Green hydrogen is all the rage these days. During the United Nations Climate Change Conference (COP27) in November in Egypt, German Chancellor Olaf Scholz announced that Germany will invest more than 4 billion euros in developing a market for it.
In the United States, President Joe Biden’s administration has made “clean” hydrogen a centerpiece of its Cut Inflation Act, which provides subsidies for renewable energy. China is also so committed to electrolysis that some observers already fear it will take over the market in the same way it did with photovoltaic panels. And even corporations like Australian mining giant Fortescue are betting on it becoming a multibillion-dollar industry.
When a technology is promoted to such an extent, many environmental activists tend to get nervous. Is “clean hydrogen” simply a way of greenwashing “blue” and “pink” hydrogen, generated from natural gas and nuclear power, respectively?
Is it an attempt to produce a magical technological fix that vindicates absurd excesses like space tourism and hypersonic flight, when the world’s upper and middle classes should be reducing their consumption of energy and resources? Or is this the next stage of extractivism, taking land and water from low-income populations under the guise of fighting climate change?
The short answer to all these questions is yes. But that is not inevitable nor is it the whole story. Yes, the dream of green hydrogen could well turn into a nightmare if we don’t get it right.
Still, it is an indispensable component of the transition of the global economy from climate-destroying fossil fuels to sustainable models based on 100% renewable energy. It may be difficult to accept this ambiguity, but the urgent need to avoid a climate catastrophe requires no less.
Given the many potential applications of hydrogen, some leading experts estimate that it could generate between 20 and 30% of global energy consumption by mid-century. But that doesn’t necessarily make it the most efficient option.
Electric batteries, for example, require far fewer renewable kilowatt hours per mile traveled to power cars and trucks than do hydrogen fuel cells or e-fuels. Similarly, using heat pumps is more efficient than converting gas boilers to hydrogen. Organic alternatives to nitrogenous fertilizers should also receive much more consideration.
But there are several critical sectors with few economically viable zero-carbon alternatives to green hydrogen and its derivatives, including long-haul shipping and aviation, chemicals and steelmaking. Despite the hype, many industries will clearly need large amounts of clean hydrogen to achieve net zero emissions by 2050.
To illustrate the scale of the challenge, Bloomberg New Energy Finance founder Michael Liebreich recently estimated that simply replacing today’s “dirty” hydrogen, produced from fossil fuels, would require 143% of the wind and solar power that the world currently has.
Several countries in the Global South have been blessed with world-class solar and wind potential, allowing them to produce green hydrogen at low cost. Some, like Namibia, have built their industrial development strategy around this competitive advantage.
But how could the international trade in green hydrogen and its derivatives become a path to prosperity? And how can developing countries avoid the green extractivism trap and ensure that trade is fair and sustainable?
A series of consultations and studies in Chile, Argentina, Brazil, Colombia, South Africa, Morocco, and Tunisia have explored these questions in depth. A new report from the Heinrich Böll Foundation and Bread for the World synthesizes their findings and highlights the need to do no harm.
To prevent the dream of green hydrogen from turning into a nightmare, we must develop the sector with territorial planning and clear rules and policies, as well as upholding the right of local communities to prior informed consent.
To fulfill the promise of post-fossil development and foster sustainable economies, governments must devise ambitious and realistic industrial strategies. And these strategies must be embedded in a systemic approach to sustainable development and energy transition. Also, we need to consider how hydrogen is used, not just who can afford it.
None of this will happen on its own. Achieving a sustainable future is a political choice that requires leadership and cooperation. Several countries could help make fair and sustainable trade in green hydrogen a reality.
Namibia, Chile, Colombia and now (under President Luiz Inácio Lula da Silva) Brazil, for example, have the right political conditions to balance green hydrogen production with strict environmental and social standards. Over time, Argentina and South Africa could join this list and become producing countries.
As a potential major importer and consumer of green hydrogen, Germany would need to form alliances with producing countries, based on strong environmental and social standards. And given his progressive government, he can be expected to have long-term conversations with his partners not just as providers of resources, but as fellow travelers on the journey towards sustainable and inclusive prosperity.
To that end, Germany and other energy importers must also support exporting countries in their efforts to localize value creation. In this way, the emerging international trade in green hydrogen could become a harbinger of a new equitable trading relationship between the Global North and South. That’s a future worth fighting for, and renewable energy is the key. —© Union Project
Jörg Haas is director of international policy at the Heinrich Böll Foundation.
