During the COP28 climate conference on Tuesday, numerous hydrogen initiatives were revealed, signaling a collective effort to enhance the production and trade of this low-carbon fuel.
Representing over 30 countries, accounting for approximately 80% of the future global hydrogen market, a declaration of intent was signed. This pact commits nations to endorse a universal certification standard for hydrogen, aiming to recognize and build upon existing certification schemes.
Simultaneously, a public-private action statement on hydrogen was signed, focusing on expediting permissions for hydrogen projects and fostering increased demand for the commodity.
Addressing the hydrogen roundtable at the summit, Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, emphasized the significance of providing an affordable alternative fuel for effective decarbonization. He stated that consumer judgment would play a pivotal role in determining the success of these efforts.
Hydrogen, produced from both renewable energy and natural gas, is anticipated to be a pivotal fuel, especially in hard-to-abate sectors such as steel manufacturing and shipping. Its energy storage capabilities make it an attractive option for intermittent renewable sources like wind and solar.
Despite its potential, hydrogen faces challenges related to cross-border trade due to inadequacies in certification systems. The current systems lack uniformity in design, standards, and labeling, leading to informational gaps for potential buyers.
Hydrogen, particularly green h2, is currently more expensive than natural gas due to production and supply constraints, primarily stemming from a shortage of electrolysers. The International Energy Agency predicts a significant increase in electrolysis capacity by 2030, potentially exceeding 400 gigawatts.
To overcome barriers hindering faster adoption, international collaborations are deemed crucial. An International Standards Organisation methodology for the greenhouse gas emissions assessment of hydrogen was launched to set the groundwork for future regulations at various levels.
French investment bank Natixis estimates hydrogen investments to surpass $300 billion by 2030. The newly introduced guidelines for assessing the greenhouse gas footprint of hydrogen aim to establish a common international language around hydrogen.
It is anticipated that nearly 25% of global hydrogen demand by 2050, approximately 150 megatonnes per year, will be met through international trade. This transformation in hydrogen trade will differ significantly from the current oil market, where nearly three-quarters of production is internationally traded.
Hydrogen Deals Announced at COP28:
Several energy companies disclosed hydrogen-related agreements during the COP28 summit:
- Masdar and Iberdrola signed a €15 billion ($16.25 billion) partnership to explore offshore wind and green hydrogen projects in Germany, the UK, and the US.
- Masdar partnered with Jordan for a 1-gigawatt wind project with battery storage and explored the feasibility of establishing a green hydrogen plant.
- Adnoc and Azerbaijan agreed to explore opportunities in blue hydrogen, carbon management, and geothermal technologies.
- The UAE aims to produce 1.4 million tonnes of hydrogen annually by 2031, rising to 15 million tonnes per year by 2050. Over 70% of the country’s hydrogen production is envisioned to be green. Al Mazrouei expressed the UAE’s commitment to exporting hydrogen, especially green hydrogen, to assist other nations.
