Western and Asian corporations are collaborating on enormous projects to develop green hydrogen, a promising power source.
Major Western oil firms and Denmark’s largest offshore wind power business, Orsted, are considering entering the market.
Green hydrogen, a power-generating fuel that doesn’t release CO2, is in high demand worldwide. Europe has led the industry in renewable energy, but Asia is increasingly producing.
Last year, Orsted joined POSCO in an offshore wind power project. The companies are also studying the manufacturing of green hydrogen, which might offer “hydrogen steel,” which uses hydrogen instead of coal.
Denmark-based Orsted splits water molecules to make green hydrogen using offshore wind power. After several North Sea projects, it wants to apply its expertise in Asia.
Western oil giants are also investing. BP invested 40.5% in the massive Australian Asian Renewable Energy Hub. The British multinational wants 10% of the global green hydrogen market by producing 1.6 million tonnes per year.
Chevron, Pertamina, and Keppel Corporation, a government-affiliated Singapore corporation, are investigating Southeast Asian geothermal power-generated green hydrogen manufacturing. Future production is 80,000–160,000 tonnes.
As global decarbonization accelerates, hydrogen will be used more for power generation. The steelmaking and car sectors in Asia are significantly growing hydrogen demand.
The Hydrogen Council, a group of over 150 international firms, and McKinsey & Company predict that China, India, Japan, and South Korea will consume 285 million tonnes of hydrogen in 2050, 43% of the world’s total.
China, the largest hydrogen consumer, wants to lead green hydrogen generation. Sinopec is building a 20,000-tonne-a-year manufacturing factory.
Taking advantage of its huge land, abundant sunlight, and cheap renewable energy sources, India is planning big projects. Japan will benefit from Asia-Pacific green hydrogen production.
According to the International Renewable Energy Agency, Japan’s hydrogen costs $2.50 per kilogram, whereas Australia and India’s will drop to $0.70 by 2050. Green hydrogen’s appeal in Japan will grow as importing becomes cheaper.
Japanese traders are buying stakes. Mitsui & Co. will invest 28% in an Engie subsidiary’s 2024 green hydrogen generation project in Australia. Mitsubishi Corporation, Pertamina, and others are establishing a production base in the country.
If hydrogen costs more than in other countries, a country’s manufacturing industry will lose competitiveness. The public and commercial sectors in Germany have invested in a low-cost hydrogen production plan and signed a purchasing agreement.
Japan’s governmental and private sectors have acquired considerable oil and LNG stakes until now. Green hydrogen requires public-private collaborations for industrial competitiveness.