Unexpected twists reshaping hydrogen race

Asian countries are rushing to secure deliveries until the EU finalizes its hydrogen standards, and the US is funding local supply chains.

Over the previous year, hydrogen momentum remained strong, but unexpected twists are reshaping the “hydrogen race.”

Two years after having a competitive know-how advantage, the European Union is now developing its regulatory framework. These standards provide certainty for local hydrogen projects and a hydrogen supply chain for export operations. Example: EU-Gulf collaboration.

Project developers believe the location can produce hydrogen. Land, renewable energy, infrastructure, and ports abound. Large projects boost efficiency, but investment blunders can cost billions.

Masdar, a UAE-owned renewable energy firm, invests heavily in hydrogen. It awaits import market laws in EU member states and Asian countries like Japan and South Korea to be an early mover. Masdar applauds Asia’s political will and awaits local incentive packages.

Hydrogen companies are optimistic. The recent US procedures to bring the complete supply chain for green hydrogen technology within its borders are forcing European authorities to build an equally appealing structure to avoid technology providers relocating over the Atlantic.

Hydrogen developers have other reasons to wait besides the regulatory framework. Siemens Energy predicts significant regional projects will not produce green hydrogen within two years.

Gulf nations are advancing trade and politics. Their strategies combine collaboration and competitiveness. Kuwait and Bahrain are investing in other countries’ green hydrogen projects because they have little leeway.

Competition goes beyond hydrogen supplies, as seen by recent US incentive disputes. Hydrogen technology matters. Experts predict major supply chain challenges if only half of the pipeline projects are completed. Technology vendors will shape hydrogen marketplaces.

Slower advancements reduce tensions. Companies would have time to standardize innovative components like electrolyzers, which produce hydrogen from renewable sources, and scale up production of compressors, transformers, and rectifiers.

China might accelerate the supply chain. Experts expect the supply chain to benefit from American initiatives like the Inflation Reduction Act. That’s why EU rules and regulations unlock European investment.

Experts agree that technology-country competition will continue. However, rising demand for these components will benefit all technology vendors.