As the global energy transition accelerates, green hydrogen is emerging as a pivotal element in the ongoing energy revolution, playing an indispensable role in achieving carbon neutrality goals. Green hydrogen is produced via electrolysis using renewable energy, and it serves not only as an energy carrier but also as a clean feedstock that can replace traditional fossil-based energy sources, dramatically reducing greenhouse gas emissions.
Beyond its role in energy decarbonization, green hydrogen offers numerous economic and societal benefits, driving green industrialization, enhancing energy independence, fostering participation in global trade, and creating significant employment opportunities.
Currently, many countries and regions around the world are investing heavily in the development of green hydrogen and its derivatives, such as ammonia, methanol, and others. These hydrogen-derived products are not only energy carriers but also essential industrial feedstocks.
Traditional "grey" hydrogen—produced from fossil fuels like natural gas—already plays a critical role in several industrial sectors. Green hydrogen, as a cleaner alternative, can replace grey hydrogen, helping to decarbonize carbon-intensive industries.
Take the fertilizer industry as an example. Green hydrogen has significant potential in ammonia production, a key ingredient in global agricultural production. Currently, most ammonia is synthesized using fossil fuels, a process that generates large amounts of CO2 emissions. By using green hydrogen to produce ammonia, the carbon footprint of the sector can be reduced, leading to more sustainable farming practices.
As green hydrogen technology advances, more carbon-intensive industrial processes will undergo decarbonization. For example, the steel industry is exploring the use of green hydrogen in direct reduction iron (DRI) technology to replace traditional high-carbon energy sources.
The heavy-duty transport sector also holds considerable potential for the application of green hydrogen. Aviation, shipping, and long-haul trucking sectors have long relied on fossil fuels to provide energy-dense solutions for extended journeys.
Green hydrogen and its derivatives, such as ammonia and e-fuels (e.g., e-kerosene, e-methanol), offer promising clean alternatives. For instance, hydrogen-powered fuel cell technology is being explored for long-haul trucking, and hydrogen could be a key aviation fuel for decarbonizing the aviation industry.
Moreover, green hydrogen offers a solution to the critical issue of seasonal energy storage. Due to the intermittent nature of renewable energy, such as wind and solar, storing surplus energy during high-production periods and utilizing it during peak demand is a significant challenge. Green hydrogen provides a promising solution to this problem.
By electrolyzing water to produce hydrogen when renewable energy is abundant, it can be stored and released during times of high electricity demand. This large-scale, long-duration storage capability is particularly valuable in regions with high renewable energy potential, such as wind and solar-rich areas.
With increasing global attention on green hydrogen, the formation of international markets and trade flows is becoming an integral part of the global energy transition. According to the International Renewable Energy Agency (IRENA), it is estimated that by 2050, around 20% of the global hydrogen demand will be met through international trade. This emerging market will significantly diversify global energy supplies and offer energy-poor regions the opportunity to engage in the global trade of green hydrogen and its derivatives.
The Global South, particularly regions such as Latin America, Sub-Saharan Africa, and North Africa, is poised to become a major player in the production of green hydrogen and its derivatives, leveraging their abundant renewable energy resources.
The cost of producing green hydrogen is primarily driven by electricity costs, and these regions are endowed with excellent solar and wind resources, providing them with a competitive edge in hydrogen production. As such, they have the potential to produce green hydrogen at lower costs and export it to global markets.
Latin America is a prime example of this potential. The region is not only rich in solar and wind resources but also possesses established industrial infrastructure that can rapidly develop a green hydrogen industry.
Countries like Mexico, Argentina, and Brazil are well-positioned to become major suppliers of green hydrogen and its derivatives, such as ammonia, e-methanol, and direct reduced iron (DRI). Latin America's energy transition could drive sustainable economic development in the region and contribute to a more diverse global energy supply chain.
Sub-Saharan Africa also faces significant opportunities. The African continent boasts vast land resources and abundant renewable energy potential, particularly in solar and wind energy. The region’s green hydrogen industry could meet both domestic energy demands and support exports, contributing to the global green energy market. Africa's strategic location offers efficient access to European and Asian markets, providing the region with critical connectivity for energy trade.
North Africa holds a similarly strategic role in the global green hydrogen landscape. Due to its proximity to Europe, North Africa is well-positioned to meet Europe’s growing green energy demand. According to IRENA's analysis, by 2050, North Africa could supply approximately 18% of Europe’s green hydrogen and related commodities, strengthening Euro-Mediterranean energy trade and building on existing energy cooperation frameworks between the two regions.
As green hydrogen production capacities rise in these regions, the Global South is poised to become an increasingly vital part of the global energy transition. By developing green hydrogen industries, these regions can achieve energy independence and establish themselves as key players in the global energy supply chain, ultimately driving green industrialization and realizing high-quality economic growth.
However, despite the tremendous opportunities, the Global South faces several challenges. First, green hydrogen production requires substantial upfront investments in infrastructure, electrolyzers, and energy transmission systems. Attracting international funding and technological support will be crucial for these regions to develop their green hydrogen industries.
Second, the international trade of green hydrogen still faces technical, policy, and market-related hurdles. For example, the storage and transportation of hydrogen remain significant challenges, and further advancements in related technologies are needed to ensure efficient, safe, and economical hydrogen transport.
Despite these challenges, green hydrogen remains a key driver of global energy transformation, particularly for the Global South. By advancing green hydrogen industries, these regions not only achieve energy independence but also play a critical role in the global energy supply chain, driving green industrialization and delivering both economic and environmental benefits.
The international trade of green hydrogen and its derivatives will create jobs, stimulate skills development, and promote regional economic advancement, leading to a comprehensive socio-economic transformation.
The Global South's potential to become a key hub for green hydrogen production and trade represents a transformative opportunity for economic and sustainable development.