BAKU, Azerbaijan, August 13
By Leman Zeynalova – Trend:
Due to a lack of capacity and physical resources, a number of countries, including those in Europe and Asia, will struggle to meet their demand for blue and green hydrogen, Trend reports with reference to Fitch Solutions.
This is while other countries, such as some GCC states and Australia, are looking to develop hydrogen technologies and position themselves to become major hydrogen exporters.
“These imbalances can be addressed through increased international hydrogen trade, but the success of this will depend largely on supporting policies and regulations, adequate infrastructure, as well as strengthening trade relations between countries. We expect that the development of ‘hydrogen hubs’ will remain a favoured pathway for the sector's development, offering distinct benefits in reducing costs and concentrating expertise. That said, as the global hydrogen market grows substantially by 2050, the majority of demand will be met through trade,” reads a report released by Fitch Solutions.
Hydrogen's role in the power sector is predicted to have a share of 15 percent, allowing for more flexible electricity generation, according to GlobalData. With hydrogen rapidly becoming popular as a low- or zero-carbon energy source, most countries are considering a hydrogen-based economy as a solution to the increasing carbon emissions, energy stability, and climate change issues.
Already, a large number of countries are creating multilateral alliances and bilateral trade and cooperation agreements with one another, where potential, as well as major producers of hydrogen, such as Australia, Chile and a number of MENA states, will be able to export to countries whose domestic production capacity cannot meet their high demand, such as Germany and Japan. Potential European importers have already declared a preference for green hydrogen, but large Asian states, such as Japan, China and South Korea have an energy strategy revolving around a combination of grey, blue and green hydrogen, which would mostly be supplied by blue hydrogen exporters in the GCC. While GCC states use high volumes of grey hydrogen from their vast natural gas resources, many MENA countries have made moves to gear themselves for the production of blue and green hydrogen. For example, in September 2020, Saudi Arabia transported the world's first blue ammonia cargo to Japan for the purpose of emissions-free electricity, which marks the importance of ammonia trade as an energy vector. Furthermore, Japan's Suiso Frontier, the first vessel designed to carry liquid hydrogen globally, is set to begin shipments from Australia between October 2021 and March 2022. That said, a number of major economies, such as the US and China, are not expected to become major players in the export of hydrogen due to their extensive domestic demand for it, which means that the majority of their investment and production of hydrogen will be geared to their local markets. Below, we highlight some major potential hydrogen exporters, as well as importers:
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