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首页文档碳中和资料研究报告世界能源理事会-低碳氢规模扩大的区域性洞察-50页

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In collaboration with PwC and EPRI
WORLD ENERGY INSIGHTS: WORKING PAPER
REGIONAL INSIGHTS INTO
LOW-CARBON HYDROGEN
SCALE UP
2
WORLD ENERGY COUNCIL IN COLLABORATION WITH EPRI AND PWC
The World Energy Council has been at the heart of global, regional and national energy debates for
nearly a century, developing new thinking and driving eective action around the world to achieve the
benefits of sustainable energy for all.
Comprised of over 3,000 member organisations in nearly 90 countries, drawn from governments,
private and state corporations, academia and new and wider system shapers stakeholders, the Council
is the world’s first and only truly global member-based energy network.
The Council works dynamically across the whole energy sector as a global energy transitions platform,
pulling together intelligent leadership to catalyse and inform the world’s energy policy dialogue,
create impact and drive practical action.
The Council does not advocate for any country, company, technology or source of energy. The World
Energy Council remains thoroughly committed to the challenge of being both impartial and impactful.
To learn more visit www.worldenergy.org
Published by the World Energy Council April 2022
Copyright © 2021 World Energy Council. All rights reserved. All or part of this publication may be
used or reproduced as long as the following citation is included on each copy or transmission: ‘Used by
permission of the World Energy Council’.
World Energy Council
Registered in England and Wales No. 4184478
VAT Reg. No. GB 123 3802 48
Registered Oce
62–64 Cornhill
London EC3V 3NH
United Kingdom
WORLD ENERGY
COUNCIL
ABOUT
THE WORLD
ENERGY
INSIGHTS
These World Energy Insights on hydrogen are part of a series of publications by the World Energy
Council focused on Innovation. They were developed in collaboration with the Electric Power
Research Institute (EPRI) and PwC.
EPRI and Gas Technology Institute (GTI) have created the Low-Carbon Resources Initiative (LCRI)
to address the challenges and gaps in achieving deep carbon reductions across the energy economy.
LCRI is focused on the value chain of alternative energy carriers and low-carbon fuels—such as
hydrogen, ammonia, biofuels (including renewable natural gas), and synthetic fuels—and research,
development, and demonstration to enable their production, storage, delivery, and use across the
energy economy. These energy carriers/fuels are needed to enable aordable pathways to economy-
wide decarbonization by mid-century. This five-year, global collaborative will identify and accelerate
fundamental development of promising technologies; demonstrate and assess the performance
of key technologies and processes, identifying pathways to possible improvements; and inform key
stakeholders and the public about technology options and potential pathways to a low-carbon future.
PwC is a network of firms in 155 countries with over 284,000 people committed to delivering quality
in assurance, advisory and tax services, including more than 20,000 professionals engaged in the
energy, utilities and resources sectors. With its global strategy, The New Equation, PwC is responding
to the challenges shaping the world today, with a focus on building trust and delivering sustained
outcomes that create value for organisations, their stakeholders and broader society. Climate change
is one of the world’s most pressing problems, and PwC has committed to reach net zero greenhouse
gas emissions by 2030 and is working with organisations to accelerate their own climate-based
transformation. PwC and the World Energy Council have a common goal of promoting energy
transition and sustainability by engaging with policymakers and leading industry players. Our shared
view is that energy transition and sustainability are achieved through the interaction of robust policy
frameworks and a strong, competitive energy industry. Learn more about PwC
In a fast-paced era of disruptive changes, these insights aim to facilitate strategic sharing of
knowledge between the Council’s members and the other energy stakeholders and policy shapers
and contribute to a global dialogue on hydrogen’s role in energy transitions. These insights build upon
earlier work by the Council, notably the release of the “Hydrogen on the Horizon” series in July and
September 2021, and involved regional in-depth conversations with 180+ high-level experts from 67
countries, reflecting 82% of the global Total Primary Energy Supply – TPES (2019 data, U.S. EIA) and
89% of global GDP (2020 data, WB).
The analysis and forecasts available in this publication and any associated references do not reflect the
military conflict occurring in Ukraine. Although we acknowledge that the situation in Ukraine and the
resulting disruptions in energy markets will greatly aect the future of low-carbon hydrogen, this release is
based on analysis prior to the February 2022 events.
3
WORLD ENERGY INSIGHTS: WORKING PAPER | REGIONAL INSIGHTS INTO LOW-CARBON HYDROGEN SCALE UP
TABLE OF CONTENTS
04
14
13
19
34
51
53
54
39
PAGES
EXECUTIVE SUMMARY
REGIONAL INSIGHTS
ENABLERS FOR LOW-CARBON HYDROGEN MARKET RAMP-UP
ANNEX 2: LIST OF LOW-CARBON HYDROGEN VALLEYS
REFERENCES
ACKNOWLEDGMENT
ANNEX 1: REGIONAL DASHBOARDS
INSIGHTS ON HYDROGEN SUPPLY CHAINS DEVELOPMENT
INTRODUCTION
Africa
Africa
Context
Low-carbon hydrogen: a global commodity in the future?
Low-carbon hydrogen price developments
Latin America and the Caribbean
Latin America and the Caribbean
Asia-Pacific
Asia-Pacific
Middle East & Gulf States
Middle East & Gulf States
Europe
Europe
North America
North America
3
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IncollaborationwithPwCandEPRIWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP2WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCTheWorldEnergyCouncilhasbeenattheheartofglobal,regionalandnationalenergydebatesfornearlyacentury,developingnewthinkinganddrivingeectiveactionaroundtheworldtoachievethebenefitsofsustainableenergyforall.Comprisedofover3,000memberorganisationsinnearly90countries,drawnfromgovernments,privateandstatecorporations,academiaandnewandwidersystemshapersstakeholders,theCouncilistheworld’sfirstandonlytrulyglobalmember-basedenergynetwork.TheCouncilworksdynamicallyacrossthewholeenergysectorasaglobalenergytransitionsplatform,pullingtogetherintelligentleadershiptocatalyseandinformtheworld’senergypolicydialogue,createimpactanddrivepracticalaction.TheCouncildoesnotadvocateforanycountry,company,technologyorsourceofenergy.TheWorldEnergyCouncilremainsthoroughlycommittedtothechallengeofbeingbothimpartialandimpactful.Tolearnmorevisitwww.worldenergy.orgPublishedbytheWorldEnergyCouncilApril2022Copyright©2021WorldEnergyCouncil.Allrightsreserved.Allorpartofthispublicationmaybeusedorreproducedaslongasthefollowingcitationisincludedoneachcopyortransmission:‘UsedbypermissionoftheWorldEnergyCouncil’.WorldEnergyCouncilRegisteredinEnglandandWalesNo.4184478VATReg.No.GB123380248RegisteredOce62–64CornhillLondonEC3V3NHUnitedKingdomWORLDENERGYCOUNCILABOUTTHEWORLDENERGYINSIGHTSTheseWorldEnergyInsightsonhydrogenarepartofaseriesofpublicationsbytheWorldEnergyCouncilfocusedonInnovation.TheyweredevelopedincollaborationwiththeElectricPowerResearchInstitute(EPRI)andPwC.EPRIandGasTechnologyInstitute(GTI)havecreatedtheLow-CarbonResourcesInitiative(LCRI)toaddressthechallengesandgapsinachievingdeepcarbonreductionsacrosstheenergyeconomy.LCRIisfocusedonthevaluechainofalternativeenergycarriersandlow-carbonfuels—suchashydrogen,ammonia,biofuels(includingrenewablenaturalgas),andsyntheticfuels—andresearch,development,anddemonstrationtoenabletheirproduction,storage,delivery,anduseacrosstheenergyeconomy.Theseenergycarriers/fuelsareneededtoenableaordablepathwaystoeconomy-widedecarbonizationbymid-century.Thisfive-year,globalcollaborativewillidentifyandacceleratefundamentaldevelopmentofpromisingtechnologies;demonstrateandassesstheperformanceofkeytechnologiesandprocesses,identifyingpathwaystopossibleimprovements;andinformkeystakeholdersandthepublicabouttechnologyoptionsandpotentialpathwaystoalow-carbonfuture.PwCisanetworkoffirmsin155countrieswithover284,000peoplecommittedtodeliveringqualityinassurance,advisoryandtaxservices,includingmorethan20,000professionalsengagedintheenergy,utilitiesandresourcessectors.Withitsglobalstrategy,TheNewEquation,PwCisrespondingtothechallengesshapingtheworldtoday,withafocusonbuildingtrustanddeliveringsustainedoutcomesthatcreatevaluefororganisations,theirstakeholdersandbroadersociety.Climatechangeisoneoftheworld’smostpressingproblems,andPwChascommittedtoreachnetzerogreenhousegasemissionsby2030andisworkingwithorganisationstoacceleratetheirownclimate-basedtransformation.PwCandtheWorldEnergyCouncilhaveacommongoalofpromotingenergytransitionandsustainabilitybyengagingwithpolicymakersandleadingindustryplayers.Oursharedviewisthatenergytransitionandsustainabilityareachievedthroughtheinteractionofrobustpolicyframeworksandastrong,competitiveenergyindustry.LearnmoreaboutPwCInafast-pacederaofdisruptivechanges,theseinsightsaimtofacilitatestrategicsharingofknowledgebetweentheCouncil’smembersandtheotherenergystakeholdersandpolicyshapersandcontributetoaglobaldialogueonhydrogen’sroleinenergytransitions.TheseinsightsbuilduponearlierworkbytheCouncil,notablythereleaseofthe“HydrogenontheHorizon”seriesinJulyandSeptember2021,andinvolvedregionalin-depthconversationswith180+high-levelexpertsfrom67countries,reflecting82%oftheglobalTotalPrimaryEnergySupply–TPES(2019data,U.S.EIA)and89%ofglobalGDP(2020data,WB).TheanalysisandforecastsavailableinthispublicationandanyassociatedreferencesdonotreflectthemilitaryconflictoccurringinUkraine.AlthoughweacknowledgethatthesituationinUkraineandtheresultingdisruptionsinenergymarketswillgreatlyaectthefutureoflow-carbonhydrogen,thisreleaseisbasedonanalysispriortotheFebruary2022events.3WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUPTABLEOFCONTENTS041413193451535439PAGESEXECUTIVESUMMARYREGIONALINSIGHTSENABLERSFORLOWCARBONHYDROGENMARKETRAMPUPANNEX2:LISTOFLOWCARBONHYDROGENVALLEYSREFERENCESACKNOWLEDGMENTANNEX1:REGIONALDASHBOARDSINSIGHTSONHYDROGENSUPPLYCHAINSDEVELOPMENTINTRODUCTIONAfricaAfricaContextLow-carbonhydrogen:aglobalcommodityinthefuture?Low-carbonhydrogenpricedevelopmentsLatinAmericaandtheCaribbeanLatinAmericaandtheCaribbeanAsia-PacificAsia-PacificMiddleEast&GulfStatesMiddleEast&GulfStatesEuropeEuropeNorthAmericaNorthAmerica34WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC4WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCEXECUTIVESUMMARYLow-carbonhydrogencanplayasignificantroleby2040acrosstheworld,tosupportcountries’eortstoachievetheParisAgreementgoalswhilstcontributingtothediversityandsecurityoftheirenergyportfolios.Thiswouldrequiresignificantglobaltradeflowsofhydrogenandhydrogen-basedfuels.Themomentumiscontinuingtogrowworldwide,butdierencesareseenbetweenregions–basedondieringmarketactivitiesandopportunities.Movingfrom“whether”to“how”todeveloplow-carbonhydrogenhighlightssignificantuncertainties,whichneedtobeaddressedifhydrogenistoreachitsfullpotential.Canthechallengesinvarioussupplychainoptionsbeovercome?Canhydrogenplayaroleintacklingclimatechangeintheshortterm?Canbankableprojectsemergeandthegapbetweenengineersandfinancersbebridged?Canthestabilityofsupplyofthemainlow-carbonhydrogenproductionsourcesbeguaranteed?Enablinglow-carbonhydrogenatscalewouldnotablyrequiregreatercoordinationandcooperationbetweenstakeholdersworldwide,tobettermobilisepublicandprivatefinance,andtoshiftthefocustoend-usersandpeople:bymovingfromproductioncosttoend-useprice,developingGuaranteesofOriginschemeswithsustainabilityrequirements,developingaglobalmonitoringandreportingtoolonlow-carbonhydrogenprojectsandbetterconsideringsocialimpactsalongsideeconomicopportunities.By2040,low-carbonhydrogen1couldplayasignificantroleinenergysystemsandenergytransitionsacrosstheworld.Inthecontextofenergytransition,itservestosupportcountries’eortstoachievetheParisAgreementgoalswhilstcontributingtothediversityandsecurityoftheirenergyportfolios.TheWorldEnergyCouncil,incollaborationwithEPRIandPwC,aimstoprovidenewandcriticalinsightstofacilitatestrategicsharingofknowledgebetweentheCouncil’smembersandtheotherenergystakeholdersandpolicyshapers,andcontributetoaglobaldialogueonhydrogen’spotentialroleinenergysystemsandinenergytransitions.Followingthereleaseofthe“HydrogenontheHorizon”seriesinJulyandSeptember2021,theWorldEnergyCouncil,EPRIandPwC,ledaseriesofregionaldeepdivestobetterunderstandregionaldierencesintolow-carbonhydrogendevelopment.Theseregionaldeepdiveshelpeduncovertheregionalrichness,dieringdynamicsforlow-carbonhydrogenuptakeanddistinctivechallengesandopportunities.These“regionalpaths”alsoprovidednewinsightsintotheglobalscalingupoflow-carbonhydrogeninthecomingyears,anditspotentialroleinachievingtheSustainableDevelopmentGoals.ThesenewsfindingsaresynthesisedintheseWorldEnergyInsightsonHydrogen.TAKEAWAYSNoteontheMilitaryConflictinUkraineTheanalysisandforecastsavailableinthispublicationandanyassociatedreferencesdonotreflectthemilitaryconflictoccurringinUkraine.AlthoughweacknowledgethatthesituationinUkraineandtheresultingdisruptionsinenergymarketswillgreatlyaectthefutureoflow-carbonhydrogen,thisreleaseisbasedonanalysispriortotheFebruary2022events.1“Low-carbonhydrogen”inthisbriefingencompassesallhydrogenproductiontechnologiesandsourcesresultinginlowcarbonemissions:fromrenewableenergysources,nuclear,fossilscombinedwithCCUS,etc.4WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC5WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP5Buildinguponearlytechnologydeploymenttakingplacetoday,by2040thedemandforlow-carbonhydrogenmayexceedthecurrentdemandforfossil-basedhydrogentoday.Inadditiontoreplacingexistingfossil-basedhydrogenuses,low-carbonhydrogenopensopportunitiesforapplicationsinnewend-usesinadecarbonisingworld:movingfrompilotprojectstodeploymentatscaleinsectorssuchasmedium-andheavy-dutylandtransport,petrochemicals,ironandsteel,rail,maritimeshipping,andaviation.Insomepartsoftheworld,low-carbonhydrogen,pureorblendedwithnaturalgas,couldalsotakeoasafuelforpowergeneration,forindustrialprocessesandforheatingbuildings.Theextenttowhichlow-carbonhydrogenfulfilsitspotentialdependsheavilyontheevolutionofitskeyproductiontechnologies.Low-carbonhydrogenusecouldcomefromelectrolysis(usingrenewableornucleargeneratedelectricity)orfromfossilfuelswithCCUS.Therelativeeconomicswilldependlargelyontheresourcesavailablelocallyoronthelowestcostimportoptionwhenlocalsupplycannotfulfillocaldemand.Themostcost-eectivelow-carbonhydrogentechnologyandtransportmethodwillvaryineachregionandcouldchangeovertimeasthecostoflow-carbonhydrogenfromrenewableelectricityisexpectedtofallrelativetothecostoflow-carbonhydrogenfromfossilfuels.(FiguresI&II)Thehighcostoftransportinghydrogenmeansthatmosthydrogenwillbeconsumedinthecountryorregionwhereitisproduced.Thetwolargestenergymarkets,ChinaandtheUSA,arelikelytobemoreorlessself-sucientinhydrogen.Nevertheless,thereispotentialforsignificantglobaltradeflowsinhydrogenandhydrogen-basedfuels/chemicalstodevelopby2030ifsucientregionalandglobalcooperationemergeinthenearfuture(FigureIII).Thetrademaphighlightsthepotentialfortwomajorimportinghubs,onecentredaroundNorthEuropeandtheotheraroundJapanandSouthKorea.ThemajorexportingregionsdivideintothosebasedonanabundanceofcheapfossilfuelsandCCUSopportunities(Australia,Canada,MiddleEast,andRussia),andthosebasedonabundantrenewableresources(Africa,LatinAmerica,andMiddleEast).POTENTIALFORASIGNIFICANTROLEBY2040FigureI.Projectedcostby2050oflow-carbonhydrogenfromrenewableelectricitySource:WorldEnergyCouncilFigureII.Projectedcostby2050oflow-carbonhydrogenfromnaturalgaswithCCUSSource:WorldEnergyCouncil567WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCFigureIII.Mapofpotentiallow-carbonhydrogenimport-exportdynamicsin2040WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUPNote:Thismapiswithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Tradelinesinthemapabovearefigurativeanddonotreflecttheactualtrajectoryofpotentialshipments.Source:WorldEnergyCouncilThemapoflow-carbonhydrogenimport-exportdynamicsin2040isbasedonmultipleexternalsourcesandinternalmodifications.Thereare5countrycategories:Stronglyexportoriented,Slightlyexportoriented,Neutral(self-sucient),Slightlyimportoriented,Stronglyimportoriented.Eachcountry’sassessmentwasbasedonenergyexperts’expectationsfortherespectivecountries’positioningintheglobalhydrogentradebytheyear2040.Thiswasbasedonnationalhydrogenstrategies,projectsthathavealreadybeenannounced,andmarkettrends,whichtogethermadeitpossibletoestimatefuturetraderoutes.METHODOLOGYTheenergyexpertswereidentifiedwithintheCouncil’sandPwC’sexperts’communitiesinthedierentregions.80+experts’responseswereaggregatedandsynthesisedtoassignascoretoeachcountry’sstatus.Thefinalpositionintheimport/exportspectrumisbasedontheaveragescoreobtainedamongstexperts,subjecttoaminimumnumberofresponsesisachievedpercountrytoensurerobustnessofthescoreandtakingintoaccountthestandarddeviationoftheresponsesforeachcountrytoreflecttheuncertaintylevel(incaseresponsesforasinglecountryvariedwidely).CountrieswithhighstandarddeviationscoreswerereviewedbytheCouncil’steamandaninformedfinalscoreandstatusassignedaccordingly.Moreover,themappinpointsmajorexportingandimportingcentres,alongwiththeassociatedtraderoutes,andtheclassificationofthecommoditytraded(low-carbonhydrogenwithCCUS,renewablehydrogen,undefined,etc.).Majorexportingandimportingcentreshavebeenidentified,andtheroutesarebasedonselectedplannedorannouncedinternationalhydrogentradeprojectsoronbilateralpartnershipsthatenvisagefuturetradingperspectives,whichwereidentifiedusingtheWorldEnergyCouncil’sownsources,IEA-GlobalHydrogenReview2021,IRENA-GeopoliticsoftheEnergyTransformation:TheHydrogenFactor2022,andtheCouncil’sownassessmentofpubliclyavailabletradeprojectsandocialpartnershipagreementsandMemorandaofUnderstanding.Forsimplificationpurposes,traderoutesconnectedtotheEUflagsymbolisestradewithoneormultipleEUcountries.Forbilateralpartnershipsoutsidethescopeofanytradeactivitiesoflow-carbonhydrogenfuels/derivatives,pleaserefertoFigure13.Finally,themapalsoshowsthemajorhydrogenhubs/valleyswheremostlow-carbonhydrogeninvestments/activitiesareoccurringDetailsarelistedinAnnex2:Listoflow-carbonhydrogenvalleys.Stronglyexport-orientedStronglyimport-orientedExportinglocationImportinglocationHydrogenhubsSlightlyexport-orientedSlightlyimport-oriented7WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC77WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCInterestinlow-carbonhydrogencontinuestogrowrapidly,with22countrieshavingpublishedandestablishedanationalstrategy(including11strategiessinceJanuary2021),morethan400low-carbonhydrogenprojectshavebeenannouncedtodate(IEA,2021),andincreasinginterestfrominvestorsandfinancialinstitutions.Thecostoflow-carbonhydrogenproductiontechnologiesisdecreasingacrosstheglobe,withlow-carbonhydrogenproducedfromrenewableenergyreachingparitywithhydrogenproducedfromfossilfuelsinlocationswherecurrentgaspricesarehigh.ThecurrentmilitaryconflictinUkrainehasbroughtuptheissueofsecurityofsupplybacktothetopofpoliticalagendas.Low-carbonhydrogenusingrenewableresourcesornuclearelectricitycouldoccupyanincreasingplaceinenergyplanstosupportthediversificationofsupplyandsuppliers.Intheshortterm,thiscouldtranslateinmoreprojectsinrenewableenergyandnuclear,increasingsupportforR&Dinalternativefuelsandenergycarriers,andadditionalbilateralpartnershipsbeingdevelopedacrosscountriesforthepotentialfuturetradeoflow-carbonhydrogen.AsforhydrogenderivedfromnaturalgaswithCCUS,uncertaintiesareemerginginregardtoitsroleintheshorttermduetothecurrentvolatilityinnaturalgassupplystabilityandprice.Whilethemomentumforlow-carbonhydrogenisgrowingworldwide,eachregionistakingadierentrouteindeployinglow-carbonhydrogen,anddieringpathswillremaintoaccommodatethespecificitiesofeachregion,country,andcity.Dierencesinlow-carbonhydrogenuptakeacrossregionswillexistduetodierencesinmarketopportunitiesandstakeholders’priorityactions.Hydrogen’sversatilitymakesitrelevantinmanycountries,butapplicationsandsupplychainsdevelopmentshouldbetailoredtoeachspecificcontext.Asregionalsimilaritiesandpotentialsynergiesarise,increasingregionalcooperationshouldbeseenonhydrogendevelopment.(TableIbelow)Movingfrom“whether”to“how”todeveloplow-carbonhydrogenhighlightssignificantuncertainties,whichneedtobeaddressedifhydrogenistoreachitsfullpotential.GROWINGMOMENTUMFORLOWCARBONHYDROGENRESOLVINGTHEUNCERTAINTIES8WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCCanthechallengesinvarioussupplychainoptionsbeovercome?Thelow-carbonhydrogensupplychainiscomposedofavarietyofproductionsources,transportandstoragetechnologies,andpotentialend-uses.Inaddition,allhydrogen-relatedtechnologiesandapplicationswillevolvewithtime,withincreasingoptionsandpotentialpathsavailabletoeachcountry,dependingontheirindividualcontext.Thepluralityofoptionsandthehighevolvingtechnologicallandscapeinthenascentgloballow-carbonhydrogenmarketcreatesadditionaldicultyfordecisionsmakersastowhichsolutionstoinvestinalongthevaluechain.Moreover,thedevelopmentofanationalcolour-blindhydrogenstrategycanincreaselong-termvisibilityforprojectdevelopersandfacilitatetheemergenceofcross-countrycooperationalongthesupplychain.Canhydrogenplayaroleintacklingclimatechangeintheshortterm?Thetimelineforlow-carbonhydrogenprojectdevelopmentisnotsucientlyalignedwiththeneedtoaddressclimatechange.Thereisanurgentneedtodevelopinfrastructureandincreasevolumesofbothsupplyanddemand-includingreplacingcurrentfossil-basedhydrogen-toachievemateriallow-carbonhydrogenpenetrationby2030forhydrogentoplayaroleinreachingParisAgreementgoals.However,infrastructuredevelopmentatscalewillstruggletobereadyintime,particularlyifthereisnoexistinggasinfrastructurewhichcanberepurposed.Therefore,priorityshouldbegivento“quickwin”projects,pilotprojectsandhubs,andprojectsthatareintegratedalongthevaluechaininordertosolvethechicken-and-eggproblembetweenhydrogensupplyanddemand.Canbankableprojectsemergeandthegapbetweenengineersandfinancersbebridged?Thereisagapbetweenwhattechnologyproviderscoulddeployandwhatbankerswillfinance.Whatstepscanbetakentoensurethatnewbusinessmodelswork,andthatlow-carbonhydrogenbecomescompetitivewithalternativeexistingsolutions?Globally,ashiftininvestmentbudgetstowardsgreeninvestmentscanbeobserved,joinedbypandemicrecoveryfundsacrosstheworldfocusedonsustainableinvestments.ThissustainablefinanceandESGmovementcanhelpgovernmentsattractfinancingtofurtherdevelophydrogenprojects.However,withoutgovernmentsupportinde-riskingtheprojects,theystillfaceafinancingproblem.Canthestabilityofsupplyofthemainlow-carbonhydrogenproductionsourcesbeguaranteed?Renewablehydrogenreliesheavilyonthesupplyofelectricityfromrenewableresourcesthatareatthemercyofweatherfluctuations.Extremeweathereventscansignificantlyimpactthesupplyofrenewableenergy,whichcouldthencreatechallengesanduncertaintywiththestabilityofrenewablehydrogensupply.Low-carbonhydrogenderivedfromfossil-fuelswithCCUSalsomayhaveuncertaintyofsupplyduetouncertaintiesinthesupplyofnaturalgasand/ortomajorfluctuationsinitsprice.8WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP8Forlow-carbonhydrogentodevelopatscale,keyenablershavebeenidentifiedwiththeenergycommunityattheglobal,regional,andnationallevel.Scalingupwouldfirstrequiregreatercoordinationbetweenstakeholdersatthegloballevelintheimmediatetermtohelpthemarketdevelopandbettermatchsupplyanddemand.Inthatcontext,bilateralpartnershipsbetweencountriesarecontinuingtodevelopandincreasingincludethetradeoflow-carbonhydrogen(FigureIV).Strongandcoordinatedclimateactionisparticularlyfundamentalindrivinglow-carbonhydrogeninterest–andwiththeappropriatepoliciesinplace,low-carbonhydrogencouldachieveitstruepotentialandhelptoachievethelong-termgoalsoftheParisAgreement.Mobilisingpublicandprivatefinancingisalsocrucialattheglobal,regional,andnationallevelstode-riskinvestments,increasethenumberandvolumeofprojects,andsupportinfrastructuredevelopment.Atthenationallevel,oneofthemostcriticalenablersofhydrogendevelopmentishavingawell-definednationalstrategywhichincludes:plansformarketdevelopmentandtargetstoprovidelongtermvisibility;regulatoryprioritiestounlocklow-carbonhydrogenpotential,notablyadaptinglegislationtoallowforcleanmoleculestobepartoftheenergymix;economicandfinancialmandatesandincentives,includingcarbonpricing,blendingquotas,andlow-carbonfuelcredits.Nationalsupportforthedevelopmentofhydrogenhubsisalsokeytofacilitatethecreationoflocaldemandandsupplyinconcert.Inparticular,thereisanurgentneedtoshiftthefocusontotheusefulnessofenergyforpeople,andtolookatlow-carbonhydrogendemandandtheend-users.Firstly,focusmustbeshiftedtolookatthelow-carbonhydrogenend-userprice.Increaseinlow-carbonhydrogendemandiscostsensitive.Thefocusoftheconversationshouldmovefromhydrogenproductioncosttofinalpriceforendusersandincludetransportcost(challengingastherearemanycomponents,withsomeverydiculttoestimate,suchastransportinfrastructure,localpermitting,etc.),storagecosts,profitmargin,andprovisioningcostsatthefinalpointofconsumption.Thesecostsmaybemuchlargerthanthecostofhydrogenproductionitselfandtheendobjectivetomakehydrogencompetitiveinthelow-carbonfutureisnotproductionatthelowestcost,butsupplyatthelowestpriceforthegreatestbenefitofsocietiesandtheenvironment.Secondly,additionalsupportshouldbefocusedontheend-users.Moresupportonthedemand-sideisneeded,targetingend-usersthatwillconsumehydrogenintheirapplication.Thiscanbeachievedbyprovidingsupplytransparencyandguaranteesforthebuyer.Inparticular,expertsunanimouslycalledforguaranteesoforiginandglobalsustainabilityrequirementstohelpthehydrogenmarketdevelop.GlobalcooperationonthetopicneedstostarttodayifcleanhydrogendevelopmentisgoingtohelpachievethegoalsoftheParisAgreement.However,itshouldbenotedthatagloballyharmonisedmechanismposestheriskofestablishingadeliberatelysimplifiedorlessambitiousframework(i.e.,agreeingonENABLINGSCALE9FigureIV.StateofplayofbilateralpartnershipsSource:WorldEnergyCouncilBilateralpartnershipBilateralpartnershipwithplannedtradeTrilateralpartnershipWORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC10thelowestcommondenominator)andmayrequirealongertimeframetobeadopted,whichmightbeincompatiblewithshort-termcross-countrytradeplans.Currentregulatoryuncertaintyonlow-carbonhydrogen(e.g.,lackofharmoniseddefinitionsofhydrogenproductionmethods,carbonintensityrules,etc.)isdelayinginvestmentandramp-upofindustrial-scaleprojects.Nationalandregionalinitiativesareadvancingonthistopic,butunilaterally,whichcancreatebarriersforglobaltrade.Expertsarethereforecallingforaninternational,recognizedinstitutiontoleadaglobaleorttostandardizethesedefinitions.Additionally,providingmoresupporttoend-usersentailsencouragingtheswitchtolow-carbonalternativesthroughincentivesandotherpolicytools(e.g.,carbonprice,CarbonContractsforDierence(CCFDs),CarbonBorderAdjustmentMechanism(CBAM),orquotas).Finally,supportingend-usersrequiresreducinguncertaintytode-riskinvestment.Whilecurrentpricesandsafetyconcernshinderhydrogenscale-up,intheshortterm,MemorandaofUnderstanding,partnerships,andlong-termcontractsareshapingthemarketandprovidingvisibilityforriskstakers.Asthemarketdevelops,moreflexibilityandcompetitivenesscanemerge.Thirdly,low-carbonhydrogendevelopmentshouldconsidersocialimpactsalongsideeconomicopportunities.Moreemphasisisneededonensuringlocallow-carbonhydrogendemandismetfirstinapplicationswhereitmakeseconomicsensecomparedtoalternatives,particularlyincountrieswithsignificantexistingconsumptionofhydrogenorexportambitions.Developinglow-carbonhydrogenusagedownstreamrequiresitsowntransport,infrastructure,andstoragefacilities,whichcancreatenewskillsandjobsopportunities,particularlyincountrieswithabundantrenewableenergyresources,duetohydrogen’sversatility.Thiscanenabletherespectivesocietiestocapturemorevaluelinkedtolow-carbonhydrogeneconomydevelopments.Akeysuccessfactorforlow-carbonhydrogenuptakerelatestothesociallicenceandtheresultingnecessitytoprovidemoreeducationforthepublicarounditsroleinabatingclimatechangeandtheroleitcouldplayinenergysystemsinrespecttoincreasingequityandjustice.Trainingandoutreachwillbeneededtoincreasehydrogenliteracywithinthegeneralpopulation,andtoimprovetheexistingskillsetacrosstheindustry.Inthatrespect,thedevelopmentofaglobalmonitoringandreportingtoolonlow-carbonhydrogenprojectswouldhelpawarenessandliteracyeortsamongstthegeneralpublic,inadditiontotrackingprogressovertimeandsupportingdecisionmaking.WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCTableI.RegionalInsightsSDGSMarketactivities/opportunitiesRegionalpathsKeyEnablersSDGslegendAFRICAAhugepotentialbutlittleinfrastructure:howdoesAfricaenableanexportmarketaswellasgrowadomesticone?End-usepriorities:1-Energyaccess,2-Agriculture,3-Export,4-IndustryLow-carbonhydrogenproductionsources:1-Renewablehydrogen,2-Naturalhydrogen,3-HydrogenfromnaturalgaswithCCUSDevelopinglow-carbonhydrogencouldhelpAfricaintacklingissuesofenergyaccess,energyindependence,foodsecurityandlocalemploymentAfricahassizeablerenewableenergyresourcestodeveloplow-carbonhydrogenproduction&importantmineralresourcestobepartofthevaluechainofenergytransitiontechnologiesHowever,therearemanychallengestoovercome:somecountries’concreteabilitytotakeadvantageofthehydrogeneconomyislimitedbythelackofinfrastructureandgeneralawareness,politicalandeconomicchallenges,andlackofdemandsecurity,aswellaswaterstressNorthAfricahasmorefavourableconditions-Morocco,AlgeriaandEgyptinparticularcouldbefirstmoversandexportersofhydrogenanditsderivativesIntheearlystageofhydrogendevelopment,thereareopportunitiestounlockinthehydrogeninnovationspacethatcouldpositionAfricancountriesastechnology-setters,nottakersRegional&subregionalcooperation,&cooperationwithimportingmarketstodevelopAfricanhydrogentechnologiesandtocreateasharedvisionforhydrogenGapassessmentsforhumancapitalandinfrastructuredevelopmentDevelopingdomesticdemandinthetransport,industryandagriculturesectorsOutofthe17sustainabledevelopmentgoals(SDGs),scalinguplow-carbonhydrogeninthedierentregionscouldparticularlyhelpachievethefollowing:2:Endhunger,achievefoodsecurityandimprovednutritionandpromotesustainableagriculture7:Ensureaccesstoaordable,reliable,sustainableandmodernenergyforall8:Promotesustained,inclusiveandsustainableeconomicgrowth,fullandproductiveemploymentanddecentworkforall9:Buildresilientinfrastructure,promoteinclusiveandsustainableindustrializationandfosterinnovation11:Makecitiesandhumansettlementsinclusive,safe,resilientandsustainable12:Ensuresustainableconsumptionandproductionpatterns13:TakeurgentactiontocombatclimatechangeanditsimpactsASIAPACIFICMainstreaminglow-carbonhydrogenanditsderivativesandcapturingrelatedeconomicopportunitiesEnd-usepriorities:1-Industry,2-Mobility,3-PowergenerationLow-carbonhydrogenproductionsources:1-“Carbon-free”hydrogen(i.e.,low-carbon;noprejudiceofthetypeofhydrogen-renewablehydrogen,low-carbonhydrogenfromnaturalgasandcoalwithCCUS)Asia-Pacificregionattheepicentreofthemovementtowardsa“hydrogeneconomy”-Japan,SouthKoreaandAustraliareleasedastrategyfirstIntegratedapproachtolow-carbonhydrogen-basedfuelsthatcansupportdecarbonisationeortsacrossamultitudeofapplicationsandsustaineconomicgrowthviainnovationandnewtechnologiesforexportInterestincreasinginothercountries;althoughtheoverarchingplansareyettobereleased,inc.fromkeyplayersChinaandIndiaIntheearlystageoflow-carbonhydrogenuptake:definingprioritiesbetweenfuelscouldfacilitatethescaleupandmoreregionalandglobalcooperationisneededtotackletheobstaclestoglobaltradedevelopment(e.g.,lackofharmoniseddefinitionofhydrogensources,updatingmaritimeregulations,etc.)Increasingbilateralandmultilateralcooperationtoprogressthelow-carbonhydrogenglobalsupplychainandhydrogentradeIntegratedapproachtoenergypolicies&mainstreaminghydrogenanditsderivativesinmanyaspectsofenergysystemsSupportinghydrogen-relatedtechnologiesandincreaseduseinmobilityEUROPEAhighambitiontodecarboniseasfastaspossible,whileincreasingsecurityofsupplyandtacklingtheflexibilityissueEnd-usepriorities:1-Industry,2-MobilityLow-carbonhydrogenproductionsources:1-Renewablehydrogen,2-HydrogenfromnaturalgaswithCCUS,3-Hydrogenfromothersources(nuclear,waste,biogenicmethane,methanepyrolysis,etc.)ImpulsegivenbyGermany-nowEuropeisattheforefrontofhydrogendevelopmentworldwideTheEUplanstorelyheavilyonlow-carbonhydrogentosupportitsdecarbonisationambitions,withhightargetsforimports(fromNorthAfrica,LatinAmerica,GulfStates,etc.)SeveralchallengesintheEU-Moredissonantvoices:e.g.,onblending;onwhichlow-carbonproductionsources,purehydrogenvs.intermediatesteps(e.g.,powertomethane,ammonia,liquidfuels),etc.-Developingharmonisedstandardsandstreamliningregulationsiskeyforlow-carbonhydrogenrampupTimelinegapbetweentheambitiousclimateagendaandhydrogeninfrastructureimplementation:verylargeinfrastructureprojects(notablyforimport)operationalafter2030.Inthemeantime,withinEurope,on-siteprojectsandhydrogenhubsaredeveloping,ando-siteelectrolysersinregionswithhighrenewableenergycapacitiescouldsupplypartoftheEuropeandemandEliminatingregulatoryobstaclesintheEuropeanUnion(andmisalignmentbetweenMemberStates)Moresupportmechanismsfortheproduction-sideandswitchincentivesforthedemand-side(e.g.,CCFDsorquotas)SupportingthedevelopmentofinternationaltradeMorecoordinatedhydrogendiplomacyactionintheEULACIncreasingself-suciencyanddevelopingnewregionalcooperationEnd-usepriorities:1-Industry,2-Mobility,3-Agriculture,4-Export(H2&productsusingH2)Low-carbonhydrogenproductionsources:1-renewablehydrogen,2-hydrogenfromalllocallyavailablefossilfuelswithCCUSWideinteresttodevelophydrogenproductionanduse,focusingmainlyonhydrogenfromrenewableenergy,butconsideringallresourcesavailableonthecontinentDevelopinglocaldemandistheprimaryobjectivetohelpdecarbonisetheeconomyChileistheearlymoverandgavetheimpulseonhydrogeninthecontinent,whichisnowverydynamic;momentumispickingupandregionalcooperationisincreasingThecontinentisattractingincreasedattentionfrompotentialimportingmarkets(e.g.,Netherlands,Australia,Japan)CooperationcouldincreasetoattractmoreforeigninvestmentandinstalltheLACregionintheglobalhydrogenmarketRegionalcooperationtoincreasevisibilityforthecontinentandattractexternalinvestmentsBetteridentifyingandbuildingoneachcountry’sindividualstrengthsforanintegratedlow-carbonhydrogensupplychainMEGSLow-carbonhydrogendrivenbyCircularCarbonEconomyandsustainingenergyexportEnd-usepriorities:1-Export,2-IndustryLow-carbonhydrogenproductionsources:1-hydrogenfromalllocallyavailablefossilfuelswithCCUS,2-renewablehydrogenMomentuminMEGSisdrivenbytheenergyincumbents,inadditiontotheregion’sCircularCarbonEconomyagendaInvestmentsarebeingimplementedwiththeendgoalofsustainingenergyexportstoexistingmarketsinEuropeandAsiaExistingvastoilandgasassets,coupledwithexcellentnaturalresourcesforrenewableenergyproduction,aremakingtheproductionoflow-carbonhydrogenintheregionamongthemostcompetitiveintheworldSaudiArabia,theUAE,andOmanaredrivingthemomentumforlowcarbonhydrogenAspirationstobecomeanexporthuboflow-carbonhydrogenanditsderivativesForeignlawsandregulationscancreatepolicyobstaclesthatmighthinderthesegoals,particularlyregulationsrelatedtopotentialexportsIncreasingregionalcollaborationandlearningfrompreviousfailedattemptsDevelopinglocalecosystemsandend-useapplicationsinthelocalmarketasopposedtoprimarilycreatinganexporthydrogenindustryFinancesubsidiesandsupportmechanismstoenhancethebankabilityoflargepilotprojectsNORTHAMERICAIncreasingself-suciencyanddevelopingnewregionalcooperationEnd-usepriorities:1-Industry,2-Mobility,3-Agriculture,4-Export(H2&productsusingH2)Low-carbonhydrogenproductionsources:1-renewablehydrogen,2-hydrogenfromalllocallyavailablefossilfuelswithCCUSMomentumisemerginginCanadaandinspecificstateswithintheUS.GoalistoincreaseandenhanceoverallresiliencyoftheenergysystemsoverthecomingdecadesHightechnologyreadinessispushingthedomesticmarkettopickupend-useapplicationsparticularlyinthetransportsectorDevelopedregulationsandincentivestargetingcleanmobilityarepushingfurthertheuseoflow-carbonhydrogeninthetransportsectorExportambitionsoflow-carbonhydrogenanditsderivativesarealsoemerging,especiallyastheregionisanexistingenergynetexporterPriorityisonthecreationofhubswheresupplyanddemandarelocatedinthesameplaceScalingandreducingthecostofhydrogentransportanddistributionFundingsupportforR&DandpilotanddemonstrationprojectsCreatinghubscentrestohelpderiskfutureprojectsWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUPWORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC13INTRODUCTIONTheWorldEnergyCouncil,incollaborationwithEPRIandPwC,aimstoprovideabetterunderstandingofhydrogendevelopmentworldwidefortheenergycommunity,buildingontheexpertiseandexperienceofitsglobalnetwork.Inthiscontext,wepublishedthe“HydrogenontheHorizon”series,includinganInnovationInsightsBriefinginJuly2021and3workingpapersinSeptember2021,seekingtostartamulti-stakeholdercommunitydialogueattheglobal,regional,andnationallevelsonhydrogen’sroleinenergytransitions.Thisworkhadidentifiedthefollowing4areasforfurtherdiscussion:ThesenewWorldEnergyInsightsonHydrogenfollowthe“HydrogenontheHorizon”seriesandaretheresultoftheimplementationofthismulti-stakeholdercommunitydialogue.BuildingoninsightsgatheredwithintheCouncil’senergy+community,notablyviahigh-levelinvitation-onlyregionalworkshops,thesenewWorldEnergyInsightsaimtodivedeeperintotheconcretedevelopmentsoflow-carbonhydrogenworldwide,lookingatthedieringroutestakenineachregion,their“hydrogenpath”,andtohighlightshorttermenablersforlow-carbonhydrogentoplayitspotentialroleinenergytransitionsandinenergysystemsby2040.Significantdivergingpathsareemergingacrosscountriesandregions,asnationalhydrogenstrategiesrevealvaryingattitudestowardshydrogen’sroleinenergytransitions.Thissignalsaneedtoembracediversity–eliminatingaone-size-fits-allmindset–andenabledieringtechnologiesandusecasestobeexplored.Confusionover‘colours’isstiflinginnovation,withover-simplificationandcolourprejudiceriskingtheprematureexclusionofsometechnologyroutesthatcouldpotentiallybemorecost-andcarbon-eective.Thereisaneedforfurtherdialoguewhichlooksbeyondcolourtoalsoexplorecarbonequivalence.Demand-centrichydrogenperspectivesareneededtoadvancetheHumanisingEnergyagenda.Thecurrenthydrogenconversationfocusesheavilyonsupply,ignoringtheroleofhydrogenusers.Discussionsmustexplorewhat’sneededtotriggerhydrogendemand,withaspecificfocusonthedevelopmentofhydrogeninfrastructureandaglobalsupplychainforhydrogenandhydrogenvalue-addedproducts.Thehydrogeneconomycouldstimulatejobcreationandeconomicgrowth,potentiallyhelpingtofulfil‘buildforwardtogether’ambitionspost-COVID-19.Severalnationalhydrogenstrategieshighlightjobsasanimportantdriverofhydrogendevelopment,withopportunitiestoreskilltheexistingworkforceandupskillanewworkforce.WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP14Withlow-carbonandinparticularrenewablehydrogenmomentumpickingupsignificantlysince2019inlinewithdecarbonisationtargets,hydrogentradeisswiftlyemergingthroughouttheworld.Thisisevidencedbythelargenumberofbilateralagreementsbetweengovernmentsandjointprojectsbetweencompaniesthatareshapingthemarketatarapidpace.Likeallothercommodities,thetradeinlow-carbonandinparticularrenewablehydrogenisbeingshapedbysupplyanddemandandsupportedbynet-zerofocusedemissionabatementpolicies.Countrieswithexcellentrenewableresources,nuclearelectricityand/orwithsignificantfossilfuelresourcesandCarbonCaptureUtilisationandStorage(CCUS)capacitieswillbesupplyingthedemandmarkets,mainlyinEuropeandAsia.Thedemandforlow-carbonhydrogen,however,isdiculttoforecast,asitdependsonmanydierentfactors,notablyclimatepolicies,end-userpricecompetitiveness,electricitymarketprices,andthefutureuseofnaturalgasandthedevelopmentofcarbonprices.Inprinciple,thedevelopmentoflow-carbonhydrogendemandwillalsodependonproduction,transportandstoragetechnologies’costdevelopmentandtheend-users’willingnesstopay,asthishasadecisiveinfluenceoncompetitivenessandthusonuse.Expertsagreethatthe2020sdecadewillbecrucialtoachievingtheParisAgreement’stargets.Thisdecadeshouldshowimportantdevelopmentsoflow-carbonhydrogeninfrastructureatscale,asvolumesincrease,andpricesareexpectedtodiminish.Duringthisdecade,policysupportandincentivesareneededinordertobalancethedemandandsupplygapandjustifytheinvestmentsininfrastructureandnewapplications.AccordingtotheWorldEnergyCouncil’smapbelow,mostofEuropewillbeimportorientedfrom2030onwards,andthereforeiscurrentlyshapingpartnershipswithmostexportingcountriesintheformofbilateralagreements.Forexample,LatinAmericaisshapingupitsexportpotential,beingledbyChile,withseveralpartnershipswithEuropeancountries.NorthAfricaandEuropearealsoworkingtogetheronexportingrenewablehydrogen,mainlythroughexistingpipelinenetworksfromMoroccoandAlgeria.IntheMiddleEast,shipmentsoflow-carbonammoniaderivedfromfossil-fuelhydrogenwithCCUStechnologyhavealreadybeenexportedfromSaudiArabiaandUAEtoJapan,withmorepartnershipswithAsiancountriesbeingdevelopedtoexportfromUAEandOmantotheAsianmarketsaswellasfromSaudiArabiatoEurope.Finally,Australiaisfiercelycompetingontheexportmarket,withmanyannouncedprojectsandpartnershipswithJapanandSouthKoreaalreadyunderway,includinganewcustom-builthydrogentanker“SuisoFrontier”transportingliquidhydrogenfromAustraliatoJapan.Low-carbonhydrogenuptakeandtradeislikelytobenefitfromcurrentfavourableconditionsusing“transferable”modelsfromothersectors,suchasexistingincentivesandlawsforrenewableenergy,existingindustryandinfrastructureforhydrogenderivedfromfossilfuels,andtheinfrastructurefortheglobaltradeofvariousrawmaterialsandchemicals.INSIGHTSONHYDROGENSUPPLYCHAINSDEVELOPMENTAGLOBALCOMMODITYINTHEFUTURE?LOWCARBONHYDROGEN:Figure1.Mapofpotentiallow-carbonhydrogenimport-exportdynamicsin2040Source:WorldEnergyCouncilStronglyexport-orientedStronglyimport-orientedExportinglocationImportinglocationHydrogenhubsSlightlyexport-orientedSlightlyimport-orientedWORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC15However,low-carbonhydrogendevelopmentcomeswithitsownmajorchallenges.First,itfaceschallengesintermsoftransport,regardlessofthetypeofcarrierused(seemoreonregionaltakesonhydrogentransportinthesectiononRegionalinsights).AccordingtoIRENA,themosteconomicaloptionforlongdistancetransport(>4000km)isviaships.Severaloptionsforseabornetransportarebeingexplored.Hydrogenliquefactionisoneoption;however,itisenergyintensivesinceitrequiresatemperatureof-253°C(comparedto-160°CforLNG).Anotheroptionisconvertingittoammoniaandreconvertingitbacktohydrogenaftertransport(exceptifammoniaistheend-usebeingtradedforapplicationsincombustionenginesoringasturbines).Itisthemostpromising,althoughstillenergyintensiveandcostlybecauseoftheconversion/reconversionandpurificationprocesses.LiquidOrganicHydrogenCarriers(LOHC)arealsoanoptionbeingexplored;however,theprocessisreportedtobecostlyandenergyintensive(forcostcomparison,pleaserefertoFigure5).Formediumdistances(<4000km),newdedicatedhydrogenpipelines,orusingtheexistingnaturalgaspipelineswhichmightberepurposedforpurehydrogentransport(technicalconstraintsapplyintermsofpercentageblendingandmaterialcompatibilityoftheexistingnetworkwithhydrogen)arethemostcost-eectivewaytotransporthighvolumesfromsupplyclusterstothedemandclusters.Figure2highlightsthecosteciencyofseveraltransportoptions.Finally,forshortdistanceandlowvolumes(localtransportation),hydrogencanbedistributedcompressedorliquefiedbytrucksinstoragetanks(i.e.,distributiontoHydrogenRefuellingStations(HRS)).Tobridgethegapuntillow-carbonhydrogentransportcostsreduce,whichislikelywithanincreaseoftradedvolumesandtechnologyimprovements,somecountriesareprioritisingthecreationofhydrogenvalleysorhubs,wheresupplyanddemandarelocatedinthesameregionalcluster.Thesehubsaremostlylocatednearconcentratedindustrialactivities,ornearportswhichcanbecomemajorimport/exporthubs.Atthesametime,internationaltradeoftechnologiesneededtoproducelow-carbonhydrogen,inparticularofelectrolysersandthematerialsusedtomanufacturethem(i.e.,steel,nickel,platinum,iridium,etc.),isincreasing,andshouldbegivenmoreattentiongoingforward,especiallyinapostcovidcrisisworldwherelocalisationofproductionoftechnologiescomesbackattheforefrontoftheagenda.Onanothernote,mostelectrolysersarestillbeingmanufacturedinworkprocessesthatinvolvelittletonoautomationduetothecurrentlowlevelofmarketdemand,whichispreventingmanufacturersfrommakingthenecessaryinvestmentstostreamlinetheproductionprocess.Thisisaddingtothecostandtimeneededtodeployelectrolysersatscale(Mayyas,Ruth,Pivovar,Bender,&Wipke,2018).Finally,thedevelopmentofpolicysupportforlow-carbonhydrogen,atthisnascentstage,isstilldisparateanduncoordinated.Thelimitednumberofstructuredinitiativesregionallyandglobally,thepluralityoftoolsandexperimentalpoliciesdevelopedtosupporthydrogen–andlackofsucientimplementationtimetogetfeedback–,combinedwiththedivergingregulationsandstandards,cancreatecomplexityandobstaclesforglobaltrade(e.g.,dierencesinlow-carbonorrenewablehydrogenqualificationsandeligibilityforsupportinstruments).Moreobstaclesareidentifiedinthesafetyspace(e.g.,standardsmissingfornewapplications)andinhumancapital(e.g.,skillsavailability),whichneedtobetackledmoreproactively,especiallyifpotentialsolutionscangiverisetonewandmorebusinessopportunities,whichwouldmakethehydrogenagendamoreattractivethanchallenging.Tofacethesechallenges,cooperationiscrucialbetweenallactorsinvolvedinthesupplychain.Increasedcooperationiscalleduponanddrivenbymanyactors,andcollectiveenablersareemergingtoreducebarrierstoglobaltrade(seeinthesectiononEnablersforlow-carbonhydrogenmarketramp-up).Figure2.CosteciencyoftransportoptionswhenconsideringvolumeanddistanceThecostoflow-carbonhydrogenisoneofthemostdecisivefactorsinfluencingitscompetitivenessandthusincreaseduse.Inaddition,thecostsofthedierentprocessesforhydrogenproductiondier,thereforeinfluencingwhichproductionmethodischosenandhowmuchCO2isemitted.Currently,producinghydrogenviaSMRwithCCUSisoftenalow-costoption,mainlydrivenbythecomparativelylow-costpricesofnaturalgasoverthelastdecade.However,inregionsoftheworldthatarecurrentlyimportingnaturalgasandhaveveryfavourableconditionsofrenewableelectricity,producinghydrogenviaelectrolysiswithrenewableelectricitycanalreadybecompetitivetoday.Inthefuture,thepriceofnaturalgasisexpectedtorise,makingitincreasinglyexpensivetoproducehydrogenusingSMRwithCCUS.ThecostLOWCARBONHYDROGENPRICEDEVELOPMENTSSource:IRENA,2022ERR能研微讯微信公众号：Energy-report欢迎申请加入ERR能研微讯开发的能源研究微信群，请提供单位姓名（或学校姓名），申请添加智库掌门人（下面二维码）微信，智库掌门人会进行进群审核，已在能源研究群的人员请勿申请；群组禁止不通过智库掌门人拉人进群。ERR能研微讯聚焦世界能源行业热点资讯，发布最新能源研究报告，提供能源行业咨询。本订阅号原创内容包含能源行业最新动态、趋势、深度调查、科技发现等内容，同时为读者带来国内外高端能源报告主要内容的提炼、摘要、翻译、编辑和综述，内容版权遵循CreativeCommons协议。知识星球提供能源行业最新资讯、政策、前沿分析、报告（日均更新15条+，十年plus能源行业分析师主理）提供能源投资研究报告（日均更新8~12篇，覆盖数十家券商研究所）二维码矩阵资报告号：ERR能研微讯订阅号二维码（左）丨行业咨询、情报、专家合作：ERR能研君（右)视频、图表号、研究成果：能研智库订阅号二维码（左）丨ERR能研微讯头条号、西瓜视频（右)能研智库视频号（左）丨能研智库抖音号（右)WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP16Figure3.Projectedcostby2050oflow-carbonhydrogenfromrenewableelectricitySource:WorldEnergyCouncilThefigure3ofprojectedcostforlow-carbonhydrogenfromrenewableelectricityisbasedonaforecastofrenewableelectricitypricedevelopment(Fasihi&Breyer,2020),combinedwithaPwCdatatoolwhichincludesCAPEXandOPEXcostsofelectrolysers.Themethodologyalsoconsideredthescalelearningeectsofelectrolyserstechnologies.3scenariosareused,eachconsideringdierentpricesofrenewableelectricity:Lowcost:34USD/MWhin2020,decreasingto11USD/MWhin2050;Mediumcost:40-45USD/MWhin2020,decreasingto17USD/MWhin2050;Highcost:50-62USD/MWhin2020,decreasingto23-45USD/MWhin2050.METHODOLOGYFigure4.Projectedcostby2050oflow-carbonhydrogenfromnaturalgaswithCCUSSource:WorldEnergyCouncilThefigure4ofprojectedcostforlow-carbonhydrogenfromfossilfuelswithCCUSisbasedon4casestudiesdevelopedbyEPRIandWood.ThecasestudiesexploretwomaintypesofSMRprocesses:SMRwithpost-combustionCO2capture,andSMRwithadvancedtechnologyconfiguration,whileachievinginbothprocessesa90%ofCO2capture.Thehydrogenproductioncapacitiesthatwereexplored(50,000kg/dayand300,000kg/day)areshowcasedwiththe2-linesforeachgaspricerange.Moreover,3naturalgaspricedevelopmentscenarioswereused(nottiedtoanyparticularregion,acknowledgingsub-regionaldisparities):Lowcost:17USD/MWhin2020,increasingto34USD/MWhin2050;Mediumcost:34USD/MWhin2020,increasingto68USD/MWhin2050;Highcost:45USD/MWhin2020,increasingto90USD/MWhin2050METHODOLOGYoflow-carbonhydrogenfromrenewableelectricity,ontheotherhand,shoulddecrease,asboththepricesforrenewableelectricityandtheelectrolysistechnologieswillcontinuetofall,duenotablytotherealisationofeconomiesofscale,technologicaldevelopmentsandlearningeects.Underthisrespect,however,wemustalsoconsiderthatthegrowingshareofintermittentrenewablesourcesinthepowerproductionmixwillmostlikelyincreasenetworkfeesandbalancingcosts,reducingthescopeofcostdecreaseforgrid-connectedelectrolysers.Insomecountries,governmentalactionissupportingthistrendbydevelopingfinancialincentives,implementingquotas,andothereconomicsupporttoolsfocusedonrenewablehydrogenonly.Tomanagethescaleupofsupply,renewablehydrogenprojectsshouldgohand-in-handwiththedevelopmentofsignificantrenewableenergycapacitiesabletooperatetheelectrolysers.Thecontinuousdecreaseinrenewablehydrogencost(Figure3)willleadtoasituationwherein2050itwillbecheapertoproducelow-carbonhydrogenusingSMRwithCCUSonlyinfewregionswithcontinuedlowgasprices,lowavailabilityofrenewableelectricityandgoodaccesstoCO2storagesites.Inmostoftheotherregionsaroundtheworld,theproductionoflow-carbonhydrogenusingrenewableelectricityisestimatedtobecomethemostcost-eective.WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC17Figure5.ProductionCost(USD/kg)pertechnologyforselectcountries(by2030and2050)Source:WorldEnergyCouncilBasedonthedatafromtheWECEuropestudyonhydrogenimports(WordEnergyCouncil-Europe,2021).Excludestransportationcosts.Allcalculationsarebasedonaverageinvestmentcosts(~400USD/kWin2050)andnotthecheapestavailable(160USD/kW)toreflecttheaveragecostofproduction.GaspriceswererevisedandestimatedasarangebyPwCandtheWorldEnergyCouncilforbothEuropeanandNorthAfricancountriesduetoit’svolatility.Formoreinformationonassumptions,pleaserefertoWECEuropestudyonhydrogenimports(WordEnergyCouncil-Europe,2021).METHODOLOGYWhilelow-carbonhydrogenproductioncostsaresettodecreaseratherrapidly,makingthecommodityanditsderivativesincreasinglycompetitivecomparedtoalternativefuels,themarketprice–ultimatelypaidbyconsumers–remainsasignificantbarriertolow-carbonhydrogenuptake.AccordingtotheNationalRenewableEnergyLaboratory(NREL),theaverageretailpriceofhydrogeninthetransportationsectorwasaround16.51USD/kgbetweenQ42018andQ32019intheUSA.Inordertoreachparitywithgasoline,1kgofhydrogenshouldsellfor2.5timesagallonofgasoline–hencetomatcha3.20USD/gallonretailprice,hydrogenshouldsellat8USD/kg(Baronas,2019).Thehydrogendebateshouldshiftfromproductioncostacrossthevarioustechnologiestothefinalpriceforend-usersinordertoincludetheadditionalcostssuchastransportandstoragecosts,aswellastheprofitmargin.Low-carbonhydrogen’stransportcostsareparticularlychallengingtoestimate,astheyincludemanycomponents,andshouldacknowledgetransportinfrastructuredevelopmentinthisearlyphaseofthetradedevelopment.Aslong-distancetransportoflow-carbonhydrogenisneededinthefuturetosupplythemaindemandcentres,moreemphasisshouldbeputonbetterassessingtransportcostsacrossdierentmethodsanddistances.Astechnologiesdevelopinthisarea,allpossiblesolutionsremainexploredtosuiteachcountry’sparticularcontext.WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP18Figure6.ComparisonofhydrogentransportoptionsovervariousdistancesSource:WorldEnergyCouncil,basedondatafromtheWorldEnergyCouncil-Europe,2021Besidesthecostprojection,thestabilityofsupplyandvolumeavailabilityoflow-carbonhydrogencanaecttheretailpricesignificantly.Forinstance,intermittencyintheproductionofrenewableenergybecauseofweatherfluctuationscandirectlyimpactthesupplyoflow-carbonhydrogentoend-users,andthereforeincreasevolatilityaroundtheretailprice,ifhydrogenstorageisnotavailable.Asimilarcaseontheuncertaintyofsupplycanbemadeforlow-carbonhydrogenderivedfromfossil-fuelswithCCUSsinceadisruptioninthesupplyofnaturalgas,oramajorfluctuationinitsprice,canalsocausemajoruncertaintiesonthestabilityofsupplyoflow-carbonhydrogen.WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC19REGIONALINSIGHTSLocalinterestinlow-carbonhydrogenuptakeiscontinuingtogrowaroundtheworld.Asof09/03/2022,21countriesandtheEuropeanUnionhavereleasedanationalhydrogenstrategy,27haveanationalstrategyinpreparation,andinitialpolicydiscussionsandpilotprojectsareseeninatleast34additionalcountries.Inthelastyear,themostpublicsupportforlow-carbonhydrogendevelopmentcontinuestobeseeninEurope,howeverthemomentumisalsogrowinginLatinAmericaandtheCaribbean,AfricaandtheMiddleEastandGulfStates,whereadditionalcountriesaredevelopingplansforlow-carbonhydrogenuptake.Potentialkeylow-carbonhydrogenplayersintermsofvolumes,suchasChina,India,RussianFederation,andtheUnitedStatesofAmericaareplanningtoreleasetheirnationalhydrogenstrategiesshortly.Figure7.OverviewmapofthecountriesactivitiestowardsdevelopingahydrogenstrategyFigure8.WorldEnergyIssuesMonitor2022-GlobalmapwithHydrogenStateofplay,asof09/03/2022NationalhydrogenstrategyavailableNationalhydrogenstrategyinpreparationInitialpolicydiscussionsandpilotsprojectsSource:WorldEnergyCouncilSource:WorldEnergyCouncilCONTEXTUrbanDesignSupportMechanismsRegionalIntegraƟonQualityEnergyAccessNuclearMarketDesignandRegulaƟonsLandandWaterAvailabilityInvestorEnvironmentInnovaƟveTransportGeopoliƟcsEnergyEĸciencyElectricStorageInnovaƟonDigitalisaƟonDemographicPaƩernsDemandPullAīordabilityRenewableEnergiesHydrogenFutureofWorkEconomicGrowthDecentralisedSystemsCyberSecurityRisksCrossBorderTradeCommodityPricesClimateChangeManagementtKZ>EZ'z/^^h^DKE/dKZͮϮϬϮϮ-------Centre-pointlineGlobalCriƟcalUncertainƟes:whatkeepsenergyleadersawakeatnightAcƟonPrioriƟes:whatkeepsenergyleadersbusyatworkInvestorEnvironmentCyberSecurityRisksSupportMechanismsInnovativeTransportElectricStorageInnovationAordabilityRegionalIntegrationFutureofWorkCrossBorderTradeDecentralisedSystemsUrbanDesignLandandWaterAvailabilityDemandPullNuclearWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP20HydrogenpositioningintheWorldEnergyIssuesMonitor2hasevolveddramaticallyinthelast4years.Expertsacrossalltheregionsconsiderthatthetopicisincreasinglycriticalandimpactfulforenergysystemsandenergytransitions.Uncertaintyaroundhydrogenisparticularlyhigh:1stuncertaintyoutofthe25issuesforNorthAmerica,3rduncertaintyinEurope,4thuncertaintyintheMiddleEastandGulfStates,and5thinAsia.However,hydrogenisstilloverallperceivedwithlimitedimpactin2022,whichpreventstheissuefrombeingseenasacriticaluncertaintyinallregionsbutAsia,andasanactionpriorityinallregions.Thehighlevelofuncertaintystillplaceshydrogenhighonleaders’issuestotrack.Figure9.RegionaltrackingofHydrogenintheWorldEnergyIssuesMonitorbetween2018and2021Source:WorldEnergyCouncil2TheWorldEnergyIssuesMonitortracksenergyleaders’perspectivesontheissuesaectingthesector.Byaskingpolicymakers,CEOsandleadingindustryexpertstoassessthelevelofimpactanduncertaintytheyattributetopreidentifiedenergytransitionissues,theMonitorprovidesauniqueoverviewofa)theActionPrioritiesorareaswherecountriesareactingpragmaticallytoprogressintheirenergytransition;andb)theCriticalUncertaintiesorissuesthatareintheenergyleaders’radarasareasofconcern,andhowthesehaveevolvedovertime.EŽƌƚŚŵĞƌŝĐĂϮϬϮϭƵƌŽƉĞϮϬϮϭtKZ>EZ'z/^^h^DKE/dKZϮϬϮϮ----Centre-pointline2018ƌŝƟĐĂůhŶĐĞƌƚĂŝŶƟĞƐ͗ǁŚĂƚŬĞĞƉƐĞŶĞƌŐLJůĞĂĚĞƌƐĂǁĂŬĞĂƚŶŝŐŚƚĐƟŽŶWƌŝŽƌŝƟĞƐ͗ǁŚĂƚŬĞĞƉƐĞŶĞƌŐLJůĞĂĚĞƌƐďƵƐLJĂƚǁŽƌŬ201820182018201820182018TrĂĐŬŝŶŐ,LJĚƌŽŐĞŶϮ018-2021ƐŝĂϮϬϮϭ'ůŽďĂůϮϬϮϭDŝĚĚůĞĂƐƚĂŶĚ'ƵůĨ^ƚĂƚĞƐϮϬϮϭ>ĂƚŝŶŵĞƌŝĐĂĂŶĚƚŚĞĂƌŝďďĞĂŶϮϬϮϭĨƌŝĐĂϮϬϮϭ2018WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC21AFRICALOWCARBONHYDROGENDEMANDPERSPECTIVESHydrogendevelopmentshowsgreatpotentialforAfricancountriesinthelongterm.Variousdomesticend-useshavebeenidentified,particularlyfortheagriculturalsector,thedevelopmentofenergyaccess,andtostrengthenthereliabilityandresilienceoftheelectricitysystem.Intermsofagriculture,locallyproducedlow-carbonhydrogencouldplayanimportantroleinincreasingtheuseofnitrogenousfertilisers,andinturnimprovefoodsecurity.EarlymoverMoroccocouldnotablyhelpfurthersupplylow-carbonhydrogenandammoniaforfertiliserstoSub-Saharancountries,aslow-carbonhydrogenwouldhelptolocaliseammoniaproductionintherespectivecountries,improvinglocaladdedvalueandreducingsupplychainandcarbonfootprint.Lookingatenergyaccess,combinedwithfurtherelectrificationonthecontinent,hydrogencouldbeusedasavectorandactasstandbycapacityandforlong-termstorage,particularlyinremoteareas.SomeAfricancountriescouldalsoexplorethedevelopmentofrenewablehydrogenproductionforelectricitystorageinthefuture;however,theprocessofproducinghydrogenforstoragecurrentlyhasalowround-tripeciencycomparedtootherstoragetechnologies(S&PGlobalMarketIntelligence,2021).Nevertheless,economicchallenges,particularlyforAfrica,currentlymakealternativesolutions(e.g.,battery,pumped-storagehydroelectricity)morecost-ecient.Itcanalsoactaslong-termstoragecapacityforhydropowerenergy,whichfluctuatesbetweenseasonsandacrossdierentyears.Hydrogenalsoshowspotentialintheenergysectortostabilisethegrid,notablyforpeakenergyuseandbackuppowerforthetelecomindustry(radiomasts),andinmanyotherbusinesssectorswithhighenergyconsumptionandhigh-powerreliabilityrequirements(e.g.,hospitals,hotels,supermarkets,shoppingmalls,oces,anddatacentres),whereammoniafuelledfuelcellsystemscouldreplacemostlyimporteddieselgenerators.Moreover,low-carbonhydrogencanincreaserenewableelectricitymarketgrowthpotentialsubstantiallyandbroadenthereachofrenewablesolutions.Inaddition,NorthAfricacurrentlyhasthemostpotentialforpowergenerationusinglow-carbonhydrogenfromfossilswithCCUS,duetoexistinggaspowerplantinfrastructure.Finally,low-carbonhydrogenusecouldsupportthecontinent’spathtonet-zero,notablyinindustry(ironandsteelindustryinSouthAfrica,Egypt,Algeria,Morocco,orMauritania;refineriesinEgypt,Libya,Algeria,NigeriaandSouthAfrica;methanol),andmobility(aspartofamixoftechnologies–fuelcells,electricvehicles,biofuelssectors;inpublictransportsashighlightedbySouthAfrica).Thedevelopmentoflocalproductioncapacitycouldreduceimports(fertilisers,dieselforisolatedareas,energyforheavytransportinmines,etc.)andcontributetostrengtheningtheenergyandeconomicindependenceoftheAfricancountries.Anothereconomicadvantagecouldcomefromexports.NorthAfricaiscurrentlybetterpositionedforexports,mainlylookingattheEuropeanmarket,whilemostotherAfricancountriescanonlyconsiderlow-carbonhydrogenexportinthelongterm.Onthistopic,therearelessonstolearnfrompreviousinitiativesacrosstheMediterranean,liketheMediterraneansolarplanandDesertec,whichfailednotablyduetolackofsomeinstitutional,political,andfinancialdrivers.ItisnecessaryforAfricancountriestodeveloplocallow-carbonhydrogenuses,beforeoratthesametimeasexploringexportopportunities,inordertoincreasevaluecreationdomestically.Exportactivitiesareseenasanopportunitytofosterthedevelopmentofinfrastructuresandothercapacitiesforlocaldemanduptake,butthelackofinfrastructurehindersmostAfricancountries'perspectivesinthecomingdecade.Inaddition,withmineralsbeingcriticaltothedevelopmentoftherenewableenergyinfrastructureandprovidinganimportantdiversificationoptiontoexistingmineralsupplychains,Africawithitsabundantmineralresourcesoersanexcellentoptiontobepartofthevaluechainofenergytransitiontechnologies.Forinstance,SouthAfricaholds90%ofknownplatinumgroupmetals(PGMs)reservesworldwide,whicharecriticalmaterialsusedincertaintypesofelectrolysersaswellasinfuelcells,andwillthereforeplayanimportantroleintheworldwideuptakeofrenewablehydrogen.SUPPLYCHAINSProductionsourcesAfricancountrieshaveoverallatremendouspotentialtoproducelow-carbonhydrogen,withanabundanceofrenewableenergysourcesandveryinterestingcapacityfactors.However,significantcapacitybuildingisrequiredtounlockthispotential,andwaterstressincertainareascanhinderproductioncapability.Mostcountriesarelookingtodeveloprenewablehydrogenproduction,usingsolarandwind(e.g.,Egypt,KenyawiththeTurkanawindfarm,orAngola),hydro(e.g.,inEthiopia,theCongoRiverinDRC)andgeothermal(notablyinEthiopia,Kenyawhichwillsoonhave140MWhcapacityingeothermal,Uganda,Tanzania,andRwanda–howeverlesslikelyduetoitshighcost).NamibiawillsoonbehometooneofthelargestrenewablehydrogenprojectsontheAfricancontinent,withelectricitygeneratedfromsolarandwindpowerplantsintheTsau/KhaebNationalPark.Fromanexportperspective,renewablehydrogenproductioncouldbefavouredtosuittheEuropeanUnionmarket.Inaddition,somecountriescouldexploittheirnaturalgasresources(Algeria,Nigeria,Mozambique,Egypt,Tanzania)toproducelow-carbonhydrogen,whileMaliisopeningthewaytotheextractionandproductionofnaturallyoccurringgeologicalhydrogenfoundinundergrounddeposits(oftenWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP22referredtoas“whitehydrogen”),beingthefirstcountryintheworldtoproduceelectricityfromnaturalhydrogenwithitspilotprojectinBoukarebougou.Intermsofcostcompetitiveness,thecostofrenewablehydrogenisdecreasing(seethesectiononInsightsonhydrogensupplychainsdevelopments)andmovingtowardsaparwithconventionalhydrogeninsomeplaces(SouthAfrica,Namibia,NorthernAfricancountries).Intheshortterm,accesstowatersuitableforelectrolysersmayrequireupstreaminvestmentstodesalinatewaterinpartsofthecontinent,whichmayrequireadditionalinvestmentparticularlyinwater-stressedareasandimprovementofasuitabletechnology.By2050,mostAfricancountriesareexpectedtobeabletoproducelow-carbonhydrogenat1USD/kg,whichwouldthenmakeitacompetitivefuelforlocalconsumptioninAfrica.TransportandStorageAfricafacessignificantchallengesintermsofaccesstoenergy,lackofresilientinfrastructure,andinadequatetechnologicalandskillscapacities.ThelackofinfrastructuretotransportenergyacrossonecountryinvariouspartsofAfricaisoneofthemainbarrierstotherapidadoptionoflow-carbonhydrogen.Thisalsoimpactsthecontinent’scapacityforhydrogenstorage.Thedevelopmentofproductionforexportcouldattractinvestmentsininfrastructuredevelopment(e.g.,pipelines,shipping).Theseinvestmentswouldalsoneedtobenefitthedevelopmentoflow-carbonhydrogenusesdomesticallyinordertoincreasevaluecreationineachcountry.Intheshortandmediumterms,NorthAfricancountriesarebestpositionedtobenefitfromexportactivitiestoEurope,usingtheexistinginfrastructure.Low-carbonhydrogenandderivativessuchasammoniaforfertiliserscouldbefavouredintheshortterm,withMoroccohavingalreadylaiditsambitionforbothproducts.BesidesEurope,shippingroutescouldalsosupportexporttoAsianimportingmarkets.Potentialsynergiescouldbeexploredatthesub-regionallevelwiththedevelopmentofthe5PowerPools,namelytheSouthernAfricanPowerPool(SAPP),EasternAfricaPowerPool(EAPP),CentralAfricanPowerPool(CAPP),WestAfricanPowerPool(WAPP)andNorthAfricanPowerPool(NAPP),thesub-regionalmulti-stakeholderinstitutionsthatcoordinatecross-borderpowertradeandgridinterconnectionamongAfricannations.Lookingattheglobalsupplychaindevelopment,manybilateralpartnershipsareemergingbetweenAfricancountriesandfuturenet-importingcountriesinEuropeandAsia.FewbilateralormultilateralcooperationinitiativeshavebeenflaggedsofarbetweenAfricancountriesonthethemeoftransportandstorageofhydrogen,whichcouldbenefitmorethedevelopmentoflocaluses.ENABLERSFORLOWCARBONHYDROGENRAMPUPAfricamaynotbereadytoproduceandusehydrogenatscale,howeverinthisdecadeinfrastructureandothercapacitiescanbebuiltupandappropriatepoliciesandregulationsdevelopedtopromotelow-carbonhydrogenproductionandconsumption.Inthiscontext,thedevelopmentofpilotprojectswithinnovationandtechnologytransferandsubsidiessupporttotestthebusinessmodelsbeforescalingupiskey.Inaddition,developingregionalcooperationisseenasapriorityintheregion.Therefore,identifyingtherequiredcooperationandcoordinationframeworkswithalltheconcernedpartiesisseenasapriority,andnotablybetweenAfricanuniversitiesandresearchcentrestoteamupinthestudyofhydrogen,andreducedependencyontechnologiesfromoutsidetheregion.IntheAfricancontext,thesub-regionallevelcouldalsoberelevantindevelopingcooperation(Sub-SaharanAfrica,Maghreb,EastAfrica,etc.).ExpertshaveidentifiedpriorityactionsforhydrogenrampupinAfrica.Thesearechallengingstructuraltasks,thatrequiresignificantreforms.Theappropriateorganisationorgroupofstakeholderstoleadtheimplementationoftheseactionsareyettobedetermined.Theseactionsinclude:1-Makinganinventory:identifyingtheroleofhydrogenintheenergytransitionprocessandconductinggapsassessmentofhumancapitaldeficitinAfricaandgapsassessmentofinfrastructurerequirements.2-DevelopingaregionalroadmapsettingouttheAfricancountries’visionforthedevelopmentandscalingupofahydrogeneconomy.Thisroadmapshouldtakea‘whole-systemapproach’todevelopingthehydrogeneconomy,settingouthowgovernmentsandindustriesneedtocoordinateanddeliveractivityacrossthesupplychain,detailingthesupportingpoliciesandtheirtimelineandreviewprocess.3-ReformingtheIndustrialStrategiestosetoutavisionofhowAfricacanturnlow-carbonhydrogenintoaviablesolutiontodecarbonisedierentsectorsovertime.4-Increasinghydrogenliteracywithawareness-raising,education,anddemonstrationinitiatives,todevelopbuy-in.Acrossthecontinent,apriorityareaforinvestmentrelatestoresearchanddevelopmentandtraining,focusingeortsonreducinglow-carbonhydrogencost,notablyitstransportandstorage,butalsolookingatproductiontechnologies,forinstanceexploringalternativematerialsincathodestotakeaccountofavailableinventory(e.g.,nickel).Finally,lookingatexportingopportunities,itiscrucialforhydrogendevelopmentinAfricatobettercapturethevalueassociatedwithexport.Prioritymeasurestoensurethesuccessoftheexport-importmodelcanbeimplementedjointlyinWORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC23institutional,political,andfinancialareas.Africanplayerscallforincentivesfromthegloballevelandimportingmarkets(e.g.,quotas,reductionoftaxesonAfricanhydrogenexports,carbonpricesatbothinternationalandnationallevels),aswellasimporters’investmentplaninAfricanotonlyfocusingonsecurityofsupplybutalsoonbenefittingAfrica(e.g.,programmesfortechnologytransfer,buildingfacilitiestomanufactureelectrolysers,trainingofworkforce,etc.).Inthatcontext,AfricacouldnotablybuildonthestrongtieswithEuropetohelptorealisetheParisAgreementtargetsandtheAfricanUnion’sAgenda2063.Inthisregard,therecommendationsoftheAfrica–EuropeHighLevelPlatformonSustainableEnergyInvestments(Africa–EuropeHigh–LevelPlatformforSustainableEnergyInvestmentsinAfrica,2019)shouldparticularlybeconsidered.ASIAPACIFICLOWCARBONHYDROGENDEMANDPERSPECTIVESTherearestrongdierenceswithintheAsia-Pacificregionastowhataretheshort-termpriorityend-usesforlow-carbonhydrogen.Thelackofclearapplicationprioritiesillustratestheregion’soverallapproachtohydrogen,drivenbySouthKoreaandJapan’svisionsfora“hydrogeneconomy”by2050.Low-carbonhydrogencanfirstsupportthedecarbonisationofexistingindustrialhydrogenapplications,forinstanceregardingammoniaandmethanolproduction,theironandsteelindustryandrefiningapplications,asemphasisedinAustralia,NewZealand,Singapore,China,JapanandIndia.Theswitchfromhydrogenderivedfromfossilfuelstolow-carbonhydrogenintheindustryshowstremendouspotentialintheregion–e.g.,replacinghydrogenfromfossilfuelsinforinstanceChina,whichiscurrentlytheworld’slargesthydrogenuserintherefiningandchemicalindustries.Atthesametime,manycountriesarebroadeningthescopeoflow-carbonhydrogenapplicationsinotherhard-to-abatesectors,suchasthemobilitysector.Singapore,China,SouthKoreaandJapanhaveputanemphasisonhydrogenuseinlightpassengervehicles,busesandtaxis,whileAustraliafocusesonheavy-dutytransport,suchasheavytrucks,miningmachinery,andbuses.Asia-PacificistheregionwheretheFCEVmarketiscurrentlyadvancingthemostrapidly,withSouthKorea,ChinaandJapanbeinginthetop4largestmarketsforFCEVstoday.Intermsoftransport,low-carbonhydrogenuseinthemaritimesectorisapriorityforSingaporeforinstance,andR&DinitiativesareseenintheshippingsectorparticularlyinAustraliaandJapan.Moreover,low-carbonhydrogenuseisbeingexploredtodiversifyenergyfuels.ItsuseisthereforeconsideredforpowergenerationinAustralia,Singapore,Japan,HongKong,andSouthKorea,andblendinginthegasnetworkinAustralia,NewZealand,HongKong,orSingaporeforcitygas.Whileitdoesnotappeartobeanareaoffocusinmostregionsatthisstage,hydrogenuseinbuildingheatingishighontheJapaneseandSouthKoreanagendas,whileAustraliaistestingtheblendingoflow-carbonhydrogeninexistingresidentialgasappliances.Finally,low-carbonhydrogenuptakecouldbenefiteconomicgrowth.Consideringthehugepotentialvolumeofdemandforlow-carbonhydrogeninAsia-Pacific,exportisthepriorityend-useforAustralia’slow-carbonhydrogenproduction,whichcouldsupportcostreductionandinturnincreaseinternaluse,aswellasforNewZealandtoalesserextent.Indiacouldalsoconsiderlow-carbonhydrogenexporttoitsneighbours,aftermeetinginternaldemand.DomesticuseinIndiacouldsupporttheachievementofairqualitytargetsinthemobilityandindustrysectorsandcouldalsosupportthecountry’spopulationgrowthbyservingitsagriculturalneedswithammoniaforfertilisersandinfrastructuredevelopmentswithlow-carbonsteel.Inaddition,Asia-Pacificcountriescouldalsobecomeexportersofhydrogen-relatedtechnologies,withfuelcelltechnologymanufacturingtakingplaceincountrieslikeSouthKorea,China,andJapan.SUPPLYCHAINSProductionsourcesTheAsia-Pacificregionfocuseson“carbon-free”hydrogen(i.e.,low-carbonhydrogen),exploringdierentproductionmethodsandenergysources.India,AustraliaandpartsofSoutheastAsiapossesstremendoussolarresources,whileNewZealandisoneofthewindiestcountriesintheworldandhaslargeonshoreandoshorewindpotential,aswellasgeothermalpotential.Low-carbonhydrogenusedintheAsia-PacificregioncouldalsobederivedfromnaturalgaswithCCUS,andcoalwithCCUS–thelatterbeingcontinuouslyusedbyChinaandAustraliawhoareamongstthefewcountriesintheworldconsideringthistechnologyinthelongterm.Inadditiontodieringtechnologyroutes,viewsdieracrosscountriesregardingtherolethathydrogenproducedfromnon-renewablesourceswithCCUSshouldplayinthemix,andforhowlong.NewZealandisalreadyfocusingonproducingandusingonlyhydrogenfromrenewableenergysources,asnewgasexplorationpermitsarenotbeingissuesinthecountry,outsidetheTaranakiregion.Somecountriesplantorelyonlow-carbonhydrogenfromnaturalgaswithWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP24TransportandStorageTheshapingofthelow-carbonhydrogensupplychainisalreadyunderwayintheAsia-Pacificregion,withJapan,SouthKoreaandAustraliahavingbeenthefirstcountriesworldwidetoreleaseadedicatednationalhydrogenstrategy.JapanandSouthKoreaarealreadyidentifiedasfuturesignificantnet-importersforlow-carbonhydrogen,whileAustraliaandNewZealandhavepositionedthemselvesontheexportingside.ChinaandIndia,withmassiveexpectationsforinternaldemandinthemid-term,combinedwithsignificantavailableenergyresources,couldaimtobecomeself-sucient,iftheappropriateadditionalcapacityisbuilt.Identifiedfuturenet-importersandexportersaredevelopinginter-countrycooperationalongthesupplychaintoremoveobstaclesforo-takersandsecurethefirstvolumesofsupply.ManyMemorandaofUnderstandinghavealreadybeensignedbyfuturehighdemandcountrieswithpartnersintheregion,aswellaswithoutsidecountries,forinstancebetweenJapanandArgentina,SouthKoreaandRussia,orSingaporeandChile.SingaporeisalsoexploringpotentialcooperationwithitsneighboursMalaysiaandIndonesiaforpotentialrenewablehydrogenprojectsthere,forexporttotheSingaporeanmarket.Longdistancetransportoflow-carbonhydrogeniscrucialtothedevelopmentofahydrogeneconomyintheAsia-Pacificregion.Futurenet-importingcountriessuchasJapanandSouthKoreaareattheforefrontoftheexplorationandtestingofvarioushydrogenenergycarriers.Atthisstage,thereisnoconsensusoverthepreferredhydrogencarrier,betweenammonia,liquidhydrogen,methylcyclohexane(MCH),orlow-carbonhydrogenembodiedintofinishedproducts.Ammoniaappearstobeleadingintheshortterm,duetoitscost,theinfrastructurereadinessanddirectcombustioninenergysystems.Forinstance,thepowerindustryinJapanisplanningtostartthecommercialuseoffuelammoniabymixcombustionincoalpowerplantsin2027.However,allpotentialcarriersarebeingconsideredasrelatedinfrastructure,transportandstoragetechnologies,andpricesevolveovertime.Withineachcountry,varioustransportmethodsarebeingexploredtoaccommodatetheirgeographicalspecificitiesandend-uses.NewZealandistransportingitscurrenthydrogenproductionviatruckswithliquidtankersortubetrailersandisalsoexploringtransportinthecountryviablendingfrom2030onwardsandviadedicatedpipelines.BlendingisalsoconsideredbyIndia,whichisdevelopingitsgasgridinfrastructure.SouthKoreahasaprojecttobuildAsia’slargesthydrogenliquefactionplantosupplyitstransportsectorwithlow-carbonhydrogen.Meanwhile,ChinaisfacingchallengestotransportinghydrogeninternallybetweenproductionplantslocatedinWestChinaanddemandcentresinEasternChina,notablyduetoaconstrainedandcongestedelectricitygrid.CCUS,alongsidehydrogenfromrenewablesourcesduringtherampupperiod,suchasSingaporewhichplanstoswitchtorenewablehydrogenonlyinthefuture,andSouthKoreawhichhassetatargetofusing70%ofrenewablehydrogenby2040.Onthecontrary,JapantreatshydrogenfromrenewablesandfromnaturalgaswithCCUSequally,preferringtoreferto“carbon-free”hydrogen,andChinaplanstouseallresourcesavailableinitsterritorytoproducehydrogen(i.e.,renewableenergy,naturalgasandcoalwithCCUS).Inthatcontext,thedilemmabetweensupportinglow-carbonhydrogenoritsderivativeammoniaintheinfrastructurerampupphasehasbeenparticularlyhighlightedintheAsia-Pacificregion.Whilesomeexpertsarguethatbothsupplychainscandevelopinparallel,othersconsiderthatonlyonecanreasonablybeexploredforthescaleupphaseduetothemassiveinvestmentsrequired.Someconsiderthatammoniashouldbeafirststep,duetoitsexistingsupplychainanditspropertiesmakingiteasiertotransport,whileothersconsiderthatlow-carbonhydrogencanbeproducedinbiggervolumesintheshorttime.Similartootherregions,costreductionoflow-carbonhydrogenanditsderivatesisthepriority.Asia-PacificcountriesareputtinganemphasisonreducingthecostoftransportandCCUStechnologies,notablyviadevelopingfinancialsupportmechanismsandR&Deortstodevelopnewtechnologies.Shiftingtheconversationfromproductioncosttofinalpriceforend-usersisparticularlycrucialinAsia-Pacific,wherethebiggestfuturedemandcentresareatasignificantdistancefromhydrogenproductionplaces.Projectedfuturenet-importerJapanisexpectedtobeprocuring300,000tonsoflow-carbonhydrogenannuallyatthepriceof~USD2.89/kg3from2030,andSouthKoreaistargetingalow-carbonhydrogensupplyin2040of5.26milliontons/yearatthepriceof~USD2.49/kg.3Exchangeratesapplied:1JPY=0.0086USD;1KRW=0.00083USD.WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC25Figure10.HydrogensupplychainSource:WorldEnergyCouncilENABLERSFORLOWCARBONHYDROGENRAMPUPLOWCARBONHYDROGENDEMANDPERSPECTIVESTheAsia-Pacificregionwithitsfuturebigdemandcentresisattheforefrontofthedevelopmentofagloballow-carbonhydrogenmarket,alongsideEurope.Consequently,theregionisoneofthemostactiveintermsofbuildingcross-countriescooperationtoprogressthehydrogensupplychain,withintheregionandworldwide.Thiscooperationisseenbilaterally,notablyviathedevelopmentofbilateralpartnershipsandsigningofMoUs,butalsomultilaterally,takingaleadingroleinassociationssuchastheCleanFuelAmmoniaAssociationorinintergovernmentalinitiativesliketheHydrogenEnergyMinisterialMeeting.Multilateralcooperationcouldbefurtherenhancedintheregion.Manyexpertsintheregioncallfortheestablishmentofastandardfortradablelow-carbonhydrogenandcarbonfootprintcertificationandjointworkonpolicyprovisionsonmaritimelegislation,atthegloballevelifpossible,orregionallevelinthemeantime.Intermsofenergypolicy,theAsia-Pacificregioncouldbeparticularlyinnovativeinapplyinganintegratedapproachtoitsenergysystems,lookingatvaryingdecarbonisingtechnologies,energystorageoptions,infrastructurerequirements,andcountrycontext(e.g.,currentenergymixandresources)whenconsideringhydrogen’spositioningcomparedtoalternatives.Thisapproachcanresultintacklingallaspectsofenergysystemsatonce.Moreprioritisationinareasofhydrogenapplications,productionsmethodsandtransportandstoragetechniquescouldbeconsideredintherampupphase.Finally,twospecificareasforactionprioritiesintheregionrelatetosupportinghydrogen-relatedtechnologydevelopment;andfacilitatingthedevelopmentofthesupplychainforhydrogenuseinthemobilitysector,viadirectinvestment,incentives,andsubsidies,or(de)regulation.Atthisstage,littlecross-countriescooperationhasbeenidentifiedonthosetwostrategicprioritiesfortheregion,whichcouldbeareastodevelopcompetitiveadvantages.Europeistakingtheleadinthehydrogenruntoday,withahugeinvestmentplanandcommitmenttotheGreenRevolutionusinglow-carbonhydrogen.DemandintheEuropeanUnionisestimatedat60milliontonnesby2050,ofwhich30milliontonnesmayhavetocomefromimports(WordEnergyCouncil-Europe,2021).TostayontrackwiththegoalsoftheParisAgreement,anincreasedpenetrationoflow-carbonhydrogenintheEuropeanenergymixrequiresthatinfrastructureandprojectdevelopmentsaccelerateinordertounlockthesignificantgrowthpotentialforlow-carbonhydrogenthatisEUROPEWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP26emergingtoday.Forthistobesuccessful,hydrogenwouldfirsthavetobeproducedlocallyaslargequantitiescannotbeimportedyetduetoalackofinfrastructure.InEurope,low-carbonhydrogenuseispredictedtoincreaseinareaswheretherearelimitedalternativesforcarbonabatement.Industry,includingthechemicalindustry,willbeafirstmovertodecarboniseitsprocesseswithlow-carbonhydrogen.Inthemobilitysector,theuseofhydrogenislikelytoplayasignificantroleintheheavy-dutytransport,aswellasintheaviationandshippingsectorinthelongerterm,especiallyafterfurtherprocessingintohydrogen-basedfuels.Inthelongrun,hydrogenmightalsobeusedasstorageofrenewableelectricityinordertorunhydrogen-firedgasplantsasback-upforintermittentrenewableelectricitygeneration.Internationaltradeandimportoflow-carbonhydrogenwillbecriticalforEurope,duetoitslackoffossilfuelresources,itscurrentneedtodiversifyfromagasdependence,andasthecapacityofrenewableenergyinthecontinentislikelytobeinsucienttoproducehydrogenatthescalerequired.Therefore,theEUisactivelyengagingwithpotentialregionalexporters,notablythroughfinancinggrantsandloans,technologytransferandorsharing,humancapacitybuilding,enablingmarketsforincreasedrenewablesfocus.Onanothernote,abalanceshouldbefoundbetweenimportinglow-carbonhydrogentotheEuropeanmarketandensuringthatexportingcountriesretainsucientquantitiestobenefittheirowndecarbonisationeorts,whichEuropegloballyadvocates.Opinionsdivergeregardingtheroleofhydrogenblendingwithnaturalgasintheearlyphaseoflow-carbonhydrogenuptake.Whileblendingcanbeanintermediatesolutiontohelpdecarbonisethenaturalgasend-useapplicationswhicharelackingcurrentsuitablealternatives,otherexpertsarguethatitcandivertcurrentlylimitedlow-carbonhydrogenvolumesfromdirectend-users.Thishighlightstheissueofmatchingsupplyanddemand,asEuropeanindustries’decarbonisationambitionscanbehinderedbythecurrentlackofsucientquantitiesoflow-carbonenergysolutions.SUPPLYCHAINSProductionsourcesTransportandStorageTheEuropeanregionoverallstronglyfavourshydrogenfromrenewableenergies.However,moreproductionsourcesincreasinglyappearnecessaryinthefuture,especiallyinthescaling-upperiod(e.g.,fromnuclear,fossil-basedwithCCUSorbymethanepyrolysis).SomeEuropeancountriesarelookingatexportinglow-carbonhydrogentotheirneighbours,suchashydrogenfromnaturalgaswithCCUSorlocallywithmethanepyrolysisfromNorwayorRussia,hydrogenfromnuclearfromFrance,orrenewablehydrogenfromPortugalandtheNetherlands–withportssuchasthePortofRotterdamactingasahubtoconnectoutsideexporterstoEuropeanimporters.However,importvolumeswilllikelyremainrelativelylimiteduntil2030,whileinfrastructuregetsbuiltandlow-carbonhydrogenpricesdecrease.Lookingtowards2035,2040or2050,whenmoreintegratedinfrastructureisexpectedtobeinoperation,Europeancountriesrichinrenewableresources,suchasGreece,Iceland,Italy,Norway,Russia,SpainandTurkey,couldprovidelowercostlow-carbonhydrogenfortheregion.Dependingonoshorewindtechnologydevelopments,morecountriescouldalsoproduceaportionoftheirdirectuse.Forthismainlylow-carbonhydrogenimportingregion,itisparticularlycrucialinthecurrenteconomicsdebatetoconsiderandbetterassessadditionalcostsinthefinalprice,whichareaddedtotheproductioncost,forinstancetransportcost,includingitscarbonfootprint,aswellastakingintoaccounttheexpectedprofitmargin,etc.Moreanalysisoftransportcostsacrossoptionsisparticularlyneeded,lookingnotablyatmaritimeoptions–lookingatdierenttechnologies’cost,readiness,realisticramp-uptimeconsideringthenumberofshipsneeded,portinfrastructure,etc.,andpipelineoptions–usingexistinggasinfrastructurewithblendingorfullydedicatedtohydrogentransportforinstance.ThreedierentscalesofprojectsseemtobeemerginginEuropetomeettheregion’sgrowingdemandintheshortandlongterm.First,on-siteprojectsarerisinginEuropetoanswertheincreasingdemandinhard-to-abatesectors.Hydrogenhubslinkproductionprojectstocloselylocatedusers(e.g.,industrialhubs)oralreadyincludeadedicateddemandplayerdirectlyintheproductionplan.Europehostsmostoftheexistingorplannedhydrogenhubstoday(e.g.,Europe’sHydrogenHub:H2PropositionZuid-Holland/Rotterdamaimingfor3180tonnes/daylow-carbonhydrogenproduction;HyNetWorthWestintheUnitedKingdom,aimingtoproduce1600tonnes/day).Producinglow-carbonhydrogenwherethedemandis,helpstolimittransportandstoragecosts,thusallowingtheseprojectstoreachmorecompetitivedeliveredhydrogenprices.However,thisleadstoanincreasingdemandforelectricityinfrastructure.Secondly,Europeandemandcanbesuppliedwitho-siteelectrolysersinregionswithhighrenewableenergycapacities,whichcanproducelow-carbonhydrogenandtransportitwithinacountryforinstanceviapipelinestoindustries(e.g.,electrolysersontheNorthcoastofGermanyproducinghydrogenthatwillbeusedinotherpartsofGermany).Finally,tosupplyEuropewithhydrogenfromabroad,itisessentialtodeveloptheimportinfrastructuretotransporthydrogenfromregionswithmorefavourableproductionconditions.Sincelarge-scaleWORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC27infrastructureimplementationsuchaspipelinesandterminalstakeseveralyearstoadecadetomaterialise,constructionneedstostartassoonaspossible,inparalleltotheexpansionofrenewableandelectrolysercapacities.TheEuropeanHydrogenBackbonevisioncallsforbuildingandrepurposing11,600kmsofnewandexistingpipelinesby2030,and39,700kmsby2040.Similarprojectsaimtoensurethatproductionlocationsanddemandcentresareinterconnected.OneofthebiggestunknownorgapinEurope’slow-carbonhydrogensupplychain’sdevelopmentisitsstorage.Europeholdsinitsterritoriesvarioussaltcavernsthatcouldforinstancebeusedforhydrogenstorage,asseeninFrance,Germany,ortheNetherlandsforexample.Somecountries(e.g.,Sweden,Switzerland)arealsoexploringtheoptionoflinedrockcavernsaspossiblelong-termstorageforhydrogenandmethane.However,long-termandlarge-volumestoragesolutionsandinfrastructuresforhydrogenarelacking.Moreover,intheeortstoreachnet-zeroemissionsby2050,theissueofstorageforlow-carbonhydrogeniscombinedwiththatofcapturingandstoringcarbonemissions.Figure11.CostofimportsfromdierentsourcestotheEUSource:WorldEnergyCouncilThemapisbasedondataavailablein(WordEnergyCouncil-Europe,2021).Thereportcalculatesthecostbreakdownofthedierentlow-carbonhydrogenimportsfromRussia,Chile,andNorthAfrica,towards5EUmemberstates(Austria,France,Germany,Italy,Spain)by2030.Themapcomparesexclusivelythecostofinternationaltransport(excludingthecostoftransmissionanddistribution)fromthe3sources(Chilebyship;Russiabypipeline;NorthAfricabypipeline)tothedierentEUmemberstates.METHODOLOGYENABLERSFORLOWCARBONHYDROGENRAMPUPTheEuropeanregioncountsthemostcountrieswithnationalstrategiesalreadypublishedorinpreparation.Theimplementationphaseisunderway;however,projectownershighlightregulatoryobstacles.Policymakersmustnowcreatesuitableframeworkconditionstoenablethemarketramp-upofhydrogen.IntheEuropeanUnion,misalignmentbetweenthedierentMemberStates’policies,duenotablytoconflictingviewstowardsthevariouslow-carbontechnologies,iscreatingcomplexityforprojectownersandblockageforinvestments.Thehighelectricitypricesarealsoseenasanobstacle,andpoliticiansareexpectedtodevelopmeasurestoreducethembyreducingcharges,taxes,andleviesespeciallyduringtheinitialmarketgrowthphase.AgoodbalancemustbefoundinWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP28additionalityrequirements,betweenregulatedrequirementsforthepurchaseofelectricityforhydrogenproduction,andtheneedtoavoidstranglinganascentindustry.CaremustalsobetakentoensurethattheRenewableEnergyDirective(REDII)requirements,includingadditionalityandtimematchingprinciples,arestillfeasibleandpragmatic.Iftheseprinciplesareinterpretedtoorigidly;thiswouldmaketheramp-upoftherenewablehydrogenmarketintheEUsignificantlymoredicult,moreexpensiveanddelayitbyyearsinallsectors.Tothisend,itisofgreatimportancethatthedelegatedactforREDII,whichisintendedtosetouttherulesfortheproductionofrenewablehydrogen-aswellasotherrenewablefuelsofnon-biologicalorigin(RFNBOs)-fromelectricityviaelectrolysis,andwhichwasannouncedfortheendof2021,ispublishedpromptlyandinapragmaticwaysothatplannedprojectsarenotsloweddownfurther.Carboncontractsfordierencearealsoseenasaparticularlyhelpfultoolinclosingthepricegapbetweenrenewablehydrogenandcurrentlyusedfossilalternatives.ForsectorsthatcanpassontheirCO2coststotheircustomers(e.g.,refineries,automotiveindustry),quotasfortheblendingoflow-carbonproductsarealsoagoodinstrument.Inaddition,inthiscentreofexpectedhighdemandforlow-carbonhydrogen,morefinancialsupportmechanismsshouldtargetdemand-sidemanagement,forinstancewithtaxcredits).Foramainlynetimportingregion,thedevelopmentofinternationaltradeofhydrogenandderivedproducts(e.g.,liquidfuels)isessential.Therefore,apriorityforEuropeisthedevelopmentoftradingregulationsorstandards,certificationschemestosupportdemandplayers,andworkingtowardsmakinglow-carbonhydrogenacommodity,whichrequiresnewinfrastructureinvestments,newotakers,etc.ThisrequiresincreasingcooperationbetweenEuropeancountries,aswellasworldwideandacrossthesupplychain(e.g.,betweenrenewableenergyexpertiseandchemicalexpertise).Inthatcontext,movingtowardsmorecoordinatedhydrogendiplomacyaction,fromarealityofbilateralagreementstoonewheretheEUplansaheadinthenameoftheentireEU-28,couldsupportthescaling-upprocess,notablyintermsofvolumes,andincreasethedevelopmentofprojectsacrosstheEU.LOWCARBONHYDROGENDEMANDPERSPECTIVESLow-carbonhydrogenuptakeinLatinAmericaandtheCaribbeanwillbeseenfirstinthehard-to-abateindustryandmobilitysectors.Low-carbonhydrogenparticularlyshowspotentialtodecarboniseheavydutyandlong-haultransport,notablyforfoodtransport,andthepublictransportsector,notablybuses.Thereisalsohighdemandpotentialforlow-carbonhydrogeninthesteelsector,forexistingbuyersoffossil-basedhydrogeninoilandgasrefineriesandpetrochemicalindustry,andinthecementindustry.Inmining,low-carbonhydrogencouldbedeployedatscaleintheshorttermforthetransportationofheavymineralsandtodecarboniseinputsrequiredfortheminingprocesssuchasammoniumnitrate.Theagriculturesectorisanotherend-useareaofpotentialforlow-carbonhydrogeninLatinAmericaandtheCaribbean,specificallyforthelocalproductionofgreenfertiliser.Ammoniaalreadypresentsapotentiallyimportantmarketintheregionandisprojectedtoremainoneofthelargestconsumersofhydrogeninthelong-term.Brazil,forinstance,currentlyimports80%oftheammoniausedformakingfertiliser.Finally,manycountriesinLatinAmericaandtheCaribbeanaimtoexploretheirpotentialtoexportlow-carbonhydrogenanditsderivativesintheshort(Chile,Brazil,Uruguay),mid-(Colombia),orlongterm(Peru).Varioushydrogenderivativesandlow-carbonproductsarebeingconsidered,notablygoodsinwhichlow-carbonhydrogenissubstitutedintheexistingproductionprocess(foodproducedwithgreenfertilisers,greensteelincars,cements,etc.).LATINAMERICAANDTHECARIBBEANSUPPLYCHAINSProductionsourcesInArgentinaandColombia,theexistingfossilfuelderivedhydrogenindustryconstitutesastrengthpoint,andthereforeproductionoflow-carbonhydrogenusingfossilresourcesandCCUSisconsideredasatransition,atleastintheshortandmediumterms.Similarly,inTrinidadandTobago,thefocusisonthistypeofhydrogenproductionmethodsincematureoilfieldsalreadyexistandcapturedCO2couldbeusedandinjectedforEnhancedOilRecovery(EOR)operations.Thecountryisexploringrenewablehydrogenprojectsaswell,withtheannouncedproject“NewGenhydrogenproject”expectedtoproduce27thousandmetrictonnesperyear.Intermsofcostcompetitiveness,thecostoflow-carbonhydrogenusingfossilresourcesandCCUSwilldependonthepriceofnaturalgasandsequestrationofCO2ineachcountry.WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC29Figure12.Naturalgaspipelinesinfrastructure-LatinAmericaandtheCaribbeanSource:MinistryofMinesandEnergy-Colombia,2021Source:SnamS.p.A.,2018TransportandStorageMostLACcountriesarestillweighingtheiroptionsintermsoftransportmediumsfortheproducedhydrogen.However,amajorconsensusandaclearfavouriteintheshorttermisammoniaasacarrierforcontinentalexports.Anotherformoftransportbeingexploredismethanol,butnothingisfinalyetascountriesstillexplorethemostcost-eectiveoptions,aswellastherequirementsofthefutureprospectiveimporters(mainlyEurope).IntermsofimportsandexportsbetweenLACcountries,theexistingnaturalgasinfrastructurecouldplayamajorroleinthetransportoflow-carbonhydrogenbetweencountries.Althoughthenetworkisirregular,withaconcentrationofpipelinesintheNorth(startingfromVenezuelaandTrinidadandTobago)andtheSouth(startingfromBolivia),whichillustratestheunequaleconomicsituationandenergypoliciesofthedierentcountries,newgaspipelinesarestillunderconstruction.TheLACregionalpolicyisaimedcurrentlyatstrengtheningthecapabilitiesoftheexistingpipelines,whicharriveinArgentinaandBrazilfromBolivia.However,scalinguphydrogentransportwillrequireinparallelascaleupofstorageinfrastructureandportterminals,whichwillrequiresignificantinvestmentsandtime.Large-scalehydrogenvaluechainsinthefuturewillrequireabroadvarietyofstorageoptions.Geologicalstorageisthebestoptionsforlarge-scaleandlong-termstorage,specificallyforcountrieslikeTrinidadandTobago,Argentina,andBrazil(i.e.,storagewithinsaltcaverns,salineaquifiers,depletednaturalgasoroilreservoirs5).Forshort-termandsmall-scalestorage,storinghydrogenasagasorliquidintanks(i.e.,compression/cryogenicsystems)seemsthemostsuitableoption.5StoringCO2inadepletedhydrocarbonfieldshaschallenges.Itnecessitatesapurificationprocessofthehydrogenafterextractionsincetheycontainsourgasesandhydrogensulphide,inadditiontoothercorrosivegases.Mobilityandotherindustrialapplicationsrequirehydrogenwithaminimumof98%purity.4Exchangeratesapplied:1EUR=1.16USD.AsforotherLACcountries,renewablehydrogenisthepriorityproductionmethod.InChile,thenationalstrategyfocusesonlyonhydrogenproducedfromrenewableenergy.Similarly,CostaRica,ParaguayandUruguayareconsideringonlyrenewablehydrogenproductionanddisregardinglow-carbonalternativesduetothecomplicatedinfrastructurerequirementsofCCUS,lackofadequateoilandgasreserves,aswellasthelackofappetiteforhydrogenfromnon-renewableenergysourcesfromprospectiveimportingcountries.Intermsofcostcompetitiveness,renewablehydrogenwillbecompetitiveinproducingcountrieswithexistingincentivesforrenewableenergyfromthegovernment.Althoughthecostestimatesareuncertain,inUruguay,ajointstudywiththePortofRotterdamhashighlightedthatthepriceoflocalhydrogeninUruguaycouldcomedownto~USD1.51/kg4by2030,andthepricedeliveredinRotterdamnear~USD2.9/kg.InColombia,theexpectedcostofrenewablehydrogenvariesbetweenthedierentregionsandthetechnologyused.Table2showcasestheexpectedcostofrenewablehydrogenproductiontowards2050inColombia.Forlow-carbonhydrogenfromfossilfuelswithCCUS,variousfactorsaectthecost,includinganticipatedCOprices,aswellastherisingnaturalgasandcoalprices.Onaverage,theestimatedcostis~USD2.4/kg(assuminga20USD/tCO2price)in2040.Table2.EvolutionofrenewableLCOHinColombia(USD/kgH2)WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP30MIDDLEEASTANDGULFSTATESLOWCARBONHYDROGENDEMANDPERSPECTIVESIntheMiddleEastandtheGulfStates(MEGS)region,severalcountrieshavealreadyannouncedtheirpledgesfornetzerocarbonemissionsby2050(i.e.,KSA,UAE),inwhichlow-carbonhydrogencanplayamajorrole.Inaregioncharacterisedbyvastoilandgasfields,aswellasexcellentcleannaturalresources(sunandwind)andvastacresofland,theMEGSregionisattheepicentreofthelow-carbonhydrogenmomentum.Intermsofdemand,theMEGSregionisclearlyfocusedonexportinghydrogenandammoniatopotentialmarketsinEuropeandAsia,playingamajorroleinhelpingfulfilothercountries’climateobjectives.However,majorplayersthatareshowinginterestindevelopinglow-carbonhydrogenareonlyfocusingonitsexportsandthusoverlookingitspotentialopportunitiesinthelocaldemandmarket.Inordertodeveloptheindustryandscaleitforexports,theregionneedstostartaddressinglow-carbonhydrogendemandfromitslocaldomesticmarkettoday.Initialopportunityforlow-carbonhydrogenpenetrationliesinreplacingfossil-basedhydrogenusedinindustrialoperations(fertilizerproduction,petrochemicalproduction,refineries).Themajorchallengegovernmentsarefacingintheregionismakinglow-carbonhydrogencompetitive.Toovercomethischallenge,countriesareexploringandanalysingdierentpolicystrategiestospurthedemandintheirenergysystems.Asoftoday,themajorlow-carbonhydrogenprojectsarebeingundertakenbyo-takerswillingtomakethefirst-moverrisk.Thelow-carbonhydrogenmarketisbeingshapedbythefinancingforlongtermo-takeagreementsthatprovidesecurityofcontractforthebuyersandsellers,bymatchingsupplyanddemanddirectly(i.e.,theAirProducts-ACWAPower-Neomproject).Itiswidelyagreedwithintheregionthatlongtermo-takeagreementsarecrucialduringinitialmarketdevelopment,beforemovingintomoreflexiblecontractsasthemarketdevelopsandinfrastructureislaidout.Besideslow-carbonhydrogenanditsderivatives,otherby-productsareemergingintheMEGSregion,andarecurrentlybeingexploredandassessedbythemajorplayers.Anexampleisoxygen,whichcanbeusedbythepharmaceuticalindustryfordierentindustrialapplications.Anotherexampleistheextractionofmineralsfromthedesalinationplantbrine,whereanestimated10%ofglobalmagnesiumdemandcanbemetwithrenewablehydrogenprojectsfromwithintheregion.Magnesiumcanbeusedinaluminiumalloyproductionandhydrogenstorage.ENABLERSFORLOWCARBONHYDROGENRAMPUPReinforcingregionalcooperationcouldparticularlybenefithydrogendevelopmentinLatinAmericaandtheCaribbean.Beforecompetitiononexportcanhappenbetweencountries(e.g.,onlow-carbonhydrogenoronproductsusinglow-carbonhydrogenintheproductionprocess,likegreenfertilisers),cooperationisneededtobringmorevisibilitytothecontinent,attractinternationalinvestmentsandestablishitsroleasalow-carbonhydrogenmarket.Withcollaboration,countriesintheregioncanhavemoreaggregatedvalueinthelow-carbonhydrogeneconomicchain,whichishardtodoalone,particularlyforsmallcountries.Cooperationcanhappenespeciallyatthetechnicallevel,buildingontheindividualcountries’strengths(e.g.,betweengreatresourcesinArgentina,potentialforinvestmentsinChile,manypossibleo-takersinArgentinaorColombia,oneofthecheapestelectricitycostsinParaguayandBrazil,etc.)tofullyutiliseeachcountry’sadvantages.Somecommonregulationprioritiesforlow-carbonhydrogendevelopmentatthecountrylevelhavebeenidentifiedintheregion.Firstly,defininghydrogeninenergylawsisapriorityissuetoresolve.Brazilisamendingthelawandincentivesforbiofuels(e.g.,hydrogenproducedfrombiomassrecognisedasabiofuel).Biofuelshavetaxesandarenotsubsidised,howeverthereisaprogrammeinplaceforcompaniesusingbiofueltohavecertainbenefits.Chileisworkingonalawtotreathydrogenasafuel,inordertosendastrongsignaltothemarket,whileColombiaislookingtoimplementforhydrogenalegislationsimilartotheLaw1715of2015whichpromotestheuseanddevelopmentofrenewableenergyinthenationalenergysystemthroughtaxincentives.Secondly,variouscountriesareassessinghydrogenblendinginthegasgrid:notablyArgentinaandColombiawouldneedtoreviewexistinglegislationtoassessfeasibilityandsafetyofusingtheexistingnaturalgaspipelinenetworkforhydrogenblending;andinChile,anewenergyeciencylawrequiringhydrogenblendingingasgrids(upto10%)waspassedinFebruary2021.WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC31SUPPLYCHAINSProductionsourcesTheMiddleEastandGulfStatesregionisexploringbothlow-carbonhydrogenproductionpathways(fromrenewablesandfromfossilswithCCUS).Havingrichoilandgasreserves,alongwithvastexpertiseinthesector,hydrogenusingfossilfuelsconstitutesarationalchoicefortheshortterm.Similarly,excellentsunandwindresources,coupledwithvastlandswithhighsolarinsolationandlong-termrenewableenergytargets,resultingloballycompetitiverenewableenergygenerationcostsandthereforecostcompetitiverenewablehydrogenproduction.BothproductionpathwaysaremajorsupportersoftheregionsCircularCarbonEconomystrategy(anditsassociated4Rs:Reduce,Reuse,Recycle,Remove),withrenewablehydrogenenablingtheReduceaspect,andotherlow-carbonhydrogenwithCCUStechnologyenablingtheRemoveandReuseaspect.Onacountrylevel,SaudiArabiaisdevelopingaUSD6.5billionrenewablehydrogenplant,tobepoweredby4GWsofrenewableenergy,toproduce650tonnesofhydrogenperdaystartingin2026(MEED,2022).Inparallel,2020haswitnessedthefirstpilotshipmentof40tonnesofammoniaderivedfromlow-carbonhydrogenwithCCUSfromSaudiArabiatoJapan,tobeusedinzero-carbonpowergeneration.IntheUAE,thegovernmentistargeting25%ofthegloballow-carbonhydrogenmarketshareby2030.Low-carbonhydrogenprojectsandpilotsareunderwayoverthewholespectrumofproductionoptions:solarPVandrenewablehydrogenproductionfacilities,low-carbonammoniaproductionplants,andmanyotherdomesticprojectsintheaimofestablishingtheUAEasahydrogenhubwithintheregion(EmiratesNewsAgency-WAM,2021).TransportandStorageMostMEGScountriesareenvisioningexportingtheirlow-carbonhydrogentopotentialmarketsinEuropeandAsiainordertofostereconomicgrowth.Bilateralagreementsarebeingannouncedwithothercountries,whichhelpsandacceleratestheshapingofthemarket.Exportinghydrogenanditsderivativesrequirescomplexinfrastructure.Theregioncanusealotoftheexistinginfrastructure(particularlyforlow-carbonhydrogenproducedusingfossilfuelsandCCUS)andcanleverageitsexperienceinrampinguplargeprojectsandexpeditingtheirexecution,albeitwithassociatedhighercosts.Theregionwillleverageitsadvantageandislikelytogodownstreamandproducelow-carbonhydrogenderivativesandexportthemaswelltomaximisethebenefits.Morespecifically,SaudiArabiaandtheUAEhavebothsuccessfullyimplementedpilotprojectsinCCUSwithEnhancedOilRecovery,whichprovidesuccessfulbusinessmodelsforCCUStechnology(i.e.,AlReyadahCCUSprojectinUAE).Moreover,theregion’shistoryofproductionandconsumptionofhydrogenwithintheirpetrochemicalindustry,coupledwithitsstrategicrelationsbasedoncurrentenergygeopolitics,providesittheleveragetobecomeleadingexportersinthehydrogenglobaltrade.Anotherchallengeforexportsistheassociatedtransportcost,andtherelatedsophisticatedinfrastructurerequired.Forexample,liquifiedhydrogenrequiresspecialtankersthatarenotavailableintheregionyet.Accordingly,MEGScountriesareexploringtheexportofnaturalgasandproducinghydrogenonsite,orevenexportingrenewableelectricityandproducingrenewablehydrogenonsite(regionalinterconnectionsacrosstheMediterraneanregionarealreadyunderway).Blendinglow-carbonhydrogeninLNGshipments(~10%)isalsoaviablesolutiontoovercometheneedfornewinfrastructure.However,thisnecessitatesregulatoryactions,likemutuallyrecognisedinternationalGuaranteesofOriginsthatacknowledgesthattheshipmentcontainsacertainpercentageofcleanhydrogenblendanddierentgasspecifications.Forstorage,saltcavernsintheregionarerelativelylow-costoptionsforhydrogenstorage,andarewidelyavailableinKSA,Oman,andtheUAE.Moreover,depletedoilandgasreservescanalsobeusedasstorageoptionsinthefuture.ENABLERSFORLOWCARBONHYDROGENRAMPUPAstheMEGSregionisveryfocusedonexportinglow-carbonhydrogenanditsderivatives,agloballyoratleastregionallyrecognisedGuaranteeofOriginscertificateiscrucialtothesuccessoftheregion’sexportplans.Importingcountries,mainlyinEuropeandAsia,willneedtoknowthecolour,carboncontent,blendlevel(ifany),andqualityofthelow-carbonhydrogenshipmentstheyareo-taking,especiallyiftheyrelatetotheclimateobjectivesthesecountriesaretryingtoaccomplish.Governmentsintheregionshouldgiveguidanceforhydrogenconsumingcompaniesontheparametersoffutureanticipatedinternalcarbonpenalty.Companiesneedtopreparebeforehand,anditishelpfultoinvolvethemearlyintheprocesstoadjustinternaloperationsontimeandavoidmovingintooearly.Regulatorysupportwillbecrucialtoensurealevelplayingfieldforlow-carbonhydrogenopportunities.Severalpoliciesneedtobeconsidered,explored,andwell-craftedtoensureacarefultransitionawayfromhightolow-carbonalternatives.CarbonpricingaswellasasystemofGuaranteesofOriginscertificationsarethemostdiscussedpoliciesatthemoment.However,majoruncertaintiesliewiththelatterastheytakealotoftimetodevelop,especiallyforstandardsthatareonregionalandinternationallevels.Additionally,carbonaccountingconstitutesamajoruncertaintyforhydrogenproducedfromcarbonisedsources,withcomplexitiesrisingfromthescientific,aswellaspoliticalaspectsofaccountingforcarbon.WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP32Overall,theregionneedstolearnfromitsfailings.Alltheupcomingnecessaryactionplansnecessitateregionalandglobalcollaboration,howeverinthepast,majorregionalprojectsfailedtobedelivered(i.e.,Desertec&MediterraneanSolarPlan).Theregionneedstolearnfromthesefailures,whichwerecausedbyalackofaregionalregulatoryscheme.TheDesertecIndustrialInitiativewasanindustrialinitiativelaunchedin2009by12companiesaimingtoexplorethepotentialtoexportsolarenergyfromthedesertareasofNorthernAfricaandtheMiddleEastintotheEuropeanelectricitymarketsviahighvoltagecables.TheinitialprojectwasestimatedatEUR400billionandaimedatproviding15%ofEurope’selectricityneedsbyimportedsolarpower.However,itfailednotablyduetotransportationandcostineciencyproblems.Dicultiesarosein2012whenseveralindustrialpartnerswithdrewfromtheinitiativeduethefast-changingmarketconditionsofthesolarindustryandtheresultingsteepdropincosts.Additionally,somepartneringEuropeancountriesquestionedthebusinessmodeloftheinitiative,particularlywhensouthernEuropeancountrieswerestrugglingtoabsorbtheexcessrenewableenergygeneratedintheirownmarkets.Similarly,NorthAfricancountriesrealisedthatmeetingtheirowndomesticpowerdemandsmademoreeconomicalsensethanexportingtheirenergytoEurope.Desertec3.0,operatingcurrentlyfromDubai,hasbeenreadjustedwithanewconceptandmissiontoacceleratetheenergytransitionintheArabWorldtowardsthesupplyof‘greenelectrons’and‘greenmolecules’acrosstheregionalandglobalenergyvaluechains.CaseStudy:DesertecNORTHAMERICALOWCARBONHYDROGENDEMANDPERSPECTIVESForNorthAmerica,thelow-carbonhydrogendemandsectorsdieracrossdierentcountries.InCanada,technologyreadinessaroundfuelcellsishigh,withmajorfuelcelltechnologyprovidersalreadylocatedacrossthecountry,andcurrentlyexportingtheirtechnologyglobally.Intheshortterm,theprioritytargetisthetransportsector,mainlyheavy-dutytrucksandbuses,aswellastheindustrialsector.IndustrialprocessingapplicationsinCanada(i.e.,refineries,chemicals,fertilisers)arebeingstimulatedbyinternationaldemandfortheseproducts,aswellasbythecarbonpricingandthependinglow-carbonfuelstandard.Thisisdrivinginvestmentbytheprivatesectorintolargescalelow-carbonhydrogenproductionfordecarbonisingtheindustry.Similarly,thetransportsectoriswitnessingagrowingnetworkofhydrogenrefuellingstations,particularlyinVancouverwheretheprovincialgovernmentisprovidingsupportthroughCleanFuelCreditsthatareavailablethroughtheUSD1.5billionCleanFuelFund.IntheUnitedStates,Californiaistheleadingjurisdictionintermsofimplementationofahydrogenecosystemthankstoaclearandconsistentpolicyapproachthatistargetingthetransportsector.TheUSwasleadingtheglobaldeploymentofFuelCellElectricVehicles(FCEVs)upuntil2020,beforebeingovertakenbySouthKorea.MostFCEVsaredeployedinCaliforniawiththesupportofdierentprogramsandincentivestargetingHRSinfrastructureandlow-carbonhydrogenmobilityasawhole(e.g.,incentivesforpublictransitbusesFCEVs,etc.).TheLow-CarbonFuelStandardmechanisminCaliforniaishelpingde-risktheprojectsovertimeanddrivingthebuildoutofhydrogeninfrastructureformobilityapplicationswithinthestate.ElsewhereintheUS,low-carbonhydrogenuptakeopportunitiesareemergingmainlyinthepetrochemicalsector.TheUSisoneofthelargestproducerandconsumerofhydrogen,particularlyintherefiningsectorandinammoniaproduction,thereforedecarbonisingthesetwodemandsectorsisapriority.InMexico,low-carbonhydrogenhasnotpickedupthesamemomentum.Therearestillmanychallengesforthedevelopmentofprojects-mostlyassociatedtothelegaluncertaintiesandlackofclearregulatoryframeworkforthesector.However,thedemandprospectsaresignificantinthecountry,particularlyintheindustrialsector.Unlessfinancialincentivesandregulatoryframeworksareputinplace,marketprospectsforlow-carbonhydrogeninMexicoarescarce.Withtherightpoliciesandincentivesinplace,thecountryhasapotentialtoinstallover670MWofelectrolysisby2030,poweredmostlybysolarenergy.Intermsofdemand,renewablehydrogencanreachcostcompetitivenessfirstintheroadtransportsector,particularlyinpublictransportbusesandfreighttrucks.Moreover,theminingsectorcanalsobenefitfromrenewablehydrogenopportunity,withdemandexpectedtoreach0.5milliontonsperyearby2050(HINICIO,2021).WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC33SUPPLYCHAINSProductionsourcesProductionsourcesforlow-carbonhydrogenintheNorthAmericancontinentarediverseandaremainlylinkedtothedierentavailableenergyresourcesinthedierentregions.Statesorprovincesrichinexistingoilandgasfieldsandassetsarefocusingonlow-carbonhydrogenprojectsusingtheseresourceswithCCUS(i.e.,Alberta,BritishColumbia,andSaskatchewaninCanada),whileotherareasrichinnaturalresourceslikesun,wind,andhydropower,willbeleaningtowardsrenewablehydrogen(i.e.,QuebecinCanada).InCanada,focusisonthe“low-carbonintensity”hydrogen,whichcomprisesproductionfromrenewablesource(hydropower,solar,wind,etc.)andfromnaturalgascoupledwithCCUS.Theproductionpathwaywilldependoneachregion’suniquelocalresourcesandeconomicfactors.IntheUS,asimilarapproachtowardsproductionexists.Regionswithnaturalgasandcoalfieldsarewitnessinglow-carbonhydrogenproductionwithCCUSorviamethanepyrolysis,whereasinotherareas,renewablehydrogenprojectsareemerging.TheUSandCanadaareleadingthehydrogenproductionfromfossilfuelswithCCUStechnology,withmorethan80%ofglobalproductioncapacity(IEA,2021).Severalpoliciesaresupportingthistypeofhydrogenproduction,with“TaxCreditforCarbonSequestration”intheUSrewarding“qualified”carbonoxide–carbonoxidethatwouldhavebeenreleasedintotheatmosphereifnotforthequalifyingequipment.Thetaxcreditrangedependsonwhetherthecarbonoxideissequesteredorreusedforenhancedoilrecovery.InCanada,majorlow-carbonintensityprojectswithCCUShavebeenorarebeingdeveloped,boostedbytheNetZeroAcceleratorinitiative.TransportandStorageWithitsvastresources,Canadaisenvisioningtobecomeapowerhouseinlow-carbonhydrogenproduction,andpotentiallystartexportingby2030.PotentialexportmarketsaremainlyinAsiaandEurope,aswellastheUS.KeychallengesforCanadalieinthedomestictransportofhydrogenwithinitsborders.Asavastcountry,low-carbonhydrogenproducedincertainareasmightnotbeclosetotheconsumptionclustersorportterminals.Therefore,investmentsininfrastructure,includingnewpipelines,iskeytoenablingthetransportofhydrogen.WiththededicatedhydrogenpipelinesintheprovinceofAlberta,coupledwiththeuniquegeologicalstoragesitesthatincludesaltcavernsanddepletednaturalgaswells,Canadacanleverageitsassetsandexperiencetopositionitselfasamajordistributoroflow-carbonhydrogen,locallyandininternationalmarkets.However,majorchallengesrelatedtoregulationsaroundblendingwithnaturalgascanhindertheprogress.SimilarlyintheUS,hydrogentransportation,distribution,andstorageaspectsconstitutethemainchallengesforintegratingitintotheenergysystem.Forlongdistance,theUScanuseandexpandexistingdedicatedhydrogenpipelinenetworks,similartotheoneslocatedintheGulfCoastbetweenTexasandLouisiana.Theregionalreadyhostsavastnetworkofhydrogenpipelines,hydrogenstoragecaverns,andplants.Anotherformoftransportcanbetheexistingdomesticnaturalgaspipelineswhichhavethepotentialtosupportthetransportationofhydrogen,mainlythroughblending.Anotheroptionforlongdistancescanbeliquidtankers.Besidespipelines,hydrogenintheUScanbetransportedforshortdistancesviatruckswithliquidtankersortubetrailers.MexicohasalsogreatpotentialtoexporthydrogentointernationalmarketsbyleveragingitsexcellentrenewableenergyresourcesanditsgeographiclocationwhichgivesitaccesstothePacificaswellastheAtlanticOcean.Besidesmarineshippingtointernationalmarkets,low-carbonhydrogencouldalsobedeliveredbypipelinetotheUS,andparticularlyCalifornia.Figure13.PrimarymeansofhydrogentransportationSource:U.SDepartmentofEnergy,2020WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP34AGLOBALGUARANTEEOFORIGINSSCHEMEWITHSUSTAINABILITYREQUIREMENTSENABLERSFORLOWCARBONHYDROGENRAMPUPInNorthAmerica,CanadaandtheUSarealreadylargeproducersandconsumersofhydrogen,thereforesignificantopportunitiestodecarbonisetheirexistingdemandexistwithlow-carbonhydrogen.Bothcountriesareexploringallwaysoflow-carbonhydrogenproduction-renewablehydrogenandhydrogenderivedfromfossilfuelswithCCUS.Onthepolicyfront,theCanadiangovernmenthaspushedthroughseveralprogramstoincentivisetheimplementationofusecasesaroundlow-carbonhydrogen.TheCleanFuelsFund,NetZeroAccelerator,CleanFuelsStandard,amongmanyothers,areallsupportprogramspromotingthedevelopmentofcleansolutionsthatincludelow-carbonhydrogenprojects.IntheUS,anewtaxcreditwasrecentlyreleasedtosupportrenewablehydrogen,worthuptoUSD3/Kg.Onlyhydrogenwithlifecyclegreenhousegasemissionsoflessthan0.45kgofCO2eqperkgofhydrogenwillbeeligibleforthefullUSD3credit,thereforethelowerthecarboncontentisinthehydrogenproduced,thehigherthetaxcreditreceivedbyproducers.Howevercertainobstaclesareimpedingthismomentum.InCanada,thedevelopmentofstandardsforhydrogeninnaturalgaspipelinesisstillslow.Moreover,thetransportanddistributionofhydrogenfromtheproductionsourcestothefarawaydemandcentresortheexportports,requiresmajorinvestmentsininfrastructure,particularlyforalargecountrylikeCanada.Accordingly,theregionisfocusingonsupportinganddirectinginvestmentstowardsthecreationofhubs,whichwillactascorecentresforbothdemandandsupplyoflow-carbonhydrogen,thereforede-riskingtheprojectsandsupportingtheadjacentlocalcommunities.IntheUS,theDepartmentofEnergy(DoE)hasestablishedtheBipartisanInfrastructureLaw,whichincludes8billionUSDforthecreationofregionalcleanhydrogenhubs,aimingtocreatejobsandexpandtheuseoflow-carbonhydrogenintheeconomy.Tosupportthelow-carbonhydrogenmarketramp-upinthecomingyears,manypolicyenablershavebeenidentifiedbytheenergy+community,attheglobal,regional,andnationallevels(seesummaryinTable4).5enablersappearparticularlycrucialacrosstheboard.Enhancedinternationalcooperationisneeded,particularlyonthedevelopmentofharmonisedstandards,sharingofgoodpracticesandlessonslearnednotablyfromtheleadingcountriesinlow-carbonhydrogendevelopment,aswellastodevelopcross-bordertradeinfrastructureandinfrastructureforhydrogentransportbetweenmoredistantexportersandimporters.Strongandcoordinatedclimateactionwithappropriateinstrumentsisparticularlyfundamentalindrivinglow-carbonhydrogeninterest.Expertsunanimouslycallforthecreationofaharmonisedstandardforlow-carbonhydrogenatthegloballevel,accompaniedbyacertificationsystemtodeliverguaranteesoforiginsandfacilitatethedevelopmentofglobaltradeforhydrogen.Themainmulti-stakeholdersandintergovernmentalbodiesonthetopicofhydrogen,andstandardisationbodiesshouldbeinvolvedintheprocess.ThisstandardwouldneedtoprovideclearGHGcalculationrulesandcarbonintensityassociatedwiththedierenthydrogenproductionmethods,andprovidesustainabilityindicatorsrelatedtothefulllifecycleofhydrogenproduction(e.g.,waterutilisation,landuse,impactonbiodiversity,socialandsocietalimpact,etc.),aswellasbeaccompaniedbyacertificationsystemfortheGuaranteesofOrigin.Whileexpertscallfortheneedofaninternationalstandard,whichcantaketimeandposestheriskofestablishingadeliberatelysimplifiedorlessambitiousframework(i.e.,agreeingonthelowestcommondenominator)(Sailer,Reinholz,Lakeit,&Crone,2022),nationalandregionalinitiativesareemergingtotackletheissuetoday,leadingtothepossibilityofmultiplecompetingstandards.Untilworkprogressesgloballyonthetopic,transparencyandcooperationiscriticalinexistinginitiativestolimitpotentialgapsordivergencesbetweenthestandards.ENABLERSFORLOWCARBONHYDROGENMARKETRAMPUPATTHEGLOBALLEVELWORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC35AGLOBALMONITORINGANDREPORTINGTOOLHUMANISINGENERGYMOBILISINGPUBLICANDPRIVATEFINANCINGProjectsdevelopersandstakeholdersalongthelow-carbonhydrogensupplychainneedmorepubliclyopenandup-to-dateinformationonactuallow-carbonhydrogenproductionanduseinordertofacilitatedecision-makingandriskassessmentrelatedtopotentialsignificantinvestmentsforfutureprojects.Therefore,thecreationofaglobalmonitoringandreportingtoolonprojectsdevelopingwouldusefullytrackprogresstowardslong-termgoals.Thisliveopenplatformcouldpresentexistingandannouncedlow-carbonprojectsandatimelineoftheirexecutionbyshowcasingtheprojectdescriptionanditsstep-by-stepimplementation(e.g.,projecttype–production,transport,demand–,fundingorigin,productionsource,price,COemissionsintheperiod,etc.),updatedregularly.Theopenplatformwouldtargetboththeexperts’communityandgeneralpublic,withauser-friendlyinteractivemapandperformancedashboardstosupportawarenessandliteracyeorts,aswellasrawdataavailablefortheinformedpublic.TheCouncil’sHumanisingEnergyagendaaimstoputpeopleatthecentreoftheenergydialogueandaction.Itenablesashifttoacustomer-centricperspectivewhichisessentialtobetteranticipatenewandshiftingpatternsofdemand,anditdirectsleadershipattentiontoquestionsof‘pace’andsocietalresilience(suchasfullcosts,aordability,justiceagenda).Italsoenablesashifttowardsabroaderstakeholder-centricapproach,wherebytheneedsandexpectationsofthedierentkeystakeholdersinvolvedneedtobebalancedandtakenintoconsideration.HumanisingEnergyiscriticalforlow-carbonhydrogenuptake;thesocialelementsofavalue-addedhydrogeneconomyshouldbefundamentaltonationalhydrogenstrategiesandshouldguidenationalaction.SomepriorityareaswheretheHumanisingEnergyagendacanenablelow-carbonhydrogenuptakelocallyinclude:understandingmoreconcretelytheskillsneededinthelow-carbonhydrogenindustry,thejobperspectives,andassessingworkforceupskillingandjobrequirements;evaluatinglow-carbonhydrogen’splaceinthenationalenergytransitionanditspotentialimpactontheaordabilityofthetransition;deliveringincreasinglytransparentinformationonlow-carbonhydrogenprojectstothegeneralpublic;improvingpublicparticipationinlow-carbonhydrogenprojectsandempoweringtheusers,etc.Low-carbonhydrogenapplicationisarelativelynewtechnology,andthereforeitprovidesalevelplayingfieldforallcountriestodeveloplocalcontentprograms,whileallowinghumancapacitybuildingopportunities.Mobilisingpublicandmostimportantlyprivatefinanceiscrucialtode-riskinvestments,increasethenumberoflow-carbonhydrogenprojects,aswellassupportinfrastructuredevelopment.Investmentsinlow-carbonhydrogenprojectshavebeenincreasingdramaticallyinrecentyears,butachangeofscaleisneeded.Manyactionscanbetakentosupporthydrogenprojectfinancing,forexamplethedevelopmentofdedicatedlinesofcredit,thesharingofbestpracticesinfinancinglow-carbonhydrogen,aswellaslookingatpreviousexperienceindevelopingnewindustries(e.g.,solarindustryandLNGuptake).Financinginstitutionsalsorequirebankablelow-carbonhydrogenprojects.Inadditiontoalltheenablersidentifiedpreviouslyandactionshighlightedineachregion,increasingdialoguebetweenfinancersandengineerscouldhelpbringmoreprojectstofruition.Finally,inthecontextofmobilisingpublicandprivatefinancing,itisimportanttonotethatfinancialsupportincertainregionscanleadtoover-subsidiesincertainpartsoftheworld,whichisdetrimentaltootherproducers/consumersasitblocksthemfromthemarket.Therefore,financialsupportoeredtothisindustryneedstobecoordinatedtoreducetheprobabilityofsuchunintendedconsequences.Similarly,disincentivestoothertypesofenergyshouldalsobecoordinatedtoensurehealthymarketdevelopment.ATTHENATIONALLEVELACROSSTHEBOARD:GLOBALLY,REGIONALLY,NATIONALLYWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP36INCREASINGMULTISTAKEHOLDERCOOPERATIONCooperationisincreasingacrosstheboardtohelpthelow-carbonhydrogenmarketdevelopandbettermatchsupplyanddemand(i.e.,the“chicken-and-eggproblem”).Bilateralcooperationisparticularlyadvanced,withpublic-privateagreementsbeingincreasinglyusedinthelow-carbonhydrogenindustry,whilemoreandmorebilateralpartnershipsaresignedbetweencountries,mainlyaroundthefuturebiggestnet-importers(seeFigure13).Cooperationiskeyandshouldinvolvethetriplehelixacademia-privatesector-government,whileensuringendusers’involvement,includingcitizens.Cooperationisparticularlycalleduponwithineachregiontofacilitatesharingofbest-practicesandlearningsbetweentwoormorecountries,butalsobetweendierentpartsofthefutureglobalsupplychain.Moremulti-stakeholdercooperationandsustainedcoordinationisneededtotackletheglobalobstaclestolow-carbonhydrogenuptake.Figure14.StateofplayofbilateralpartnershipsSource:WorldEnergyCouncilThebilateralpartnershipsareexclusivelygovernment-to-governmentagreementsthatcanencompasstraderelationsaroundhydrogen(import/exportofhydrogenfueland/ortechnologies),aswellasdemonstrationsprojects,cooperationonR&D,andMemorandaofUnderstandings.Basedoninformationavailableon04/03/2022.METHODOLOGYBilateralpartnershipBilateralpartnershipwithplannedtradeTrilateralpartnershipTable3.Overviewofmainenablersforlow-carbonhydrogenuptakeintheshort-termSource:WorldEnergyCouncilSynthesisofthemainenablersattheglobal,regionalandnationallevelsidentifiedbyhydrogenexpertsduringdedicatedregionalworkshopsbetweenJuly2021andFebruary2022.METHODOLOGY3738WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP3940WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCANNEX1CONTEXTREGIONALDASHBOARDSAFRICAAFRICAPERFORMANCEINWETRILEMMAINDEX202146/100EnergySecurity60/100Environmentalsustainability26/100Energyequity0countriesinthetop14performers3countriesinthetop10improversAHUGEPOTENTIALBUTLITTLEINFRASTRUCTURE:HOWDOESAFRICAENABLEANEXPORTMARKETASWELLASGROWADOMESTICONE?SDGSAFRICANVIEWSONHYDROGENINISSUESMONITOR2022#10/25uncertainties#24/25impactNATIONALSTRATEGYDEVELOPMENTAsofMarch2022:-Developinglow-carbonhydrogencouldhelpAfricaintacklingissuesofenergyaccess,energyindependence,foodsecurityandlocalemployment-Africahassizeablerenewableenergyresourcestodeveloplow-carbonhydrogenproduction&importantmineralresourcestobepartofthevaluechainofenergytransitiontechnologies-However,therearemanychallengestoovercome:somecountries’concreteabilitytotakeadvantageofthehydrogeneconomyislimitedbythelackofinfrastructureandgeneralawareness,politicalandeconomicchallenges,andlackofdemandsecurity,aswellaswaterstress-NorthAfricahasmorefavourableconditions-Morocco,AlgeriaandEgyptinparticularcouldbefirstmoversandexportersofhydrogenanditsderivatives-Intheearlystageofhydrogendevelopment,thereareopportunitiestounlockinthehydrogeninnovationspacethatcouldpositionAfricancountriesastechnology-setters,nottakers-Regional&subregionalcooperation,&cooperationwithimportingmarketstodevelopAfricanhydrogentechnologiesandtocreateasharedvisionforhydrogen-Gapassessmentsforhumancapitalandinfrastructuredevelopment-Developingdomesticdemandinthetransport,industryandagriculturesectorsPOSITIONINGINTHEIMPORTEXPORTSPECTRUMBY20401strongly-exportorientedcountries6slightly-exportorientedcountries7self-sucientcountries11slightly-importorientedcountries1strongly-importorientedcountriesMARKETOPPORTUNITIESEnd-usespriorities:1-Energyaccess,2-Agriculture,3-Export,4-IndustryUniqueregionalissue:hydrogenationofunsaturatedvegetableoilsProductionsources:1-Renewablehydrogen,2-Naturalhydrogen,3-HydrogenfromnaturalgaswithCCUSREGIONALPATHKEYPOLICYENABLERSWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP2strategiespublished:2021–Morocco;2022–SouthAfrica1strategyinpreparation:Egypt8countrieswithinitialdiscussions&pilotprojects:Algeria,BurkinaFaso,CapeVerde,Mali,Mauritania,Namibia,Nigeria,Tunisia4142WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCCONTEXTASIAPACIFICPERFORMANCEINWETRILEMMAINDEX202158/100EnergySecurity61/100Environmentalsustainability68/100Energyequity1countryinthetop14performers5countriesinthetop10improversMAINSTREAMINGLOWCARBONHYDROGENANDITSDERIVATIVESANDCAPTURINGRELATEDECONOMICOPPORTUNITIESASIAPACIFICVIEWSONHYDROGENINISSUESMONITOR2022#5/25uncertainties#13/25impactNATIONALSTRATEGYDEVELOPMENTAsofMarch2022:-Asia-Pacificregionattheepicentreofthemovementtowardsa“hydrogeneconomy”-Japan,SouthKoreaandAustraliareleasedastrategyfirst-Integratedapproachtolow-carbonhydrogen-basedfuelsthatcansupportdecarbonisationeortsacrossamultitudeofapplicationsandsustaineconomicgrowthviainnovationandnewtechnologiesforexport-Interestincreasinginothercountries;althoughtheoverarchingplansareyettobereleased,inc.fromkeyplayersChinaandIndia-Intheearlystageoflow-carbonhydrogenuptake:definingprioritiesbetweenfuelscouldfacilitatethescaleupandmoreregionalandglobalcooperationisneededtotackletheobstaclestoglobaltradedevelopment(e.g.,lackofharmoniseddefinitionofhydrogensources,updatingmaritimeregulations,etc.)-Increasingbilateralandmultilateralcooperationtoprogressthelow-carbonhydrogenglobalsupplychainandhydrogentrade-Integratedapproachtoenergypolicies&mainstreaminghydrogenanditsderivativesinmanyaspectsofenergysystems-Supportinghydrogen-relatedtechnologiesandincreaseduseinmobilityPOSITIONINGINTHEIMPORTEXPORTSPECTRUMBY2040MARKETOPPORTUNITIESEnd-usespriorities:1-Industry,2-Mobility,3-PowergenerationUniqueregionalissue:exportoftechnologies(FCs,electrolysers);IronoreProductionsources:1-“Carbon-free”hydrogen(i.e.,low-carbon;noprejudiceofthetypeofhydrogen-renewablehydrogen,low-carbonhydrogenfromnaturalgasandcoalwithCCUS)REGIONALPATHKEYPOLICYENABLERSASIAPACIFICWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUPSDGS1strongly-exportorientedcountries4slightly-exportorientedcountries4self-sucientcountries5slightly-importorientedcountries4strongly-importorientedcountries3strategiespublished:2017–Japan;2019–Australia,SouthKorea5strategiesinpreparation:HongKong-China,India,NewZealand,Singapore,Uzbekistan7countrieswithinitialdiscussions&pilotprojects:Bangladesh,China,Malaysia,Maldives,Mongolia,Thailand,Vietnam4344WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCCONTEXTEUROPEPERFORMANCEINWETRILEMMAINDEX202166/100EnergySecurity74/100Environmentalsustainability90/100Energyequity11countriesinthetop14performers0countriesinthetop10improversAHIGHAMBITIONTODECARBONISEASFASTASPOSSIBLE,WHILEINCREASINGSECURITYOFSUPPLYANDTACKLINGTHEFLEXIBILITYISSUEEUROPEANVIEWSONHYDROGENINISSUESMONITOR2022#3/25uncertainties#19/25impactNATIONALSTRATEGYDEVELOPMENTAsofMarch2022:-ImpulsegivenbyGermany-nowEuropeisattheforefrontofhydrogendevelopmentworldwide-TheEUplanstorelyheavilyonlow-carbonhydrogentosupportitsdecarbonisationambitions,withhightargetsforimports(fromNorthAfrica,LatinAmerica,GulfStates,etc.)-SeveralchallengesintheEU-Moredissonantvoices:e.g.,onblending;onwhichlow-carbonproductionsources,purehydrogenvs.intermediatesteps(e.g.,powertomethane,ammonia,liquidfuels),etc.-Developingharmonisedstandardsandstreamliningregulationsiskeyforlow-carbonhydrogenrampup-Timelinegapbetweentheambitiousclimateagendaandhydrogeninfrastructureimplementation:verylargeinfrastructureprojects(notablyforimport)operationalafter2030.Inthemeantime,withinEurope,on-siteprojectsandhydrogenhubsaredevelopingtoanswerexistingdemandplayers,ando-siteelectrolysersinregionswithhighrenewableenergycapacitiescouldsupplypartoftheEuropeandemand-EliminatingregulatoryobstaclesintheEuropeanUnion(andmisalignmentbetweenMemberStates)-Moresupportmechanismsfortheproduction-sideandswitchincentivesforthedemand-side(e.g.,CCFDsorquotas)-Supportingthedevelopmentofinternationaltrade-MorecoordinatedhydrogendiplomacyactionintheEUPOSITIONINGINTHEIMPORTEXPORTSPECTRUMBY2040MARKETOPPORTUNITIESEnd-usespriorities:1-Industry,2-MobilityUniqueregionalissue:divergencesonusingH2inblendingProductionsources:1-Renewablehydrogen,2-HydrogenfromnaturalgaswithCCUS,3-Hydrogenfromothersources(nuclear,waste,biogenicmethane,methanepyrolysis,etc.)REGIONALPATHKEYPOLICYENABLERSEUROPEWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP1strongly-exportorientedcountries4slightly-exportorientedcountries9self-sucientcountries21slightly-importorientedcountries5strongly-importorientedcountries14strategiespublished:2020–EuropeanUnion,France,Germany,Netherlands,Norway,Portugal,Spain;2021–Belgium,CzechRepublic,Denmark,Hungary,Poland,Slovakia,UnitedKingdom12strategiesinpreparation:Austria,Croatia,Estonia,Italy,Lithuania,Romania,RussianFederation,Serbia,Sweden,Switzerland,Turkey,Ukraine13countrieswithinitialdiscussions&pilotprojects:Azerbaijan,Belarus,Bulgaria,Finland,Georgia,Greece,Iceland,Ireland,Kazakhstan,Latvia,Luxembourg,Malta,SloveniaSDGS4546WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCCONTEXTLACPERFORMANCEINWETRILEMMAINDEX202162/100EnergySecurity72/100Environmentalsustainability68/100Energyequity0countryinthetop14performers2countriesinthetop10improversINCREASINGSELFSUFFICIENCYANDDEVELOPINGNEWREGIONALCOOPERATIONLACVIEWSONHYDROGENINISSUESMONITOR2022#18/25uncertainties#14/25impactNATIONALSTRATEGYDEVELOPMENTAsofMarch2022:-Wideinteresttodevelophydrogenproductionanduse,focusingmainlyonhydrogenfromrenewableenergy,butconsideringallresourcesavailableonthecontinent-Developinglocaldemandistheprimaryobjectivetohelpdecarbonisetheeconomy-Chileistheearlymoverandgavetheimpulseonhydrogeninthecontinent,whichisnowverydynamic;momentumispickingupandregionalcooperationisincreasing-Thecontinentisattractingincreasedattentionfrompotentialimportingmarkets(e.g.,Netherlands,Australia,Japan)-CooperationcouldincreasetoattractmoreforeigninvestmentandinstalltheLACregionintheglobalhydrogenmarket-Regionalcooperationtoincreasevisibilityforthecontinentandattractexternalinvestments-Betteridentifyingandbuildingoneachcountry’sindividualstrengthsforanintegratedlow-carbonhydrogensupplychainPOSITIONINGINTHEIMPORTEXPORTSPECTRUMBY2040MARKETOPPORTUNITIESEnd-usespriorities:1-Industry,2-Mobility,3-Agriculture,4-Export(H2&productsusingH)Uniqueregionalissue:biofuels;explosives;pulp&paperindustryProductionsources:1-renewablehydrogen,2-hydrogenfromalllocallyavailablefossilfuelswithCCUSREGIONALPATHKEYPOLICYENABLERSLATINAMERICAANDTHECARIBBEANWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP2strongly-exportorientedcountries8slightly-exportorientedcountries0self-sucientcountries0slightly-importorientedcountries0strongly-importorientedcountries3strategiespublished:2020–Chile;2021–Colombia4strategiesinpreparation:Brazil,CostaRica,Panama,Paraguay,Uruguay4countrieswithinitialdiscussions&pilotprojects:Argentina,Bolivia,Peru,TrinidadandTobagoSDGS4748WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCCONTEXTMEGSPERFORMANCEINWETRILEMMAINDEX202155/100EnergySecurity48/100Environmentalsustainability97/100Energyequity0countryinthetop14performers0countryinthetop10improversLOWCARBONHYDROGENDRIVENBYCIRCULARCARBONECONOMYANDSUSTAININGENERGYEXPORTMEGSVIEWSONHYDROGENINISSUESMONITOR2022#4/25uncertainties#15/25impactNATIONALSTRATEGYDEVELOPMENTAsofMarch2022:-MomentuminMEGSisdrivenbytheenergyincumbents,inadditiontotheregion’sCircularCarbonEconomyagenda-InvestmentsarebeingimplementedwiththeendgoalofsustainingenergyexportstoexistingmarketsinEuropeandAsia-Existingvastoilandgasassets,coupledwithexcellentnaturalresourcesforrenewableenergyproduction,aremakingtheproductionoflow-carbonhydrogenintheregionamongthemostcompetitiveintheworld-SaudiArabia,theUAE,andOmanaredrivingthemomentumforlowcarbonhydrogen-Aspirationstobecomeanexporthuboflow-carbonhydrogenanditsderivatives-Foreignlawsandregulationscancreatepolicyobstaclesthatmighthinderthesegoals,particularlyregulationsrelatedtopotentialexports-Increasingregionalcollaborationandlearningfrompreviousfailedattempts-Developinglocalecosystemsandend-useapplicationsinthelocalmarketasopposedtoprimarilycreatinganexporthydrogenindustry-FinancesubsidiesandsupportmechanismstoenhancethebankabilityoflargepilotprojectsPOSITIONINGINTHEIMPORTEXPORTSPECTRUMBY2040MARKETOPPORTUNITIESEnd-usespriorities:1-Export,2-IndustryUniqueregionalissue:by-productsbeingexplored:oxygen,magnesiumProductionsources:1-hydrogenfromalllocallyavailablefossilfuelswithCCUS,2-renewablehydrogenREGIONALPATHKEYPOLICYENABLERSMIDDLEEASTANDGULFSTATESWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP4strongly-exportorientedcountries3slightly-exportorientedcountries1self-sucientcountries0slightly-importorientedcountries1strongly-importorientedcountriesSDGS0strategypublished3strategiesinpreparation:SaudiArabia,UnitedArabEmirates3countrieswithinitialdiscussions&pilotprojects:Bahrain,Israel,Kuwait4950WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCCONTEXTNORTHAMERICAPERFORMANCEINWETRILEMMAINDEX202173/100EnergySecurity68/100Environmentalsustainability96/100Energyequity2countriesinthetop14performers0countryinthetop10improversHIGHTECHNOLOGYREADINESSFACILITATINGMARKETCREATIONINSPECIFICSECTORSOFTHEECONOMY,WITHEXPORTSAMBITIONSNORTHAMERICAVIEWSONHYDROGENINISSUESMONITOR2022#1/25uncertainties#22/25impactNATIONALSTRATEGYDEVELOPMENTAsofMarch2022:-MomentumisemerginginCanadaandinspecificstateswithintheUS.-Goalistoincreaseandenhanceoverallresiliencyoftheenergysystemsoverthecomingdecades-Hightechnologyreadinessispushingthedomesticmarkettopickupend-useapplicationsparticularlyinthetransportsector-Developedregulationsandincentivestargetingcleanmobilityarepushingfurthertheuseoflow-carbonhydrogeninthetransportsector-Exportambitionsoflow-carbonhydrogenanditsderivativesarealsoemerging,especiallyastheregionisanexistingenergynetexporter-Priorityisonthecreationofhubswheresupplyanddemandarelocatedinthesameplace-Scalingandreducingthecostofhydrogentransportanddistribution-FundingsupportforR&Dandpilotanddemonstrationprojects-Creatinghubscentrestohelpde-riskfutureprojectsPOSITIONINGINTHEIMPORTEXPORTSPECTRUMBY2040MARKETOPPORTUNITIESEnd-usespriorities:1-Industry,2-MobilityUniqueregionalissue:exportoftechnologies(FCs)Productionsources:Low-carbonhydrogen(renewablehydrogen,fossilfuelbasedwithCCUS,etc.)REGIONALPATHKEYPOLICYENABLERSNORTHAMERICAWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP0strongly-exportorientedcountries2slightly-exportorientedcountries1self-sucientcountries0slightly-importorientedcountries0strongly-importorientedcountriesSDGS1strategypublished:2020–Canada1strategyinpreparation:UnitedStatesofAmerica1countrywithinitialdiscussions&pilotprojects:Mexico5152WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWCANNEX2LISTOFLOWCARBONHYDROGENVALLEYSThebelowtableshowsthelistofselectedhydrogenhubsprojectsincludedinFigure1.Theprojectswereselectedfrom“TheHydrogenValleyPlatform”database,the“HydrogenForward”database,andotheronlinesources,basedontheirabilitytocombineandlinkbothproductionandconsumptionoflow-carbonhydrogenandontheanticipatedsignificantvolumesinvolved.WORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUPWORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC53REFERENCESAfrica–EuropeHigh–LevelPlatformforSustainableEnergyInvestmentsinAfrica.(2019).Scaling-upenergyinvestmentsinAfricaforinclusiveandsustainablegrowth.EuropeanCommission.Baronas,J.G.(2019).JointAgencyStaReportonAssemblyBill8:2019AnnualAssessmentofTimeandCostNeededtoAttain100HydrogenRefuelingStationsinCalifornia.CaliforniaEnergyCommissionandCaliforniaAirResources.D’haeseleer,W.(2021).Apossibleroleofhydrogen-basedtechnologiesforsystemserviceassistanceinfullyRES-Dominatedenergysystems.KULeuven.EmiratesNewsAgency-WAM.(2021,1104).UAEannouncesHydrogenLeadershipRoadmap,reinforcingNation’scommitmenttodrivingeconomicopportunitythroughdecisiveclimateaction.AbuDhabi,UnitedArabEmirates.Fasihi,M.,&Breyer,C.(2020).BaseloadelectricityandhydrogensupplybasedonhybridPV-windpowerplants.JournalofCleanerProduction.HINICIO.(2021).GreenHydrogeninMexico:towardsadecarbonizationoftheeconomy.Bonn:DeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbH.IEA.(2021).GlobalHydrogenReview2021.Paris:InternationalEnergyAgency.IEA.(2021).HydrogeninLatinAmerica:Fromnear-termopportunitiestolarge-scaledeployment.Paris:InternationalEnergyAgency.IRENA.(2022).GeopoliticsoftheEnergyTransformation:TheHydrogenFactor.AbuDhabi:InternationalRenewableEnergyAgency.Jens,J.,Wang,A.,VanderLeun,K.,Peters,D.,&Buseman,M.(2021).ExtendingtheEuropeanHydrogenBackbone.Utrecht:Guidehouse.Mayyas,A.T.,Ruth,M.F.,Pivovar,B.,Bender,G.,&Wipke,K.(2018).ManufacturingCostAnalysisforProtonExchangeMembraneWaterElectrolyzers.UnitedStates:NationalRenewableEnergyLaboratory(NREL).MEED.(2022,February24).Neomhydrogenschemetoadvance.RetrievedfromPowerTechnology:https://www.power-technology.com/comment/neom-hydrogen-schemeMinistryofMinesandEnergy-Colombia.(2021).Colombia’shydrogenroadmap.Bogotá:GovernmentofColombia.Sailer,K.,Reinholz,T.,Lakeit,K.M.,&Crone,K.(2022).GlobalHarmonisationofHydrogenCertification.Berlin:GermanEnergyAgency;WorldEnergyCouncil–Germany.Sambo,A.(2021).Potentialsofhydrogenintheenergysector.Sokoto:FacultyofEngineeringandEnvironmentalDesign-UsmanuDanfodiyoUniversity.SnamS.p.A.(2018).SouthAmericaGasPipeline.Retrievedfromhttp://www.snamatlas.it/world_of_gas?focus=14U.S.DepartmentofEnergy.(2020).HydrogenStrategy:Enablingalow-carboneconomy.WashingtonDC:OceofFossilEnergy-UnitedStatesDepartmentofEnergy.WordEnergyCouncil-Europe.(2021).DecarbonisedhydrogenimportsintotheEuropeanUnion:challengesandopportunities.LaRevuedel’Énergie.HydrogenForward.(2022).UnitedStatesofHydrogen.RetrievedfromHydrogenForward:https://www.hydrogenfwd.org/united-states-of-hydrogenFuelCellsandHydrogenJointUndertaking;MissionInnovation.(n.d.).HydrogenValleys.RetrievedfromTheHydrogenValleyPlatform:https://www.h2v.eu/hydrogen-valleysWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP54LEADAUTHORS:LucieTogni(SeniorManager,Insights),RamiFakhoury(Manager,Insights)JosephStekli(ProgramManager,LowCarbonResourcesInitiative,EPRI),FlorianSchäfer(SeniorAssociate,SustainabilityServices,PwC),DajanaCzaja(GlobalMarketingOrganisation,StrategicMarketingManager,PwC)Wewouldalsoliketothankparticularlytheworkinggroupmembersfortheirinsightsandhelp:AlanSakar(Mexico)-AnaAngel(Colombia)-AnaSousa(Portugal)-AndrewClennett(NewZealand)-AngelLandaUgarte(Spain)-AngelaOgier(NewZealand)-ArditCami(Belgium)-BaldurPétursson(Iceland)-BartlomiejKolodziejczyk(Australia)-BassemMneymne(Qatar)-BrockKing(Canada)-BurkhardVonKienitz(Germany)–MairaKusch(Germany)-CarlosNavasPérez(Spain)-DMRPanda(India)-ElenaPashina(RussianFederation)-EkaterinaDerbilova(RussianFederation)-GabrielGuggisberg(Chile)-GassemFallatah(SaudiArabia)-Hans-WilhelmSchier(Germany)-JamesTyrrell(Australia)-Jean-EudesMoncomble(France)-JitendraRoychoudhury(SaudiArabia)-JónB.Skúlason(Iceland)-JoseCaceresBlundi(Switzerland)-LuciaFuselli(Luxembourg)-MassimilianoCervo(Argentina)-MeriemBellizim(UnitedArabEmirates)-NabilBouraoui(Tunisia)-NabilJedaira(Morocco)-PedroErnestoFerreira(Portugal)-RainerBlock(Germany)-RenataViggiano(Italy)-RussellPendlebury(Australia)-ShaneGowan(NewZealand)-SebastianVeit(Germany)-TinaSchirr(NewZealand)-TinasheChinembiri(Zimbabwe)-UlrikeHinz(Germany)-VictorAndresMartinez(Panama)-VictorioOxilia(Paraguay)-WilliamD’haeseleer(Belgium)WewouldalsoliketothankparticularlytheChairsandmoderatorsofeachregionalworkshopfortheirsupportintheorganisationandsuccessfulrunningofthesessions.WefinallythankalltheparticipantsineachregionalworkshopforsharingvaluableinsightsintohydrogenregionalspecificitiesforthedevelopmentoftheseWorldEnergyInsigths.PROJECTTEAMWORLDENERGYCOUNCILSTUDIESCOMMITTEEWORLDENERGYCOUNCILWORKINGGROUPMEMBERSADVISORANDREVIEWERS:AndreaMariaQuaggia(Italy)-BurkhardVonKienitz(Germany)-ClaudioHuepeMinoletti(Chile)-FrançoisDassa(France)-Hans-WilhelmSchier(Germany)-JuanBenavides(Colombia)-MamadouDiarra(Niger)-NawalYousifAlhanaee(UnitedArabEmirates)-RebeccaYuen(HongKong)-TinaSchirr(NewZealand)-TomKober(Switzerland)-WilliamD’haeseleer(Belgium)-YujiMatsuo(Japan)LeonhardBirnbaum(Chair,Germany)-AlejandroPerroni(Uruguay)-AndreaHeins(Argentina)-AndreyLogatkin(RussianFederation)-AtulSobti(India)-BarışSanlı(Turkey)-BerardoGuzzi(Italy)-EdouardSauvage(France)-HerwigKlima(Austria)-Jean-BaptisteGalland(France)-JeanneChiYunNg(HongKong)-JosephAlAssad(Lebanon)-KambizRezapour(Iran,IslamicRepublicof)-KaterinOsorioVera(Colombia)-KlausHammes(Sweden)-LawrenceEzemonye(Nigeria)-MehdiSadeghi(Iran,IslamicRepublicof)-MiguelPerezdeArce(Chile)-NalinShinghal(India)-StefanGheorghe(Romania)-YanbingKang(China)-YongpingZhai(China)ACKNOWLEDGEMENTSPROJECTMANAGEMENTDrAngelaWilkinson(SecretaryGeneral&CEO),NeilHughes(InternationalExecutiveDirector,EPRI),JeroenvanHoof(GlobalPower&UtilitiesLeader,Partner,PwCNetherlands),PaulAppleby(ChiefInsightsOcer),OlulanaNwosu(Director,Policy&Markets),CliodhnaO’Flaherty-Mouscadet(SeniorManager,Partners),GinaDomanig(InnovationExecutiveCo-chair),RichardLancaster(InnovationExecutiveCo-chair),SamMuraki(ViceChairofAsiaPacificandSouthAsia),Adj.Prof.DrJuergenPeterseim(GlobalH2IndustryLead,PwC),DrOlesyaHatop(GlobalClients&MarketsIndustryExecutive,PwC)WORLDENERGYCOUNCILINCOLLABORATIONWITHEPRIANDPWC55TRUSTEESWORLDENERGYCOUNCILPARTNERSJEANMARIEDAUGERChairMIKEHOWARDCo-ChairLEONHARDBIRNBAUMChair–StudiesCommitteeLEONHARDBIRNBAUMChair–StudiesCommitteeOLEGBUDARGINViceChair–Congress,2022NORBERTSCHWIETERSViceChair–FinanceBEATRICEBUFFONViceChair–EuropeKLAUSDIETERBARBKNECHTViceChair–StrategicAlliancesCLAUDIACRONENBOLDViceChair–LatinAmerica/CaribbeanELHAMMAHMOUDIBRAHIMViceChair–AfricaSHIGERUMURAKIViceChair–AsiaPacific/SouthAsiaFAHADALTURKIViceChair–GulfStates/MiddleEastJOSEANTONIOVARGASLLERASChair–ProgrammeCommitteeOMARZAAFRANIChair–Communications&StrategyCommitteeANGELAWILKINSONSecretaryGeneralCaliforniaISOEDFENGIEOliverWymanPwCSwedishEnergyAgencyTokyoElectricPowerCoWORLDENERGYINSIGHTS:WORKINGPAPERREGIONALINSIGHTSINTOLOWCARBONHYDROGENSCALEUP56awaitingmembershipapproval62–64CornhillLondonEC3V3NHUnitedKingdomT(+44)2077345996F(+44)2077345926Einfo@worldenergy.orgwww.worldenergy.org@WECouncilWORLDENERGYCOUNCILMEMBERCOMMITTEESAlgeriaArgentinaArmeniaAustriaBahrainBelgiumBoliviaBosnia&HerzegovinaBotswanaBulgariaCameroonChileChinaColombiaCongo(Dem.Rep.)Côted’IvoireCroatiaCyprusDominicanRepublicEcuadorEgypt(ArabRep.)EstoniaeSwatini(Swaziland)EthiopiaFinlandFranceGermanyGreeceHongKong,ChinaSARHungaryIcelandIndiaIndonesiaIran(IslamicRep.)IrelandItalyJapanJordanKazakhstanKenyaKorea(Rep.)KuwaitLatviaLebanonLithuaniaMaltaMexicoMonacoMongoliaMoroccoNamibiaNepalNetherlandsNewZealandNigerNigeriaNorwayPakistanPanamaParaguayPolandPortugalRomaniaRussianFederationSaudiArabiaSenegalSerbiaSingaporeSloveniaSpainSriLankaSwedenSwitzerlandSyria(ArabRep.)ThailandTrinidad&TobagoTunisiaTurkeyUnitedArabEmiratesUnitedStatesofAmericaUruguayVietnam
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