Decarbonisation of societies and economies is one of the biggest challenges of this century.
The power sector can be largely decarbonised by further expanding renewable electricity
production. However, electrification reaches its limits when it comes to long-term storage and
long-distance transport. In addition, several applications – particularly in the industry and
transport sector – cannot be directly electrified at a reasonable cost.
This is where green or renewable hydrogen has a key role. Green hydrogen is produced by
electrolysis using renewable electricity and can subsequently be transformed into secondary
products (also known as derivatives). These derivatives find widespread application across
various sectors (referred to as X), both in terms of material usage and energy utilisation. This
approach is commonly known as Power-to-X, or simply PtX.
The levelized costs of electricity from renewables – and hence the levelized costs of green hydrogen – are highly dependent on local geographic and meteorological conditions.
It is therefore reasonable to establish significant green hydrogen production capacities not only in high energy consumption regions, such as the European Union (“EU”), but also in countries where the production conditions are particularly favourable, and where decarbonisation can therefore be achieved most efficiently.
Some of the countries with favourable conditions are developing and emerging economies, where the energy demands are also set to increase as a share of the global total. It is therefore of upmost importance to intensify and support the energy transition in these countries, not only to achieve net-zero emissions on a global scale, but also to ensure sustainable economic and social development
