Baku: Renewable hydrogen and hydrogen-derived commodities such as ammonia, methanol and e-kerosene, are expected to play an important role in the transition to low-carbon energy because they are essential to decarbonize sectors such as heavy industry and transport.
While most energy consumption can be met using renewable electricity or biofuels by 2050, the use of renewable hydrogen and its derived commodities will be required in hard-to-abate sectors, including in industry as feedstocks (e.g. chemical manufacturing, fertiliser production, refining, steel manufacture) and heavy-duty transport as e-fuels (e.g. in maritime transport and aviation). Their use may account for around 14% of final energy consumption in 2050.
A report titled Enabling global trade in renewable hydrogen and derivative commodities, jointly launched here today by the International Renewable Energy Agency (IRENA) and the World Trade Organization (WTO) Secretariat at the 29th UN Climate Change Conference (COP29), highlights the critical role of sound, coherent strategies in promoting the use of renewable hydrogen and hydrogen-derived commodities.
Differences in climate conditions and economic circumstances are expected to drive cost variations for the production of renewable hydrogen, hydrogen-derived feedstocks and e-fuels in different geographies. Economies with abundant renewable resources may increasingly emerge as renewable energy exporters, whereas economies with strong industrial sectors but limited renewable energy sources may need to rely on imports to decarbonize their processes.
To develop a robust international market for these commodities and fuels, physical infrastructure is needed; for example, pipelines and shipping facilities are necessary to transport commodities from producers to consumers. Robust market development will be supported by establishing and elaborating plans and strategies for the development of supply chains around technologies and vital inputs (such as water and carbon sources for the production of methanol and e-kerosene).
Moreover, the development of sound and coherent policy frameworks will foster market growth, support sustainable production, and facilitate international trade flows. Besides, engaging communities and building social acceptance helps to facilitate successful projects.
The report outlines key policy considerations for fostering trade in renewable hydrogen and its derivatives. It provides policymakers with “practical” suggestions, including trade-related tools, to support the transition to sustainable energy. It stresses that international collaboration is essential to lower trade barriers and build stable demand for renewable hydrogen and its derivatives.
Success in building renewable hydrogen markets, in turn, will drive green industrial development and job creation while supporting an efficient transition to low-carbon energy, the report adds.
– global bihari bureau
