Green Hydrogen: A Game-Changer for the Global South’s Green Industrialization and the Future of Energy Trade
As the world accelerates its shift toward sustainable development and a low-carbon economy, green hydrogen is emerging as a pivotal force in driving the global energy transition. Produced through electrolysis using only renewable energy, green hydrogen is not just seen as an efficient energy carrier, but also as a key enabler of transforming global industrial structures, ensuring energy independence, and expanding participation in global trade and markets. For the Global South, it represents a significant opportunity for green industrialization, enhanced energy security, and economic diversification.
The most striking advantage of green hydrogen lies in its ability to provide clean alternatives for several traditional, carbon-intensive industries. These sectors, including steel production, chemicals, and heavy-duty transport, are actively exploring how to replace “grey hydrogen” (produced from fossil fuels) with green hydrogen. For instance, the steel industry is increasingly turning to direct reduction (DRI) processes using green hydrogen to produce steel, which significantly reduces carbon dioxide emissions.
In the energy-intensive heavy-duty transport sector, green hydrogen and its derivatives—such as ammonia, e-fuels, and e-kerosene—are poised to replace fossil fuels in aviation, maritime shipping, and long-haul trucking. These industries have historically relied on fossil fuels, but green hydrogen offers an environmentally friendly and energy-dense alternative. Forecasts from multiple international organizations suggest that hydrogen and its derivatives will increasingly play a dominant role in the transport sector in the years to come.
However, the advantages of green hydrogen go beyond its industrial applications. Another critical benefit is its potential to address seasonal energy storage challenges. In regions where renewable energy supply fluctuates, green hydrogen can be produced during periods of high renewable energy availability and consumed when energy demand peaks. This long-duration, large-scale energy storage solution enhances the resilience and reliability of electricity systems.
The International Renewable Energy Agency (IRENA) has projected that around 20% of the global hydrogen demand will be met through international trade flows. Due to the uneven distribution of renewable energy resources across the world, the international trade of green hydrogen and its derivatives is beginning to take shape. Although the demand for hydrogen is primarily concentrated in developed regions, the Global South—especially Latin America, Sub-Saharan Africa, and North Africa—stands to become a major supplier of these commodities in the coming decades.
Latin America, for example, has the potential to leverage its abundant solar and wind resources and existing industrial infrastructure to become a key supplier of green hydrogen and its derivatives, including ammonia and e-methanol, to markets in North America, Europe, and Asia. Countries like Brazil, Argentina, and Chile, with their rich renewable resources, are well-positioned to produce cost-competitive green hydrogen, driving economic growth and energy transition in the region.
Sub-Saharan Africa, with its vast land and favorable climatic conditions, also holds immense potential for green hydrogen production. These countries not only have the capacity to meet domestic energy needs but can also export green hydrogen, contributing to the global energy supply chain. Leading projects, such as South Africa’s green hydrogen production hubs, are setting a strong precedent for energy transformation and economic development in the region.
North Africa, particularly countries like Morocco and Algeria, is strategically positioned to become a key supplier of green hydrogen to Europe, thanks to its proximity to European markets. According to IRENA’s analysis, North Africa could supply approximately 18% of the European Union’s green hydrogen and related commodities by 2050, fostering robust energy trade between the Euro-Mediterranean region and beyond.
To unlock these opportunities, developing countries in the Global South must coordinate policy frameworks with infrastructure development in a holistic energy transition strategy. The development of substantial renewable energy generation capacity, along with necessary transport and storage infrastructure, is essential to achieving this vision. IRENA estimates that global investment in hydrogen infrastructure will total USD 2.49 trillion by 2050, encompassing 4.7 terawatts of renewable energy capacity, 2.1 terawatts of electrolyzers, and 0.9 terawatt-hours of battery storage.
Europe, with its advanced green hydrogen projects, offers a valuable example of how strategic investment and collaboration can drive the development of this emerging sector. Countries such as Germany, the Netherlands, and Denmark have already committed significant resources to green hydrogen production, storage, and transportation, positioning themselves as leaders in the global green hydrogen market. The European Union’s Green Deal also recognizes the importance of green hydrogen, and has earmarked substantial funding and policy support to foster its development and use, aiming to meet long-term decarbonization targets.
Green hydrogen is more than just an energy product—it is a catalyst for green industrialization. In the Global South, the rise of green hydrogen presents opportunities for job creation, economic growth, and sustainable development. By producing and exporting green hydrogen, developing countries can transition from energy importers to exporters, thereby strengthening their energy security and boosting economic resilience.
As the green hydrogen value chain evolves, its market potential is becoming a focal point for competition worldwide. However, developing green hydrogen requires not just technological innovation and market demand, but also close cooperation between countries, particularly those in the Global South with abundant renewable energy resources. By establishing sound policy frameworks, increasing infrastructure investments, and promoting international collaboration, developing countries can carve out a significant role in the global hydrogen value chain, accelerating their own energy transitions and contributing to the global journey towards net-zero emissions.
The rise of green hydrogen offers the Global South a transformative opportunity to play a crucial role in the global energy supply chain. This shift could not only contribute to the fight against climate change but also promote economic diversification and industrialization in developing regions. As the green hydrogen industry matures, it will reshape the global energy landscape, with the Global South emerging as an indispensable partner in achieving global sustainability goals.