Cost-competitive production key creating $700 b H2 economy

BUSINESS REPORTER

Green hydrogen (H2) has become a key agenda topic for policymakers and industrial players, driven by global decarbonisation efforts and the commercial opportunities that could follow.

Although ambitious targets are now being pursued through related projects, the possibilities that accompany the green H2 economy depend on several conditions across policy, supply, infrastructure, and demand.

Arthur D Little (ADL), the leading management consultancy firm, has expounded on this viewpoint in their latest report entitled ‘Paving the way for green hydrogen: Key considerations for green H2 deployment’.

The document examines the role green H2 will have in the future, elaborating on promising use cases and the next steps needed for successful deployment.

“Decarbonisation has been raised again on top of world’s agenda and countries are actively seeking to lower emissions and transition to clean energy sources,” explained Carlo Stella, Partner at Arthur D Little Middle East.

“The 2015 Paris Agreement has instigated widespread action, with leaderships encouraging technology-backed decarbonisation in the years since. Green Hydrogen has been identified as a key technology to bridge decarbonisation ambitions, if the basic conditions and some pressing requirements are met in the short term.”

The Middle East is witnessing green hydrogen projects being pursued in an industry projected to reach $700 billion by 2050.

Many governments in the Middle East are currently exploring opportunities that can be exploited in this field, as green hydrogen helps reduce economic dependence on hydrocarbons and contributes to economic development and diversification of energy supply. Furthermore, foreign policy and bilateral agreements are also reinforcing the green H2 economy’s importance.

“Strategic alliances are certain to be impactful as countries and industry players work together to realize their shared and mutual green H2 objectives,” revealed Eddy Ghanem, Principal at Arthur D Little Middle East.

“That being said, the complex nature of green H2 production cannot be overlooked, and having dual sources of renewable energy is another necessity for sustained decarbonisation success.”

The outputs of ‘Paving the way for green hydrogen: Key considerations for green H2 deployment indicate three conditions are necessary for the success of green hydrogen generation projects: cost-competitive production, reliability of production and supply, and hedging of risks to attract investors. Potential hydrogen demands are also examined, while decision-makers are provided with valuable opportunities analysis, risk limitation, and other risks and conditions related to policies and infrastructure.

“Although green H2 projects are being pursued and more investments finalised, this momentum can only continue if thriving conditions are secured in the areas of policy, supply, infrastructure, and demand,” concluded Carlo Stella.

“Through a collective effort based on transparency, collaboration, and innovation, interested parties can deliver on companies and countries decarbonisation commitments, successfully deploying green H2 to usher in a new chapter of renewable energy transformation.”