Renewable Hydrogen to Play a Key Role in Global Energy Transition, Say IRENA and WTO
Renewable hydrogen and its derivatives are expected to constitute nearly 14% of global final energy consumption by 2050, according to a joint report by the International Renewable Energy Agency (IRENA) and the World Trade Organization (WTO). The report, unveiled at the 29th UN Climate Change Conference (COP29) in Baku, highlights the critical role of renewable hydrogen in decarbonizing hard-to-abate sectors, particularly in industries where it can serve as a key raw material.
While renewable electricity and biofuels are projected to satisfy the majority of energy demand by mid-century, hydrogen-based products such as ammonia, methanol, and e-kerosene will be indispensable for sectors like heavy industry. However, the report warns that global economic conditions and climate variability may cause fluctuations in the costs of producing renewable hydrogen and its derivatives across regions.
The WTO emphasizes that countries with abundant renewable energy resources could emerge as major exporters, while nations with limited resources but strong industrial sectors may rely on imports to meet their decarbonization needs. Establishing a global market for hydrogen products could drive competitiveness, reduce costs, and promote the development of production facilities in resource-rich regions.
To facilitate the transition, substantial infrastructure investments, such as pipelines and transport systems, will be needed to connect producers with consumers. The report also stresses the importance of sustainable supply chains, including securing essential resources like water and carbon inputs for methanol and e-kerosene production.
The WTO and IRENA propose a series of policy recommendations to support the international trade and development of renewable hydrogen markets. These include harmonizing standards and certification systems, offering government support, adjusting tariffs, and implementing carbon pricing mechanisms. Policymakers are urged to align these measures with their national resources and international trade goals to foster the growth of this emerging market.
