Australia, Middle East could lead ‘green’ hydrogen exports: WoodMac
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According to Wood Mackenzie, the most potential for major global exporters of green hydrogen is in Australia and the Middle East.
Green hydrogenProduced using renewable energy rather than fossil fuels. It can be used as a clean power source for sectors such as manufacturing and transportation — but it is expensive to produce and difficult to transport.
Still, an expected surge in demand for low-carbon hydrogen — which includes green hydrogen — has prompted several countries to announce plans to build hydrogen exporting capabilities. Wood Mackenzie reported that almost 60% of these projects were in Australia or the Middle East.
Australia vs. Middle East
Prakash Sharma of the consultancy, who is the head for markets and transitions Asia-Pacific, stated that both Australia and the Middle East could be major buyers in Northeast Asia or Europe.
“The proximity is going to help … Australia is close to the Northeast Asian market but also Middle East could go anywhere in both directions — it could go to Europe and it could also potentially go to the Northeast Asia market,” Sharma told CNBC’s “Squawk Box Asia“, Thursday.
What market is able to meet the challenges and cost of the project? He also mentioned that hydrogen transport, particularly over long distances is possible.
“I believe companies and countries are skilled in the production on site, but when it comes down to logistics, I feel it can be any company’s challenge,” he stated.
Sharma said that Australia is able to export green hydrogen to Northeast Asia because of its trade relationship. Sharma said that Australia is already an important exporter of many natural resources and minerals and holds great potential for renewable energy.
Hydrogen: The game changer?
Demand for low-carbon hydrogen could rise six-fold to as high as 530 million tonnes by 2050 — if countries keep global warming within 1.5 degrees Celsius above pre-industrial levels, said Wood Mackenzie.
According to the consulting, almost 150 million tonnes could be transported via sea for this low-carbon hydrogen need. According to the consultancy, Northeast Asia could be responsible for 55% of this seaborne hydrogen trade while Europe could contribute 16%.
Green hydrogen’s potential is still limited. However, there are many obstacles to wider adoption.
Christian Bruch was the chief executive officer of Siemens Energy. He spoke during CNBC’s Sustainable Future ForumIt was announced last week that the site is now available “no commercial case” for using green hydrogenAt this moment.
Wood Mackenzie however said that hydrogen can be a gamechanger in the global effort to reduce carbon emissions and increase energy security.
As technology develops, the costs for producing green hydrogen will drop. According to the consultancy. It said that this will encourage producers to switch to clean energy sources.
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