Green hydrogen needs supportive government policies to fuel energy transition: IRENA

Hydrogen produced with renewable energy, also known as green hydrogen, offers a promising pathway to decarbonisation, especially in “hard-to-abate” industries. However, government support and the right policy options remain vital in the ramp up of the development of the green hydrogen sector.

A new report released by International Renewable Energy Agency (IRENA), Green Hydrogen Supply: A Guide to Policy Making, highlights the key barriers and challenges for the production and transportation of green hydrogen. The report further outlines policy options available to foster the development of a green hydrogen industry:

• Supporting electrolyser deployment: Reducing GHG emissions in hard-to-abate sectors require large amounts of green hydrogen, more than existing (mostly grey) hydrogen production. A rapid scale-up in the number and overall capacity of the electrolysers used to produce hydrogen is needed. IRENA’s World Energy Transitions Outlook projects potentially 400 Mt of green hydrogen consumed by 2050, produced by a total installed capacity of 5 TW for electrolysers.
• Ensuring electricity is sustainable (and support its cost-competitiveness): Once electrolysers are built, the electricity used for electrolysis must be renewable-based for green hydrogen production. To compete with traditional carbon-intensive hydrogen, this electricity must be affordable.
• Incentivising green hydrogen demand: The report suggests that green hydrogen will likely continue to be more expensive than grey hydrogen and fossil fuels for at least the next decade. However, policymakers can boost demand for green hydrogen by closing the price gap between grey hydrogen and fossil fuels, strengthening its presence in the gas market, or identifying off-takers outside of national borders.
• Supporting hydrogen infrastructure: A viable hydrogen infrastructure requires green hydrogen to be delivered from the point of production to the point of usage, which is currently energy-consuming and costly. The report outlines policies that can support the industry through repurposing hydrogen grids, and encouraging seasonal storage, green ships, and green trucks.
• Supporting research and development: Governments play a central role to support greater research and innovation to make green hydrogen competitive, such as through providing research and development funding for technological innovation to reduce the cost of producing hydrogen, such as creating cost competitive electrolysers, and for pilot projects.

Read the full report to discover more about the current industry challenges and policies that will support green hydrogen across the value chain.

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