09 May 2022

Europe Sees Huge Hydrogen Opportunity in Asia

09 May 2022  by   

Hot on the tail of Europe, which has expanded its green hydrogen production over the last year, Asia is developing its hydrogen industry to become a major producer over the next decade. As several countries announce renewable energy strategies, green hydrogen, as well as hydrogen produced using carbon capture technologies, will play a major role.

Green hydrogen demand is expected to increase dramatically as the world transitions away from fossil fuels to renewable alternatives. Hydrogen demand could reach anywhere between 150 to 500 million metric tonnes per year by 2050, depending on global climate ambitions, according to a PWC report. While green hydrogen is much more expensive to produce than grey hydrogen – derived from natural gas production – the push by governments around the world to curb carbon emissions by the end of the decade is already driving up demand for the green alternative. Companies are now racing to produce low-cost green hydrogen, using new technologies and techniques, in the hope that they can become more competitive.

Last year, India announced a new green hydrogen strategy, although its technology for the production of green hydrogen is still in its infancy. Despite skepticism around the anticipated rapid growth of India’s green hydrogen industry, it has already developed its solar energy sector substantially over the last decade, showing what can be done with enough political will. India now has 50 GW installed solar capacity, adding a record 10 GW in 2021 alone.

India expects to produce 5 million tonnes of the fuel by 2030, promoting the country as a green hydrogen hub. Several initiatives have been seen in recent months supporting this production goal, including an investment of $75 billion by India’s Reliance Industries in the green energy market, including green hydrogen. In addition, in April Greenko group and Belgium-based John Cockerill committed to the construction of a 2GW hydrogen electrolyzer gigafactory in India. This would be the biggest in the world outside of China. The Indian Oil Corporation also announced a partnership with two private firms for green hydrogen production. Now, European governments are eyeing Asia’s green hydrogen potential, as Germany announces an agreement for German-Indian hydrogen cooperation. This comes as part of the country’s plan for “hydrogen diplomacy” as it seeks to develop more friendly energy allies in the wake of Russian energy provision. Germany’s Minister of Economic and Climate Affairs Robert Habeck stated “As part of our energy partnership with India, we have agreed to work together in more depth on developing innovative solutions for sustainable green hydrogen production. An important milestone in reducing our dependence on fossil fuels.”

With 7,500 kilometers of coastline and an abundance of sun, India is well-located to produce the renewable energy required to support green hydrogen production. Germany and India are now expected to create a task force, which will develop a road map for the development of the green hydrogen industry and how that will look for the two countries.

Prime Minister Narendra Modi stated during the COP26 climate summit last year that “It is India’s expectation that the world’s developed nations make $1 trillion available as climate finance as soon as possible.” He believes that India could quickly become a renewable energy hub, establishing both domestic energy security and creating much-needed links to support other countries with their clean energy needs.

But India is not the only Asian country looking to develop its hydrogen market. In Japan, several energy firms are planning for the introduction of fuel-cell electric vehicles (FCEVs), reliant on hydrogen fuel. Early on, in 2015, Japan stated its vision of a “hydrogen society”. The Japanese government has announced hydrogen strategies in previous years, with the aim of achieving 800,000 cumulative FCEV sales and establishing 1,000 refueling stations by 2030. In addition, hydrogen is a pivotal part of Japan’s Strategic Energy Plan. However, to date, Japan’s strategy remains largely centered around blue hydrogen, derived from fossil fuels.

Meanwhile, China needs to step up its game if it wants to meet its hydrogen targets. China previously announced an aim of producing between 100,000 and 200,000 tonnes of green hydrogen a year by 2025. However, new technologies and breakthroughs in the green energy industry will be needed to meet this production level.

At present, China is the biggest hydrogen producer globally, with an output of 33 million tonnes a year. But most of this, around 80 percent, is still derived from carbon produced from natural gas operations. This is largely due to the high cost of green hydrogen production using renewable energy. Although its aims for green hydrogen are ambitious, China will need to invest heavily in the development of new technologies and techniques if it hopes to boost its green hydrogen output substantially over the next decade.

While Europe is leading in green hydrogen production, several Asian countries have announced plans to develop their green hydrogen markets over the next decade, with the potential to significantly boost output.


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