Green hydrogen is produced using renewable energy instead of fossil fuels. It can be used as a clean power source for sectors such as manufacturing and transportation, but it is expensive to produce and difficult to transport. Still, an expected surge in demand for low-carbon hydrogen — which includes green hydrogen has prompted several countries to announce plans to build hydrogen exporting capabilities. Nearly 60% of such projects are in Australia and the Middle East. Both Australia and the Middle East are near potential major importers in Northeast Asia and Europe. Australia has an edge in exporting green hydrogen to Northeast Asia given its existing trading relationship with the region.
Demand for low-carbon hydrogen could rise six-fold to as high as 530 million tonnes by 2050 — if countries keep global warming within 1.5 degrees Celsius above pre-industrial levels. Almost 150 million tonnes of that low-carbon hydrogen demand could be shipped via sea, said the consultancy. Northeast Asia could account for about 55% of that seaborne hydrogen trade, while Europe could make up 16%, it projected. The costs of producing green hydrogen are expected to fall as the technology improves and renewable electricity costs decline. That will help nudge producers toward the clean energy source.