Meeting the climate goal of limiting the temperature rise to 1.5 degrees celsius would need hydrogen trading to come into play, contributing to a “more diversified and resilient energy system."
In a statement, the International Renewable Agency (IRENA) said hydrogen trading will allow countries to include affordable hydrogen in their energy mix as the scale of projects and technology advance.
“Having access to abundant renewables will not be enough to win the hydrogen race, it’s also necessary to develop hydrogen trade,” said IRENA Director-General Francesco La Camera.
“It is true that hydrogen trade offers multiple opportunities from decarbonising industry to diversifying supplies and improving energy security. Energy importers can become the exporters of the future,” he added.
An IRENA report said that one-quarter of the global hydrogen demand could be met by international trade through pipelines and ships. The remaining three-quarters of global hydrogen would be produced and used locally in 2050, as costs of renewables fall and hydrogen potentially exceed global energy demand by 20-fold.
The agency said that this will be a significant change from the current oil market where the bulk is internationally traded.
La Camera said that government should make efforts to “turn trade aspirations into reality.”
“A mix of innovation, policy support and scale can bring the necessary cost reduction and create a global hydrogen market. Whether trade potentials can be realised will strongly depend on countries’ policies and investment priorities and the ability to decarbonise their own energy systems,” he added.
IRENA’s World Energy Transitions Outlook expects hydrogen to cover 12% of the global energy demand and cut 10% of carbon dioxide emissions by 2050. However, it said that hydrogen would only be viable if the power needed to generate it is present, aside from the electrification of the energy system.