refining, ammonia, and methanol markets. Additionally, the country boasts extensive natural gas distribution systems that are ripe for conversion to hydrogen production. These attributes position Azerbaijan for substantial progress in the realm of low-carbon hydrogen demand.
The report, prepared by Advisian consulting company in collaboration with the EBRD, highlights Azerbaijan’s readiness to delve into the production of both blue and green hydrogen. Leveraging its established foothold in ammonia and methanol, the nation can drive the decarbonization of these industries while exploring the possibilities of blue and green hydrogen production.
One of Azerbaijan’s key strengths is its abundant renewable resources, strategically located near the Caspian Sea and eastern Azerbaijan. Furthermore, the nation has direct access to natural gas reserves, particularly from the Shah Deniz field, placing it at the forefront of green and blue hydrogen technology development. Blue hydrogen endeavors would entail exploring CO2 storage in depleted gas fields and addressing upstream emissions, showcasing Azerbaijan’s commitment to a comprehensive energy transition.
Azerbaijan’s well-developed natural gas infrastructure, exemplified by the Southern Gas Corridor (SGC), offers the potential for hydrogen blending into the gas network—a move that could significantly bolster the country’s hydrogen capabilities and open doors for hydrogen exports to international markets.
The EBRD’s support is not only a testament to Azerbaijan’s potential in the green hydrogen arena but also highlights the importance of collaboration. The bank expressed its willingness to cooperate with other international organizations in Azerbaijan, emphasizing that partnerships are integral to its approach. Such collaborations enable the EBRD to tap into the diverse skills and expertise of other international financial institutions (IFIs) and mobilize financing, especially when commercial co-financing may be limited.
As Azerbaijan gears up to embrace green hydrogen as a cornerstone of its energy transition, the EBRD’s endorsement marks a pivotal moment in the nation’s journey toward a sustainable, low-carbon future. With the bank’s support and global collaboration, Azerbaijan is poised to reshape the regional energy landscape, demonstrating that green hydrogen is not just a buzzword but a transformative force with the potential to drive change on a global scale.
