Green hydrogen is projected to be in high demand as governments race to meet their net zero carbon targets due to its capacity to decarbonize difficult-to-abate sectors such as chemicals and steelmaking.
However, the current green hydrogen market is in its infancy, and additional work, particularly on the part of policymakers, is needed to maximize green hydrogen’s impact on decarbonizing the industrial sector and end-use sectors in general.
To accelerate the adoption of green hydrogen in industry and establish a credible market, the International Renewable Energy Agency (IRENA) and the IRENA Coalition for Action each released a new publication, Green hydrogen for industry: A guide to policymaking and Green Hydrogen Certification Brief, respectively.
“These new reports are particularly opportune because green hydrogen needs rapid policy action to ensure and maximise its contribution to the energy transition. As we know, IRENA’s World Energy Transitions Outlook’s 1.5°C Scenario projects that hydrogen will provide around 10 per cent of the necessary greenhouse gases reduction by 2050,” said Rabia Ferroukhi, IRENA Director-Knowledge, Policy and Finance Centre, in her opening remarks of the Policy Talks that presented the reports on 8 March 2022.
“And why are we focusing on industry?” asked IRENA’s expert Emanuele Bianco, while presenting the new guide to policy making report. “Because the reality today is that the industrial sector is already a major consumer of hydrogen, but we need to shift from fossil fuels-based to renewables-based hydrogen. This calls for urgent industrial policy support, and high priority for green hydrogen policy should be placed on the industrial sector.”
Similarly, the European Union (EU) views green hydrogen as a critical component of a transition away from imported natural gas. Ruud Kempener, Policy Officer for the European Commission, stated that the Commission’s aim for green hydrogen use in industry is 50% by 2030. The EU’s present objective is 5.6 million tonnes of green hydrogen by 2030, but it appears to be capable of exceeding that figure by producing 10 million tonnes locally and importing an additional 10 million tonnes.
Such a target in the EU alone could result in huge demand centers that help jumpstart green hydrogen economies of scale. However, cost, technical constraints, a lack of a market for green materials and goods, a lack of sufficiently ambitious policies, and the risk of carbon leakage continue to impede the use of green hydrogen in industry.
According to IRENA’s recent analysis, green hydrogen industrial policies should begin with the adoption of decarbonisation plans and sector-specific planning. Prioritization, carbon pricing, and support programs are more critical than market development methods for green products.
However, stimulating the market demands prudent implementation as well. This is why members of IRENA’s Coalition for Action have emphasized the critical nature of tracking systems for the green hydrogen sector’s development.
The lead authors of the Green Hydrogen Certification Brief and members of the Coalition’s Decarbonizing End-Use Sectors Working Group, EKOenergy, Siemens Gamesa Renewable Energy, ACCIONA Energa, and IRENA, emphasized during the Policy Talks that the establishment of a national, regional, and international market for green hydrogen is contingent upon the acceptance of tracking instruments certifying its origin.
The Coalition analyzes a set of technical concerns for developing certification systems and outlines the numerous benefits of such schemes in this new brief. Additionally, the brief makes nine essential recommendations to assist policymakers in developing certification systems and establishing a market for green hydrogen to speed the energy transition.
The Policy Talks determined that industrial use of green hydrogen will continue to expand, with demand centers appearing across the globe. Both the public and private sectors must seize this opportunity to carbon-neutralize industry and establish inclusive, sustainable economies.
