Traditional energy exporters stand to lead global hydrogen trade - WoodMac

Image: Next Hydrogen.

November 2 (Renewables Now) - Global hydrogen demand could rise six-fold to 530 Mt by 2050 under a scenario devised by research firm Wood Mackenzie, and some exporters of traditional energy products are better equipped to carve out space in the hydrogen trade, the firm said.

“[T]he dynamics of the future global trade in hydrogen are likely to look similar to those of traditional fossil fuels. Northeast Asia, including China, and Europe will be the big importers of hydrogen; Australia, the Middle East and, possibly, Russia and the US have the greatest potential to be big exporters,” said Gavin Thompson, vice chairman, energy for Wood Mackenzie’s Asia Pacific business.

Projects for hydrogen exports are being developed in Saudi Arabia, Brazil, Chile, Oman and Kazakhstan, but the Middle East in general and Australia in particular emerge above others due to their abundance of solar resources and potential to deliver cheap green hydrogen.

Nearly 60% of proposed export projects for green hydrogen are located in the Middle East and Australia, mostly aimed at markets in Europe and Northeast Asia, WoodMac says.

Russia, Canada, the US and the Middle East, with their vast low-cost gas resources and carbon capture and storage (CCS) capacity, are in the best position to take advantage of their existing competence in the fossil fuel space to develop and export blue hydrogen.

According to WoodMac’s analysis, several factors will decide who gets to benefit the most from the hydrogen trade in the coming era.

“Project developers, lenders and buyers will be drawn to locations with a proven track record of exporting natural resources, suitable conditions for low-cost renewable electricity and the potential for large-scale carbon capture,” the research firm says.

Established market position and developed supply chains for blue hydrogen can help exporters expand into green hydrogen as it becomes cheaper over time. Proximity to off-take markets will be another important factor, since conversion and transport costs make up as much as two-thirds of the delivered cost of the inter-regional hydrogen seaborne trade, says WoodMac.

“The global energy trade is set to see its largest disruption since the 1970s and the rise of the Organization of the Petroleum Exporting Countries (OPEC),” notes Wood Mackenzie research director Prakash Sharma. “Low-carbon hydrogen and its derivatives could account for around a third of the seaborne energy trade in a net zero 2050 world.”

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Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.

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