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Hydrogen: why it is important and its impacts on geopolitics

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While countries around the world are committed to achieving the net zero goalshydrogen has the potential of revolutionize the energy industry global and help solve the climate crisisbecoming a missing piece of the puzzle of energy transformation for decarbonize the most difficult sectors to change. A report by Irenathe International Renewable Energy Agency according to which the possible path on which it could evolve still entails many uncertainties.

It is estimated that by 2050 hydrogen will cover up to 12% of global energy consumptionwith a largely prevalent share of green hydrogen (obtained using renewable sources) and a minority of blue hydrogen (gas reforming combined with the capture and storage of CO2).

With the growing momentum towards creating a global hydrogen market comes the need for a deeper understanding of its wider effects, including the geopolitical aspects. So the Agency conducted an in-depth analysis of the geopolitics of hydrogen.

“Hydrogen could prove to be the missing link for a climate-proof energy future – he comments Francesco La Camera, general manager Irena -. But hydrogen is not a new oil. And the transition does not consist in the replacement of a fuel, but in the passage to a new system with political, technical, environmental and economic upheavals ”.

Hydrogen: the impact on geopolitics

From the report it emerges in the first place that hydrogen is part of a picture of energy transition much larger, and its development and dissemination strategies should not be viewed in isolation. Setting the right priorities for its use will be essential for its rapid deployment and long-term contribution to decarbonization efforts. Irena estimates that by 2050 over 30% of hydrogen could be traded internationally, which is a larger share than natural gas today.

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“With the emergence of more actors and new classes of importers and net exporters on the world stage, the hydrogen trade is unlikely to become militarized and cartelized, contrary to the geopolitical influence of Petroleum he was born in gas”, Declares Irena.
Its international trade is set to grow considerably, with over 30 countries and regions already planning active trade today. Some countries that plan to become importers are already implementing dedicated diplomacy, such as Japan and the Germany; at the same time fossil fuel exporters increasingly see clean hydrogen as an attractive way to diversify their economies, for exampleAustraliaL’OmanL’Saudi Arabia they United Arab Emirates. However, Irena points out that broader economic transition strategies are needed, as hydrogen will not compensate for losses in oil and gas revenues.

“L’green hydrogen it will bring new and different participants to market, diversify routes and supplies, and shift power from the few to the many. With international cooperation, its market could prove more democratic and inclusive, offering opportunities to both developed and developing countries ”, continues La Camera.

The 2020s could become the era of a great race for technology leadership, as i costs probably they will come down abruptly. In addition, its trade and investment flows, the report reads, will generate new models of interdependence and lead changes in bilateral relations. Countries with an abundance of low-cost renewable energy could become producers of green hydrogen, with commensurate geo-economic and geopolitical consequences.

Hydrogen could be an attractive avenue for exporters of fossil fuels to help diversify their economies and develop new export industries. Finally, supporting the progress of renewable energies and green hydrogen in developing countries is essential to decarbonise the energy system and can contribute to global equity and stability.
International cooperation will be needed to create a transparent market with consistent standards and norms that contribute significantly to climate change efforts.

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