Towards an International Hydrogen Economy: Implications, challenges, and opportunities

Abstract

Achieving global net zero greenhouse gas emissions by mid-century requires not only increased energy efficiency and direct electrification, but also the use of hydrogen. The emergence of an international hydrogen economy, in which hydrogen can be produced in regions with abundant cheap hydrogen potential and transported to regions with less favorable conditions, could fundamentally change global energy trade in the future. This dissertation examines the various implications, challenges, and opportunities for both importers and exporters, using a variety of methods in both country-specific case studies and international comparative analyses. To maximize economic benefits, exporters should try to anchor hydrogen production within domestic industry. However, not all countries have the industrial capacity to support local production of components for hydrogen technologies. The international market for sustainable technologies is currently dominated by China, which could therefore benefit greatly from green hydrogen projects through technology provision. Current fossil fuel exporters face challenges in transitioning to green hydrogen exports. This is because they are heavily dependent on fossil fuels for both exports and domestic demand. In addition, these countries have less complex industries with limited opportunities for sustainable diversification. The role of carbon capture and storage in future decarbonized energy systems will also influence the international hydrogen market. If importers and exporters accept blue hydrogen as a sustainable option, despite the broader impact of fossil fuel extraction, it could remain the most economical option in the near future.