1、GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENTA POLICY TOOLKIT FOR DEVELOPING COUNTRIES2AcknowledgementThis report is the result of a joint effort between The United Nations Industrial Development Organization(UNIDO),TheInternational Renewable Energy Agen-cy(IRENA)and The German Institute of

2、Development and Sustainability(IDOS).It was authored by Smeeta Fokeer,Jan Sievernich and Andrea Heredia(UNIDO),Emanuele Bianco and Yury Melnikov(IRENA),and Rita Strohmaier,Almudena Nunez and Andreas Stamm(IDOS).The authors would like to express their sincere gratitude to all those who contributed to

3、 this report.Special appreciation is extended to the following experts for their reviews of the report:Dolf Gielen(World Bank),Freda Opoku and Eisuke Tachibana(Af-rican Development Bank);Fabian Barrera,Matthias Deutsch,Zaffar Hussain and Paul Mnnich(Agora Energiewende);Jan Frederik Braun(Fraunhofer

4、Hy-drogen Cooperation MENA Head);Ute Collier,Ann Kathrine Lipponer,Francisco Boshell,Luis Janeiro and Paul Komor(IRENA);Cindy Parokkil,Maria Sandqvist and Kirsi Silander-van Hunen(ISO);Rasmus Wendt(NunaGreen);Deger Saygin(OECD);Michele Clara(UNIDO);Rainer Quitzow(Research Institute for Sus-tainabili

5、ty,Potsdam);Ludovico Alcorta(UNMERIT);and Frank Wouters(Mena Hydrogen Alliance).The publication of this report,which was developed under the Global Programme for Hydrogen in Indus-try,was made possible through the generous fund-ing from the Deutsche Gesellschaft fr Internationale Zusammenarbeit GmbH

6、(GIZ).IDOS would also like to acknowledge funding received from the German Federal Ministry of Education and Research(BMBF)through the project“Global Hydrogen Potential At-las”(HYPAT).The layout of the report was prepared by Maria Grineva(UNIDO).DisclaimerThis document has been produced without form

7、al United Nations editing.The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of UNIDO,IRENA and IDOS concerning the legal status of any country,territory,city,or area or of its authoriti

8、es,or concerning the delimitation of its frontiers or boundaries,or its economic system or degree of development.Designations such as“developed”,“industrialized”or“developing”are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular c

9、ountry or area in the development process.Mention of firm names or commercial products does not constitute an endorsement by UNIDO,IRENA and IDOS.Material in this publication may be freely quoted or reprinted,but acknowledgement is requested,together with a copy of the publication containing the quo

10、tation or reprint.Copyright 2023 UNIDO,IRENA and IDOSGREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENTA POLICY TOOLKIT FOR DEVELOPING COUNTRIESDecember 2023First edition4|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESContentsForeword.12Executive s

11、ummary.131.Introduction.161.1.Why green hydrogen(GH2)?.161.2.Identifying potential GH2 producers.161.3.Exploring GH2 applications.171.4.Global demand and the hydrogen industrys future outlook.181.5.A price forecast for GH2.181.6.What are the prospects for renewable-rich developing countries?.191.7.O

12、vercoming the challenges of technological barriers and high production costs.191.8.Harnessing the transformative potential of GH2.192.The GH2 industry:reframing the narrative.222.1.Envisioning the role of GH2 in developing countries.232.2.Unravelling the benefits and barriers of GH2 trade.252.3.The

13、potential of GH2 to transform industrial development.292.4.Building the GH2 value chain.332.5.The clover approach to GH2 development.353.Backward linkages in GH2 production.383.1.Strategies for attracting investors to GH2 production.403.2.Sustainable procurement of electricity for electrolysers.423.

14、3.Technology acquisition and local manufacturing options.433.3.1.Scenario 1:Local content requirement(LCR).433.3.2.Scenario 2:Long-term stimulation of the countrys own R&D.443.3.3.Just transition aspects of hydrogen production projects.454.Local downstream market creation policies.484.1.Regulatory c

15、larity and stability.494.2.Providing support for early movers.524.3.Demand creation policies.564.4.Value chain integration and coordination.58|5|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH25.Transport and distribution policies.645.1.Planning GH2

16、infrastructure,transport and storage.655.1.1.Pipelines vs maritime transport.675.1.2.GH2 carriers.695.1.3.GH2 storage facilities.715.1.4.Just transition dimension.725.2.Regulating transport.725.3.Infrastructure financing.736.Options for international cooperation to support national policymaking.766.

17、1.Co-financing the development of a policy framework.766.2.Multilateral cooperation in science,technology and innovation.776.3.Knowledge sharing:Dialogue and capacity development.786.4.Policy to support financing from the Global North to the Global South.796.5.International coordination for hydrogen

18、 trade routes.806.5.1.Intergovernmental Memorandums of Understanding.816.5.2.International standards and certification.826.5.3.International collaboration for trade corridors.836.5.4.International collaboration for trading green products.83Policy sheets.86Bibliography.986|GREEN HYDROGEN FOR SUSTAINA

19、BLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESList of FiguresFigure 1.1.Policy priorities for GH2 applications.17Figure 1.2.Hydrogen cost forecasts.18Figure 1.3.Cumulative number of NHS by UN country classification and year of first publication.20Figure 1.4.GH2 value chain link

20、ages.20Figure 2.1.Publication of NHS by year of publication and region.22Figure 2.2.Visualization of the global hydrogen partnership network.26Figure 2.3.Activity clusters along the GH2 value chain.30Figure 2.4.Contextual factors shaping the development of large technical systems such as GH2.34Figur

21、e 2.5.The clover approach to the GH2 market.36Figure 3.1.Prerequisites for GH2 production projects.39Figure 4.1.Share of abatable industries in total exports 2022.53Figure 4.2.GH2 cluster model.59Figure 5.1.Most cost-effective hydrogen transport pathway in 2050.68Figure 5.2.Cost of hydrogen delivery

22、 for various transport distances.69Figure 5.3.Energy losses for different energy carriers.71Figure 5.4.Capital cost of a hydrogen pipeline,and total transport cost by cost component.74Figure 6.1.Existing bilateral MoU as of October 2023.82List of TablesTable 2.1.Topics mentioned in NHS.24Table 2.2.G

23、H2 projects at advanced stages of development.28Table 2.3.Activity clusters related to GH2 production.32|7|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2List of BoxesBox 2.1.Global Hydrogen Partnership Network.26Box 2.2.The renewables pull effect.3

24、1Box 2.3.Just transition.35Box 3.1.Namibia.38Box 3.2.Trinidad and Tobago.39Box 3.3.Namibias Implementation Authority Office.41Box 3.4.Local manufacturing and technology development:Cases from NHS.45Box 4.1.Example of GH2 strategy:Morocco.50Box 4.2.Just Energy Transition Partnerships(JETPs).55Box 4.3

25、.Green goods certification insights.56Box 4.4.Chile:Antofagasta GH2 hub.60Box 4.5.Knowledge sharing in Chiles solar energy industry.61Box 5.1.Hydrogen as an indirect GHG.73Box 5.2.Kochi Green Hydrogen(KGH2)Hub project.74Box 6.1.International Masters Programme in Energy and Green Hydrogen.79Box 6.2.E

26、Us Carbon Border Adjustment Mechanism(CBAM).848|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESList of Abbreviations ADB Asian Development BankAHJ Authorities having jurisdictionBF-BOF Blast furnace basic oxygen furnace BMBF German Federal Ministry of

27、Education and ResearchBoP Balance of planCAPEX Capital expenditureCBAM Carbon Border Adjustment Mechanism CBDR Common but Differentiated ResponsibilitiesCCS Carbon capture and storage CEM Clean Energy MinisterialCO2 Carbon dioxideCoC Certificate of conformityCOP Conference of PartiesCSR Corporate so

28、cial responsibility DFI Development finance institutionDRI Direct reduced ironEBRD European Bank for Reconstruction and DevelopmentESMAP The Energy Sector Management Assistance ProgramEU European UnionFDI Foreign direct investmentGCA Global Climate AllianceGDP Gross domestic productGEP Green Energy

29、ParkGH2 Green hydrogenGHG Greenhouse gasGHIC Green hydrogen industrial clustersGIZ German Agency for International Cooperation|9|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2GPHI Global Programme for Green Hydrogen in IndustryH2 HydrogenH4D Hydrog

30、en for DevelopmentIHEC International Hydrogen Energy CenterHFC Hydrogen and fuel cellIAO Implementation Authority Office IEC International Electrotechnical CommissionIPHE International Partnership for Hydrogen and Fuel Cells in the EconomyIRENA International Renewable Energy Agency ISO International

31、 Organization for Standardization JETPS Just Energy Transition PartnershipsKg Kilogramme KPIs Key performance indicatorsLCOE Levelized costs of energyLCOH Levelized costs of hydrogenLCR Local content requirement LDC Least developed countryLH2 Liquefied hydrogenLOHC Liquid organic hydrogen carriersMD

32、Bs Multilateral development banksMENA Middle East and North AfricaMoU Memorandum of Understanding Mt Million tonnesMW MegawattMWh Megawatt hourNDCs Nationally determined contributionsNGHRI Namibia Green Hydrogen Research Institute10|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOL

33、KIT FOR DEVELOPING COUNTRIESNH3 Ammonia NHS National hydrogen strategyOECD Organisation for Economic Co-operation and DevelopmentO&M Operations and maintenance OPEX Operations expensesPEM Proton exchange membrane PGM Platinum group metals PPA Power purchase agreementPPP Public-private partnershipPtX

34、 Power-to-XRAB Regulated asset baseR&D Research and development RE Renewable energySAF Sustainable aviation fuel SDGs Sustainable Development Goals SEZ Special economic zoneSOEC Solid oxide electrolyser cellUN United NationsUNECE United Nations Economic Commission for EuropeUNFCCC United Nations Fra

35、mework Convention on Climate ChangeUNIDO United Nations Industrial Development Organization USAID United States Agency for International DevelopmentVAT Value added taxVRE Variable renewable energyWACC Weighted average cost of capitalWASCAL West African Science Service Centre on Climate Change and Ad

36、apted Land UseWTO World Trade Organization|11|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH212|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGreen Hydrogen represents a unique opportunity for the cle

37、an energy transition.Climate change is an existen-tial threat to a sustainable future,but at the same time,facing up to the climate challenge is an opportunity to promote prosperity and a brighter future for all.Green hydrogen and its derivatives will play a vital role in the just energy transition.

38、This collaboration between UNIDO,the International Renewable Energy Agency(IRENA)and the German Institute of Development and Sustainability(IDOS)has synergized our collective commitment to fostering a global energy transition that leverages green hydrogen.This partnership focuses on amplifying inter

39、national cooperation to facilitate the investment,policy-making and clean technology adoption,which are essential for inclusive and sustainable industrial development in line with the UN Sustainable Development Goals.All three organizations emphasize the transformative potential of green hydrogen,es

40、pecially for developing countries with vast renew-able energy resources,viewing it as a catalyst for low-carbon industrialization and job creation.However,the actualization of these economic benefits depend on factors like existing industrial capacity and accessibility to technology.Therefore,it is

41、pivotal to have further benefit-sharing mechanisms in place to safeguard a just tran-sition for the society as a whole.We still have our work cut out for us in making the energy transition a reality.Currently,no mature green hydro-gen market exists.However,the number of countries with national hydro

42、gen roadmaps has more than tripled over the past two years,showing that many countries are readying themselves to start using green hydrogen and are planning how best to benefit from the economic opportunities it will provide.An essential prerequisite to the global scale up of green hydrogen is the

43、development of the necessary policy and legal frameworks,and the coordination of international standards.Without regulatory clarity,green hydrogen projects are unable to move forward as they cannot plan or assess risk.This toolkit is the first to cover the entire green hydrogen value chain-including

44、 backward linkages,production and end-use-with a specific focus on developing countries.Developed under UNIDOs Global Programme for Hydrogen in Industry,which was launched in July 2021,it provides strategic guidance to maximize the local benefits of green hydrogen and includes concise policy sheets

45、that outline the options to achieve this.Going forward,this toolkit will serve as a valuable resource for developing countries that aim to embark on a pathway to industrialization fuelled by green hydrogen.It informs policymakers about the latest strategies,chal-lenges and solutions for creating a l

46、ocal value chain around green hydrogen production.Based on these insights,country-specific needs may subsequently be addressed through further cooperation and projects.By facilitating green hydrogen production in developing economies,UNIDO,IRENA and IDOS are propelling the clean energy revolution.We

47、 are supporting future industry leaders.We are caring for the workforce of tomorrow.We are striving for the just transition of industry:evolution from pollution to solution.We are working towards a sustainable future for all,driven by innovation.ForewordGerd MllerDirector General,UNIDOFrancesco La C

48、ameraDirector General,IRENAAnna-Katharina HornidgeDirector,IDOS|13Green hydrogen(GH2)is gaining significant attention within the global energy landscape.As a clean and renewable energy carrier,GH2 holds the potential to transform a number of sectors,spanning heavy industries to shipping and aviation

49、.Its benefits are far-reaching,ranging from the reduction of green-house gas emissions to reinforcing energy security and creating opportunities for green industrializa-tion.However,to fully unlock GH2s potential,an eq-uitable distribution of its benefits to all is indispen-sable.Against this backgr

50、ound,the report“GH2 for sustainable industrial development:A Policy Toolkit for Developing Countries”reframes the prevailing narrative by shifting its focus away from the role of developing countries as producers and exporters in the future hydrogen market to highlighting the sig-nificance of the hy

51、drogen value chain for developing countries themselves.GH2:Unveiling opportunities and addressing challenges GH2 possesses the potential to spark a transforma-tion that drives industrial development and fosters innovation,with potentially beneficial impacts on all three dimensions of sustainability:

52、economic(e.g.green industrialization,energy independence,in-creased participation in global trade and markets),environmental(e.g.accelerating decarbonization,in particular of hard-to-abate industries)and social(e.g.job creation,reliable energy access).The toolkit identifies seven primary economic ac

53、tivity clusters within the GH2 value chain:in addition to the primary activities of(1)renewable energy generation and electrolysis,(2)conversion into Power-to-X(PtX),and(3)GH2 export,(4)local upstream manufacturing of electrolysers and renewable energy equipment can offer substantial impetus to the

54、growth of the domes-tic GH2 industry.Similarly,(5)the decarbonization of domestic industries,(6)of transport,and(7)attract-ing foreign direct investment in energy-intensive in-dustries represent opportunities to generate sustain-able employment downstream,add long-term value and enhance internationa

55、l competitiveness.Despite the potential for growth and cross-sectoral benefits in the GH2 industry,a number of multifaceted challenges need to be addressed.These include cost impediments,political instability,weak regulatory frameworks,bureaucratic hurdles,and the lack of off-take agreements.Additio

56、nal challenges arise from uncertainties in international transport and concerns regarding the scale and dynamics of clean hydrogen trade,including the role of blue hydrogen as a tran-sitional technology.Hence,to successfully scale up GH2 production in developing countries,adaptations across several

57、dimensions will be necessary,includ-ing in infrastructure,regulatory frameworks,financial incentives and skills development.Concerted policy actions are imperative to harness opportunities and effectively navigate the many challenges.This report presents a comprehensive toolkit to guide strategic de

58、cision-making in this context.Navigating a just transition:A policy mission for equitable changeThe development of the GH2 value chain hinges on factors such as technological expertise,natural en-dowments,a supportive business environment,and past industrial development trajectories.Effective policy

59、 coordination plays a crucial role in laying the foundation for a robust localized GH2 value chain tailored to specific contextual factors.Policymakers must prioritize strategic interventions and instru-ments to achieve green industrial diversification,en-couraging both existing and emerging industr

60、ies to engage in the production of green goods and maxi-mize the benefits of GH2 production.Such diversifi-cation has the potential to create more job opportu-nities and enhance the export potential of high-value green goods compared to only producing and export-ing GH2.Countries that are unable to

61、generate signif-icant linkage effects should integrate GH2 trade with benefit-sharing mechanisms.This approach helps prevent the formation of export-driven energy en-claves within their borders and ensures a GH2 roll-out that is deeply embedded in and advocates for a just transition.A clover approac

62、h presented in the report outlines four key strategic considerations for the implemen-tation of GH2 production:(1)prioritizing local use before export(dual approach);(2)aligning with a just transition and other national goals(integrated Executive Summary14|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL D

63、EVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESapproach);(3)starting with smaller to medium-sized projects(gradual approach),and(4)sequentially im-plementing GH2 production and application(phased approach).By leveraging their comparative advantag-es and integrating GH2 into their overall vision

64、 and strategy,developing countries can promote sustain-able development,technological advancement,and the creation of jobs.In this context,the adoption of a comprehensive national hydrogen strategy focused on scaling up of domestic green hydrogen production through en-gagement in both upstream and d

65、ownstream activ-ities becomes a crucial step.This strategy provides clear policy direction for both project developers and investors.At the same time,it will only be effective when coupled with a robust regulatory framework to create a conducive environment for GH2 investment.Fostering inclusive tec

66、hnology advancement and sustainable energy generationAccess to technology plays a pivotal role in the pro-duction of GH2,particularly given that core technol-ogies such as solar PV cells,wind turbines,and elec-trolysers are predominantly manufactured in a few industrialized countries.One option is t

67、o implement local content requirements(LCRs)to bolster domes-tic manufacturing and leverage investments in long-term research and development to encourage local innovation and technology advancement.The caveat,however,is to prevent escalating project costs and to maintain healthy market competition.

68、Access to tech-nology facilitates access to energy,thus ensuring reli-able energy availability and energy security.The potential impact of large-scale GH2 production on agriculture and water and food security must not be overlooked and will require a delicate balance between competing demands for li

69、mited natural re-sources.Comprehensive environmental and social impact assessments are paramount in this context.Suggesting possible revenue-and benefit-sharing mechanisms,the report underscores the fundamen-tal role of social contracts in ensuring an equitable distribution of benefits.Stimulating m

70、arket creation and demand for green goodsGovernments have substantial influence in creating initial demand for green goods produced with GH2,such as green steel.By prioritizing green goods over traditional products in their public procurement ac-tivities,governments can boost demand,support GH2 prod

71、ucers and set a precedent for others to follow.This approach can complement direct subsidies for green goods produced with GH2,with government funding serving as a market shaper rather than a mere hand-out.Additionally,public procurement can consider the local content of goods,giving preference to t

72、hose with a higher share of domestically manu-factured components and local employment.Reliable certification measures are necessary to ensure added green value,i.e.low carbon emissions,of the goods manufactured with GH2,justifying the initial price gap to conventional products.Policymakers will als

73、o need to address market distortions,particularly those arising from fossil fuel subsidies that have an impact on the GH2 sector.To promote the use of GH2 in downstream industries,incentives such as price premiums and tax rebates can be introduced.Additionally,the implementation of quotas and target

74、s represents a viable mechanism to establish a baseline for GH2 use in specific market segments,ensuring the fulfilment of CO2 intensity objectives.Infrastructure,transport and storage solutions for GH2Formulating comprehensive,long-term strategies for the transport of GH2 with a focus on efficient

75、and standardized regulations that govern the planning,financing and safety will be key for enabling devel-oping countries to participate in international trade,particularly in the context of cross-border transport.This report discusses the most important questions policymakers must address when plan

76、ning GH2 infra-structure,ranging from the balance between privately owned infrastructure and open-access systems,the selection of domestic storage solutions and the stra-tegic location of electrolysers and storage facilities.It emphasizes the socioeconomic dimension of GH2 infrastructure development

77、 and the need to prioritize the resilience and livelihoods of local communities.Executive Summary|15|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2The report examines the feasibility and challenges associated with pipeline construction and maritime

78、 transport,exploring alternative energy carriers such as liquefied hydrogen(LH2),ammonia(NH3)and liq-uid organic hydrogen carriers(LOHCs)as potential solutions for long-distance trade.Moreover,the es-tablishment of storage facilities will be crucial for ensuring reliable GH2 supply,particularly in r

79、esponse to fluctuations in renewable energy generation.Se-curing investments for retrofitting existing natural gas networks and building new dedicated hydrogen infra-structure is essential.This can be achieved through various financing options,including public procure-ment,de-risking measures,public

80、-private partner-ships and regulated asset base models.Global partnerships,international collaboration and financing strategies for GH2The rapid scaling up of global green hydrogen pro-duction calls for multilateral cooperation in science,technology and innovation.International collabora-tion is cru

81、cial to facilitate research on the environ-mental impacts of hydrogen and to develop methods to mitigate hydrogen leakage.International orga-nizations,such as UNIDO,IRENA,IEA and the World Bank,amongst others,are pivotal contributors to re-search and knowledge dissemination in this context.Knowledge

82、 sharing is essential to bridge disparities in hydrogen know-how and foster well-informed de-cision-making among policymakers.To achieve the goals set forth in the Paris Agree-ment,a substantial increase in international climate financing is imperative,with a significant share ear-marked for GH2 pro

83、jects.Policymakers around the globe should aim to lower the cost of capital for GH2 projects,involving development finance institutions,and establishing a transparent and predictable reg-ulatory framework.UNIDO and the World Bank are mapping out financial support offered by develop-ment banks for hy

84、drogen projects.The development of international standards and certifications for hy-drogen emissions,safety and operations is crucial for fostering market growth.International organizations such as ISO and UNIDO are actively working towards formulating such standards,with a particular empha-sis on

85、ensuring the participation of developing coun-tries and active engagement in standard-setting pro-cesses.This entails developing technical capacity and harmonizing certification methodologies.International collaboration is essential for establish-ing early GH2 trade corridors.Such collaboratve ef-fo

86、rts are crucial for pooling resources,sharing knowl-edge,setting common standards and accelerating the development of hydrogen infrastructure,which can mitigate the risks of isolated efforts and fragmented initiatives.Moreover,adopting a unified approach to green financing and green product standard

87、s will bol-ster the bankability of GH2 projects.While reaching a global consensus on these unified approaches will be challenging,it is indispensable for realizing a GH2 roll-out that delivers benefits to both people and the planet.16|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TO

88、OLKIT FOR DEVELOPING COUNTRIESIn pursuit of their commitment to achieving the goals set forth in the Paris Declaration,countries and busi-nesses around the world are actively exploring sus-tainable and clean energy alternatives.Green hydro-gen(GH2),namely hydrogen derived from renewable energy sourc

89、es,is gaining widespread recognition as the preferred choice for a number of applications.1.1.Why green hydrogen?GH2 is being championed as the fuel of the future for being clean,storable and portable(IRENA,2020a).When combined with oxygen,hydrogen combusts to produce water and releases heat without

90、 emitting carbon dioxide(CO2).Due to hydrogens high energy density,it is ideal for fuelling energy-intensive indus-trial processes that are difficult to electrify and can furthermore be used as feedstock for a number of industrial applications.Moreover,as a clean energy carrier,GH2 can be stored for

91、 extended periods with minimal losses.Compared to grid-connected renewa-ble electricity,it can be more flexibly transported over large distances to applications farther afield from the renewable energy source.Blue hydrogen,which is produced with fossil fuel and carbon capture and storage(CCS),can se

92、rve as an initial catalyst for the hydrogen market during the energy transitions early stages.Greenhouse gas(GHG)emissions from existing facilities can thus be reduced while continuing to use current infrastruc-ture.Blue hydrogen comes with certain limitations,however:it relies on finite resources,i

93、s susceptible to fossil fuel price fluctuations,is tied to the costs and monitoring of CO2 transport and storage,and does not enhance energy security.Moreover,the efficiency of CCS is suboptimal as it is still associated with some residual CO2 emissions,and the use of methane in CCS may give rise to

94、 upstream leakage,rendering blue hy-drogen incompatible with net-zero emission goals.1.2.Identifying potential GH2 producersGH2 production is a viable option for countries en-dowed with abundant solar and wind power potential.The IEA(2023a)identifies many low-and middle-in-come countries in Africa,t

95、he Middle East,Southern Asia and the western regions of South America as the most promising sites for GH2 production due to their abundance of solar and wind energy.Most of these countries currently have very limited renewable en-ergy production capacity and substantial efforts will therefore be nec

96、essary to increase it and to decar-bonize their CO2-intensive electricity grid before en-tering into GH2 production.1.INTRODUCTION|17|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH21.3.Exploring GH2 applicationsGH2 will not replace the decarbonizati

97、on of the pow-er,transport,heating and cooling industries achieved through electrification from renewable energy sourc-es,but rather complement it.Figure 1.1.presents ap-plications where GH2 and its derivatives provide a distinct comparative advantage,namely:Hard-to-abate industries.Heavy industry c

98、urrently uses hydrogen derived from fossil fuels,particular-ly in oil refinement and the production of ammonia,methanol and steel.Using GH2 as a high-grade heat fuel can contribute to the decarbonization of these and other hard-to-abate industries.In addition,it can serve as feedstock for a number o

99、f industrial applications.Aviation and maritime transport.Hard-to-abate transport industries,such as shipping and aviation,are difficult to decarbonize due to the limited availa-bility of low-carbon fuel alternatives.Energy.As an efficient energy carrier with long-term storage capabilities without s

100、ignificant losses,hy-drogen can play a pivotal role in stabilizing energy grids that rely on solar and wind power.By mitigating the fluctuations inherent in these renewable energy sources,hydrogen can help ensure a consistent and reliable supply of electricity.Cost competitiveness and infrastructure

101、 availabili-ty will be key determining factors in the adoption of additional hydrogen applications.For example,the use of hydrogen fuel cell vehicles and trucks will be contingent on fuel cell costs and the availability of refuelling stations.Hydrogen can be integrated into existing natural gas netw

102、orks and used in district heating systems or in hydrogen boilers and fuel cells for residential heating systems.Ammonia,on the oth-er hand,has the potential of enhancing power system flexibility when used in gas turbines or can contribute to emissions reductions of coal-fired power plants.Figure 1.1

103、.Policy priorities for GH2 applicationsSource:IRENA,2022aNote:The end uses are located on the x-axis according to estimated average daily hydrogen demand for industry,refuelling stations and combustion devices with a power relationship.The end uses are located on the y-axis according to the differen

104、ces between the technological readiness levels of hydrogen-based vs electricity-based solutions.This is not a static picture and priorities may change over time depending on advances in technologies.18|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIES1.4

105、.Global demand and the hydrogen industrys future outlookIn 2022,about 95 million tonnes(Mt)of hydrogen were produced globally,with the majority generated through processes that rely on fossil fuels such as natural gas and coal,also known as“grey hydrogen”.Grey hydrogen was primarily used in industri

106、al ap-plications such as crude oil refining,ammonia pro-duction and methanol synthesis,which collectively account for nearly 93 per cent of total hydrogen con-sumption(IEA,2023a).According to the International Renewable Ener-gy Agency(IRENA,2023c),GH2 is expected to play a significant role in the en

107、ergy transition towards the 1.5C climate goal by 2050.IRENAs World Energy Tran-sitions Outlook 2023 projects a substantial increase in global GH2 production,reaching approximately 492 million tonnes by 2050.As part of the transition strategy,however,some residual blue hydrogen pro-duction,totalling

108、around 31.5 million tonnes,will be inevitable(IRENA,2023c).1.5.A price forecast for GH2Significant reductions in the costs of GH2 production will be necessary to unlock its full potential.Its pro-duction costs are currently 3 to 6 times higher than for grey hydrogen(USD 3-6/kg vs USD 1-2/kg),even in

109、 the most favourable production sites.One major cost factor is the renewable electricity required to power electrolysers.GH2 produced in locations with abun-dant renewable resources can enhance its cost com-petitiveness.The cost compression of solar photovol-taic(PV)and wind technologies will also c

110、ontribute to lowering the costs associated with GH2 production.Another priority is lowering the cost of electrolysers,which could potentially lead to an 80 per cent reduc-tion in investment costs in the long term.Among oth-ers,this could be realized by increasing the size of electrolysis plants to a

111、chieve economies of scale;au-tomating manufacturing to improve efficiency;opti-mizing material sourcing to reduce reliance on scarce materials such as iridium and platinum;enhancing durability;improving operational efficiency and flex-ibility;customizing electrolysis systems for specific industrial

112、uses,and leveraging learning rates to drive down costs.IntroductionFigure 1.2.Hydrogen cost forecasts Source:IRENA,2020aNote:“Today”captures best and average conditions.“Average”signifies an investment of USD 770/kilowatt(kW),efficiency of 65%(lower heating value-LHV),an electricity price of USD 53/

113、MWh,full load hours of 3200(onshore wind),and a weighted average cost of capital(WACC)of 10%(relatively high risk).“Best”signifies investment of USD 130/kW,efficiency of 76%(LHV),electricity price of USD 20/MWh,full load hours of 4200(onshore wind),and a WACC of 6%(similar to renewable electricity t

114、oday).Based on IRENA analysis|19|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH21.6.What are the prospects for renewable-rich developing countries?GH2 production provides countries with abundant renewable energy resources the opportunity to strength

115、en their energy security and to reduce their vulnerability to external shocks.They will have the possibility to participate in the global hydrogen mar-ket,which is projected to account for around 25 per cent of total hydrogen demand by 2050.According to IRENAs 1.5C scenario(2022b),around 55 per cent

116、 of internationally traded hydrogen will be transported through pipelines.GH2 production in renewable-rich will open up new avenues for achieving net-zero in-dustrial development and creating local value addi-tion,leading to job creation,skills upgrading,invest-ment mobilization and wealth generatio

117、n.In short,engaging in GH2 production has the potential of rein-forcing developing countries overall economic resil-ience and facilitating the development of diversified and knowledge-based economies.1.7.Overcoming the challenges of technological barriers and high production costs Countries face sev

118、eral obstacles to fully leverage GH2s potential.The biggest challenges include the necessary technological know-how to produce GH2,the scaling up of renewable energy generation and electrolyser capacities,the high production costs,lack of domestic markets and limited infrastructure.Targeted policies

119、 and collaborative efforts are there-fore necessary to successfully address these barriers to GH2 production.Moreover,demand for and the supply of GH2 will have to be simultaneously promot-ed.Policymakers have a crucial role to play in driving innovation,attracting private sector investment,and in f

120、orging partnerships to effectively integrate hydro-gen into their countrys energy mix.1.8.Harnessing the transformative potential of GH2Governments,international organizations and private enterprises around the globe have launched ambi-tious initiatives and policies to support the develop-ment and u

121、se of GH2.These efforts entail strategies to promote research and development(R&D),facilitate infrastructure development,and to create supportive regulatory frameworks for the widespread adoption of GH2 technologies.While Japan was the first country to develop a national hydrogen strategy(NHS)in 201

122、7,over 45 countriesprimarily developed countries in Europehave since published NHS as well.Develop-ing countries are rapidly catching up,with around 40 per cent of currently published NHS attributed to this country group.However,as of October 2023,no tran-sition economy or least developed country(LD

123、C)had published a NHS(Figure 1.3)This report explores various facets of policymaking from the perspective of renewable-rich developing countries to promote the development and adoption of GH2 as a sustainable energy option.It address-es what can be described as the“hydrogen dead-lock”which entails f

124、our key components:(i)supply,(ii)demand,(iii)infrastructure,and(iv)internation-al context/coordination.There is a clear need for comprehensive policies and strategies in develop-ing countries to create and sustain demand for GH2.Policies that have been implemented in the past to promote renewable en

125、ergy efficiency and the manu-facturing of green goods can be adapted to factor in GH2;by focusing on market creation and leveraging existing policy frameworks,policymakers can foster GH2s growth as a viable energy solution.The report provides guidance for effective policymak-ing along the GH2 value

126、chain.While existing litera-ture comprehensively reviews policies for increasing renewable energy generation,this report focuses on other important areas such as the production of GH2,its transformation,GH2 transport infrastructure and the creation of domestic demand for GH2.In addition,it highlight

127、s international cooperation as a crucial factor for supporting national policymaking efforts.The report concludes with policy sheets that offer concise guidance for policy design at every stage of the GH2 value chain.|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOP

128、ING COUNTRIES20|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESFigure 1.3.Cumulative number of NHS by UN country classification and year of first publicationFigure 1.4.GH2 value chain linkagesIntroduction|21|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DE

129、VELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESChapter 2 reframes the current hydrogen discourse away from“producing for export”by shedding light on the value creation prospects for hydrogen-pro-du

130、cing countries.That is,countries should not ex-clusively rely on GH2 exports considering the high technological and systemic uncertainties these en-tail,but should instead pursue the development and implementation of a gradual,phased and integrat-ed GH2 strategy.This requires the establishment of a

131、domestic hydrogen market to decarbonize existing industries and plans to export any surplus GH2.Gov-ernments should prioritize attracting investments in energy-intensive steel or base chemicals with the aim of gradually moving into downstream industries that use green steel or chemical feedstock,and

132、 integrate into upstream industries that produce renewable power generators and electrolysers.Such a long-term vision calls for restructuring and aligning the coun-trys energy,infrastructure,trade and industrial strat-egies and policies with one another.Chapter 3 explores GH2 production in more dept

133、h with a focus on GH2s backward linkages,its pro-ductions core activities and their connections to upstream industries.The chapter provides valuable insights into strategies for attracting renewable en-ergy investments for GH2 production,which requires reliable electricity supply for electrolysers,a

134、nd ad-dresses concerns related to technology acquisition,risk mitigation and the local manufacturing of GH2 hardware.Additionally,policy measures that can fa-cilitate the widespread deployment of electrolysers and renewable energy sources are discussed.The so-cioeconomic dimension of GH2 production

135、projects is raised as well,highlighting the importance of ef-fective policymaking in regulating and governing wa-ter and land resources.Chapter 4 focuses on the role of industrial policy in facilitating the development of a domestic hydro-gen market.It introduces a range of targeted policies designe

136、d to stimulate domestic GH2 demand and to promote its integration in the value chain.The chap-ter emphasizes the need for comprehensive regu-lations,early mover support,demand generation mechanisms,and effective strategies for value chain coordination.It also discusses the pivotal role local market

137、creation plays in driving the adoption and use of GH2 as a clean energy solution.In Chapter 5,a comprehensive analysis of current technologies and associated challenges is presented,with a focus on the intricate planning required for the development of hydrogen grids and infrastructure.Additionally,

138、it reviews the necessary policies to bol-ster this crucial segment of the GH2 value chain.Chapter 6 focuses on the importance of promoting collaboration between governments,industry stake-holders and academia to effectively navigate the complexities of the GH2 industry and how to capitalize on the o

139、pportunities it presents.It explores different strategies including co-financing policy frameworks,knowledge sharing initiatives,intergovernmental agreements,financing support,optimal import-ex-port coordination and green product trade policies.By aligning a range of policies with one another,mo-bil

140、izing resources and by embracing innovation,the production and adoption of GH2 can be significant-ly accelerated,unlocking a future that is powered by clean and sustainable energy.The report concludes with concise policy sheets that offer pragmatic guidance for policymakers.They sum-marize areas for

141、 policy intervention,including the un-derlying objectives of such interventions,key actions,potential tools,actor involvement and connections with other policies.These recommendations provide a clear policy direction for promoting project inception,developing a NHS,establishing regulatory standards

142、and creating a conducive business environment.The concluding chapter also emphasizes the importance of supporting early movers by facilitating access to resources and promoting entrepreneurial activities.Additionally,it outlines mechanisms for stimulating commercial demand for GH2,implementing certi

143、fi-cations and seamless value chain integration.Final-ly,it highlights knowledge co-creation and exchange through targeted educational initiatives,knowledge sharing platforms and digital government resources.|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNT

144、RIES22|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESThe current global discourse on GH2 mostly reflects the perspective of the Global North.The mission-ori-ented policymaking of early movers through support-ive(e.g.the U.S.Inflation Reduction Act)and

145、 mandat-ing(e.g.the EUs Delegated Acts)industrial policies has significantly influenced the GH2 markets growth in developing and emerging economies.Major import hubs,especially Germany,Japan and the Republic of Korea,have established numerous partnerships with developing countries,reflecting the imp

146、ortant role they play in international GH2 trade.This message has resonated more clearly in recent years:while the ma-jority of NHS prior to 2022 had been published in the Global North,an increasing number of countries from the Global South have joined the ranks of economies planning to produce and

147、use GH2(see Figure 2.1.).2.The GH2 industry:reframing the narrativeFigure 2.1.Publication of NHS by year of publication and region|23|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOL

148、KIT FOR DEVELOPING COUNTRIESThis report takes the perspective of countries in the Global South on GH2 development and shifts the emphasis of the current narrative from“the rele-vance of developing countries in the future GH2 mar-ket”to“the relevance of the future GH2 market for developing countries”

149、.The exclusive focus on GH2 as a developing country export has raised concerns about the fair distribu-tion of GH2s benefits,sparking increasing resistance within local communities in these countries.This re-port thus delves deeper into the potential advantag-es of GH2 production for developing coun

150、tries,and explores strategies to navigate and mitigate the risks involved in this transformative venture.2.1.Envisioning the role of GH2 in developing countriesSince the publication of Japans NHS in 2017,over 45 countriesincluding around 40 per cent from the Global Southhave followed suit by releasi

151、ng their own strategies,roadmaps and action plans to devel-op and use GH2.Although these plans differ in terms of targets and measures,they address similar issues that arise in relation to the creation of a sustainable GH2 market,such as the drivers of GH2 production;the goals for domestic use and i

152、nternational trade;sustainability and inclusive participation,and the need to overhaul the current socioeconomic system.We have identified ten key insights based on an anal-ysis of these documents:1.Countries invest in GH2 for various reasons:par-ticipation in the international trade of GH2 and its

153、derivatives;decarbonization of the economy;energy supply security and diversification;accel-eration of innovation and industrial growth,and social and environmental(co-)benefits.2.GH2 production.Countries are leveraging their local conditions and natural factor endowments.While most countries priori

154、tize the development of hydrogen from renewable energy sources such as solar and wind through electrolysis,they are also exploring other clean production methods.3.Some countries are focusing on developing their domestic market before engaging in GH2 trade.Several countries have already identified s

155、pe-cific“no-regret”applications that can be easily adapted to GH2,such as ammonia production for fertilizers,methanol as feedstock and synthetic fuels for maritime transport.Other NHS prioritize exports,foreign direct investment(FDI)and the implementation of large-scale hydrogen projects.4.GH2 foste

156、rs industrial development and innova-tion.While the decarbonization of hard-to-abate industries features prominently in many NHS,countries also emphasize the potential of creat-ing new sustainable industries such as fertilizer and steel,and gaining a competitive advantage or even assuming leadership

157、 in hydrogen tech-nologies,including electrolysers and fuel cells.5.Most countries prioritize a gradual and se-quenced approach to GH2 production and use.They start with small-to medium-scale projects on both the supply and demand side.6.The development of GH2 calls for a compre-hensive overhaul of

158、the socioeconomic system.Countries recognize that the technological nov-elty and capital-intense nature of GH2s value chain necessitate coordinated policymaking across various policy areas,including educa-tion and training,infrastructure,and industrial and structural policies aimed at facilitating a

159、 fair and sustainable expansion of the domestic market.Some NHS also outline financial sup-port mechanisms.7.Countries recognize the potential risks associ-ated with GH2 production for the environment and society.Some countries emphasize a bal-anced use of land and water resources,while others promo

160、te a circular economy and a rein-vestment of revenues from the GH2 value chain into local communities.8.Stakeholder and civil society engagement play a crucial role in increasing acceptance of GH2 technologies.Inter-ministerial working groups that include civil society,private and public stakeholder

161、s are being established and technical roundtables organized that involve enterprises,industry associations,universities and research institutions to promote acceptance of new GH2 technologies.Additionally,advisory boards that include public policy and climate action experts have been created,and reg

162、ular consultations with industry and affected communities are being conducted.National hydrogen councils and associations serve as focal points for GH2 strategy development.9.Bold policy actions are needed in the short term to ensure successful market ramp-up for GH2.While the market economy plays a

163、 pivotal role,exclusive reliance on the market alone does not 24|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESsuffice given countries ambitious decarboni-zation targets and the coordination challenges.NHS typically focus on mid-to long-term goals(203

164、0,2040 and 2050),but also include updates and action plans for the short term to continu-ously adapt to the dynamic nature of technology and market trends.10.Hydrogen trade objectives are often linked to international collaboration.The majority of NHS highlight countries potential role in future in-

165、ternational hydrogen trade,including imports,exports and achieving self-sufficiency.Some country strategies identify specific regions for promoting trade partnerships.International co-operation plays a crucial role in targeted actions such as knowledge exchange,technology transfer,collaboration in h

166、ydrogen technology R&D and in international standard-setting.While many NHS emphasize international collaboration,region-al partnerships are not always given the same prominence,despite their relevance in ramping up the hydrogen market at the global scale.The GH2 industry:reframing the narrativeTabl

167、e 2.1.Topics mentioned in NHSAspectsMeasures/areas mentionedCountry examplesKey driversParticipate in international trade of hydrogen and its derivativesUruguay,NamibiaDecarbonize the economyChile,TrkiyeStrengthen energy securityChina,IndiaDiversify energy supplyGermanyInnovation and industrial deve

168、lopmentNamibia,UruguayEnvironmental and social(co-)benefitsChile,South AfricaIdentification of“no-regret”areasAmmonia production for fertilizersTrkiye,KenyaMethanol production as feedstockUruguaySteel productionSouth AfricaMaritime shippingChileQuality infrastructureSafety standardsChile,ChinaRegula

169、tion of hydrogen storageIndiaAdoption of international technical standards for hydrogen ColumbiaFinancial support mechanismsDirect incentives,extension of subsidies,fee waivers,grantsIndia Environmental sustainabilityBalanced use of land and water resources,circular economyChileParticipation Nationa

170、l GH2 advisory group comprising experts from academic and research institutions,industry and civil societyIndia Time frameDevelopment of GH2 use until 2035,projected in three waves;update of NHS every three years ChileInternational collaborationInternational cooperationChina Regional cooperationUrug

171、uay|25|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH22.2.Unravelling the benefits and barriers of GH2 tradeAs already briefly mentioned above,there are several compelling reasons why renewables-rich developing countries should actively participate

172、in GH2 produc-tion and trade:1.The global effort to decarbonize hard-to-abate industries that cannot be easily electrified is re-liant on the involvement of developing countries with abundant renewable resources.Internation-al hydrogen trade can support the decarbon-ization efforts in both exporting

173、 and importing countries.2.Export revenues enhance the trade balance and facilitate access to foreign currencies.The pro-jected interregional trade of GH2 in 2050,estimat-ed at USD 280 billion,is anticipated to generate over half of its economic activity from developing countries(Deloitte,2023).This

174、 burgeoning trade has the potential to trigger a cascading effect on economic development,fostering local activities and job creation.3.Hydrogen trade empowers countries within a democratically structured global energy land-scape,providing producing countries increased autonomy,strengthening their e

175、conomic net-works and elevating their political significance.Additionally,it offers fossil-fuel exporting coun-tries the opportunity to retain some of their ex-port revenues and maintain political influence(IRENA,2022e).4.GH2 exports can facilitate domestic energy tran-sitions by integrating renewab

176、le energy into the national energy grid.Such integration not only drives down the cost of renewable energy in the country of production,but also improves energy access and affordability for the local population.5.The trade of GH2 and its derivatives can prevent stranded assets in both exporting and

177、importing countries.By supporting the local decarboniza-tion of industries in the exporting country,GH2 exports can help avoid the implementation of conventional,fossil-based projects that could be-come stranded assets in the future.The technical components of the coal-based blast furnace-ba-sic oxy

178、gen furnace(BF-BOF)in steel production,for example,have lifetimes of between 40 years and 60 years,exposing them to carbon lock-in and stranded asset risk by 2040(Agora Industry and Wuppertal Institute,2023).The production of GH2 may not be cost-competitive in the import-ing country in the long term

179、 due to the countrys scarcity of renewables.Therefore,importing GH2 or green intermediates such as direct reduced iron(DRI)can help prevent reliance on costlier and less sustainable alternatives.6.International GH2 trade can facilitate knowledge transfer and spillovers,thereby accelerating socioecon

180、omic development in GH2 exporting countries.GH2 trade is creating a new global di-vision of labour and is generating jobs and value in regions with abundant renewable resources.While certain key technologies such as electro-lysers are likely to be supplied by regions with limited renewable energy so

181、urces(Verpoort et al.,2023),the overall expansion of technological capabilities and industrial capacities will bolster domestic research,development and innovation in GH2 exporting countries.To accelerate the global growth of the hydrogen mar-ket,hydrogen partnerships have been established between p

182、otential exporting and importing countries(see Box 2.1).Yet,despite the ambitious goals associated with the GH2 market,its growth has been slow.In 2022,less than 100 kilotons of hydrogen from electrolysis were produced,falling far short of the expected demand by 2050(IEA,2023a).If all the announced

183、electrolysis projectsincluding those at very early stages of de-velopmentare realized,GH2 production could reach around 27 Mt by 2030.Latin America,particularly Chile,Brazil and Argentina,could account for nearly 6 Mt of production,while African countries,including Kenya,Mauritania,Morocco,Namibia a

184、nd South Afri-ca,could produce about 2 Mt by 2030(IEA,2023a).The majority of GH2 projects are still in their infancy,with only a few projects currently underway(see Table 2.2).This is particularly true for export-oriented projects,where less than 25 per cent of planned projects un-til 2030 have reac

185、hed the feasibility stage.Moreover,two-thirds of the projected export capacities still lack potential buyers,and only a few projects have signed binding off-take agreements(IEA 2023a).Cost challenges pose a significant obstacle to the rapid development of GH2 projects in developing countries.The hig

186、h capital costs associated with re-newable energy and the expansion of electrolysis,coupled with risks related to political stability,reg-ulatory frameworks and bureaucratic procedures such as licensing and land acquisition,undermine the bankability of projects and prevent their timely implementatio

187、n,especially in developing countries.Demand-side stakeholders often adopt a cautious“wait and see”approach,resulting in a lack of off-take agreements.26|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESThe international transport of GH2 is still fraught

188、with technological and regulatory uncertainties,which impedes its cost-effective transport in line with technical and environmental standards(see Chapter 5).Maritime transport of hydrogen(including conver-sion and re-conversion)can raise the landed costs of hydrogen significantly,placing countries l

189、ocated out-side the pipeline distance from major import hubs at a comparative disadvantage.The scale and dynamics of GH2 hydrogen trade re-main uncertain.According to IRENAs(2022b)1.5C scenario,around 25 per cent of hydrogen production could be internationally traded by 2050,with about half transpor

190、ted through pipelines.Importing coun-tries,driven by energy diversification and security concerns,are increasingly pursuing self-sufficiency and friend-/neighbour-shoring.Recent reports high-light,for example,the considerable renewable ener-gy potential and GH2 production within Europes bor-ders(e.g

191、.Quitzow et al.,2023).Policy frameworks that harness GH2s domestic potential in industrialized economies may discourage investment in developing countries that lack comparable subsidy schemes.Blue hydrogen,which serves as a transitional technol-ogy,could extend the timeline of GH2 adoption.Major imp

192、orting countries such as Germany are increasingly considering the use of blue hydrogen as a transition technology.While blue hydrogen may accelerate GH2 use and facilitate the transition to a GH2 future in the medium term,it is not fully emission-free and carries the risk of“lock-in”.In the short te

193、rm,GH2 export-ers,especially those relying on maritime transport for The GH2 industry:reframing the narrativeBox 2.1.Global Hydrogen Partnership NetworkDemand for GH2 is particularly high in Ger-many,Japan and the Republic of Korea.These economies have actively forged hy-drogen partnerships with pot

194、ential export-ing countries.Germany has signed Mem-orandums of Understanding(MoU)with countries in sub-Saharan Africa(e.g.South Africa,Namibia),Latin America(e.g.Chile),the MENA region(e.g.Morocco,Saudi Ara-bia,Egypt and the United Arab Emirates).On the other hand,Japan and the Repub-lic of Korea ar

195、e focusing on Oceania,South America and North Africa to find suitable partners.On the export side,Australia,In-dia,the United Arab Emirates(UAE),Saudi Arabia,Chile and the Russian Federation have also established a robust network with other countries.Even countries that will not necessarily rely hea

196、vily on GH2 trade in the future,such as the United States,the United Kingdom,France and China,have entered into partnerships.Source:Analysis based on data from the World Energy Council Germany(2023),World Energy Council(2022,p.7),and own researchNote:Green shades refer to(slightly and strongly)expor

197、t-oriented countries,blue shades to(slightly/strongly)import-orient-ed countries,while light red colour indicates a neutral or rather self-sufficient position of countries.Figure 2.2.Visualization of the global hydrogen partnership network|27|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A P

198、OLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2international trade,may find it difficult to compete with the price of blue hydrogen.This might represent challenges for developing countries that are heavily reliant on GH2 exports,potentially jeopardizing the viability of GH2 initiatives in these countries,

199、failed GH2 projects could lead to political frustration and societal backlash against further decarbonization projects,consequently delaying the overall green industrial transformation in these countries.Estab-lishing a strong business case within these countries economies is therefore crucial.This

200、will enhance their resilience in anticipation of a global market expan-sion which at present remains uncertain.28|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESThe GH2 industry:reframing the narrativeTable 2.2.GH2 projects at advanced stages of develo

201、pment.(Source:IEA,2023b)ProjectCountry StatusEnd UseDescription Helios Green Fuels NEOMSaudi ArabiaFID AmmoniaThe Neom Green Hydrogen Company,a joint venture between ACWA Power,Air Products and NEOM recently achieved financial close on 22 May 2023,with a total investment value of USD 8.4 billion.The

202、 worlds largest GH2 plant will be located in Neom and is projected to generate up to 600 tonnes per day of green ammonia for export from 4GW of solar and wind energy by the end of 2026.An exclusive 30-year off-take agreement has been concluded with Air Products.Over two-thirds of the investment valu

203、e are financed from 23 local,regional and international banks and financial institutions.Masdar City Green FalconUnited Arab EmiratesFIDSynfuelsTotalEnergies,Masdar,Siemens Energy and other companies are collaborating to establish a demonstrator plant in Masdar City to produce sustainable aviation f

204、uel(SAF)from GH2.The demonstration project should pave the way to commercial production of SAF.Cleanenergy Solutions NamibiaNAMFIDMobilityThe Ohlthaver&List(O&L)Group and CMB.TECH launched the Cleanenergy Solutions Namibia joint venture to construct Namibias first GH2 production plant in February 20

205、22.The demonstration plant is based in the Erongo region and is expected to become operational by the end of 2023 and produce green ammonia as transport fuel.It is to be followed by a 10-hectare solar park,equipped with a 5 MW electrolyser.Environmental studies have been carried out,and the funding

206、has been approved by the government.OCP green ammoniaMoroccoUnder constructionAmmoniaMoroccos OCP,one of the worlds largest phosphates and fertilizer companies(and an importer of ammonia)is currently developing a green ammonia demonstration plant jointly with Green Energy Park(GEP)and Fraunhofer IGB

207、.The demonstration plant has a capacity of four tons a day which is used for testing electrolyser technologies and ammonia synthesis in a realistic intermittent operation and on an industrial scale.Unigel,phase IBRAUnder constructionAmmoniaBrazils largest fertilizer producer Unigel launched the coun

208、trys first industrial-scale green hydrogen and ammonia project in Camaari,Bahia province.60,000 tonnes of ammonia are to be produced from 60 MW of grid-connected renewable energy(RE)per year,using Thyssenkrupp nucera electrolysers.Operational by 2023,it will quadruple production during the second ph

209、ase up to 2025.Haru Oni,phase IChileOperationalMethanol,synfuelsSiemens Energy,Porsche,Enel,ExxonMobil,Enap and others have built the worlds first integrated industrial-scale plant for synthetic fuels in Patagonia.Large-scale production was planned to start in April 2023.Two wind turbines at Haru On

210、i can create the same amount of e-fuel as around six wind turbines in Germany.The facility is expected to produce up to 550 million litres of e-fuel in coming years.Sinopec KuqaChinaOperationalRefining,transportSinopec Xinjiang Kuqa GH2 pilot project entered operation in July 2023.The solar-to-hydro

211、gen project produces up to 20,000 tonnes per year of GH2,along with the capacity to store 210,000 m of hydrogen(H2)and transport 28,000 m of H2 per hour.With a focus on hydrogen transport and green hydrogen refining,Sinopec also installed over 100 hydrogen refuelling stations to accelerate GH2 devel

212、opment.|29|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH22.3.The potential of GH2 to transform industrial development The shift in the prevailing narrative highlights the sig-nificance of GH2 production for developing countries,emphasizing the econ

213、omic opportunities it presents throughout the value chain(see Fig.2.3).By engaging in both upstream and downstream activities of GH2 production,developing countries can generate sus-tainable employment;add long-term value;enhance their international competitiveness,and mitigate risks associated with

214、 participation in global hydrogen trade.The hydrogen value chain comprises seven primary activity clusters or windows of opportunity(Stamm et al.,2023),which can be pursued simultaneously or in any preferred sequence.1.Renewable energy generation and electrolysis.GH2 production requires initial inve

215、stments in renewa-ble energy sources such as solar and wind farms and in geothermal and hydroelectric installations,which are contingent on regional resource endowments.Electric grids need to be developed,electrolysers installed and pipelines and tanks for water and hydrogen transportation establish

216、ed.Water-scarce regions may also need to build and operate desali-nation plants.These activities are capital-intensive and often require large-scale production,making it challenging for newcomers to enter the market.In most developing countries,foreign investment and imported technologies are likely

217、 to dominate these activities.However,significant employment opportunities could arise during the construction phase,while job creation in operations and main-tenance(O&M)may remain limited.Technologically advanced countries can develop indigenous capa-bilities and capture value locally in services(

218、e.g.construction and project development)as well as in manufacturing(e.g.steel tubes for wind turbines and solar panels).2.Conversion into Power-to-X(PtX).The transport and storage of hydrogen is costly,as it requires storage at either extremely high pressures or extremely low temperatures.The comme

219、rcially viable alternative is to convert hydrogen into derivatives,such as am-monia,methanol or synthetic fuels,which are eas-ier to store and transport.The choice of derivative depends on the specific end use(e.g.ammonia for fertilizer production and e-kerosene as aviation fuel)and transportation r

220、equirements.Producing sustainable fuels from GH2 in combination with an organic carbon source,such as dedicated energy crops or agricultural residues,creates a link be-tween the energy and agriculture sectors and can thereby generate further employment opportuni-ties(WWF et al.,2019).3.Export of GH2

221、 and PtX.Exporting hydrogen and its derivatives presents a significant opportunity for countries to enhance their foreign exchange earn-ings and generate tax revenues.By tapping into in-ternational energy markets,countries can attract foreign investment that exceeds the amount need-ed to decarbonize

222、 their local industry and trans-port sector.Exporting countries mode of transport varies depending on their proximity to major im-port markets:those in close proximity can export hydrogen through pipelines,while those located beyond the 3,000 km pipeline distance have to rely on maritime shipping as

223、 their only option.In that case,jumpstarting the export economy with PtX,such as ammonia or methanol,will likely be a more cost-effective choice compared to molecular hydro-gen,as the transport of GH2 in the form of liquid hydrogen or liquid organic hydrogen carriers(LOHC)significantly increases the

224、 total costs.The choice of exported commodities has a direct impact on the potential for local economic spillovers.4.Manufacturing of renewable energy equipment.The core activities around green hydrogen produc-tion involve backward linkages to upstream suppli-ers of clean energy technologies,for exa

225、mple so-lar PV(e.g.solar cells,modules,and steel frames);wind energy(e.g.towers,blades and gearboxes);geothermal(e.g.turbines,pumps,condensers);and electrolysers(e.g.electrodes,electrolyte materials,membranes and stacks).Moreover,energy projects require storage solutions.Yet the supply market for bo

226、th wind and solar energy has high barriers to en-try:the solar PV wafer manufacturing capacity,for example is highly concentrated in China,which ac-counted for 97 per cent of global capacity in 2021.The remaining capacity is mainly located in the Asia-Pacific region(the Republic of Korea,Malaysia,Vi

227、et Nam and Thailand)(IEA,2022a).Although mar-ket dispersion of wind energy is higher,China leads in wind turbine manufacturing,followed by Europe,the United States,India and Latin America(GWEC,2021).The production of renewable energy technol-ogies has a major impact on employment:Chinas solar PV val

228、ue chain alone accounted for 1.6 million jobs in 2021,surpassing employment in construc-tion and installation(1 million),and in the opera-tion and maintenance of solar plants(0.8 million)(IRENA and ILO,2022).|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNT

229、RIES30|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIES5.Decarbonization of domestic industries.Many local industries such as the chemical,iron and steel,ce-ment,aviation,maritime and heavy cargo transport industries,can benefit from reengineering their

230、 operations by using GH2.Incentives to use GH2 in these hard-to-abate industrieseither as feed-stock or as an energy sourceare buttressed by na-tional decarbonization goals,corporate standards enforced by leading enterprises in global supply chains,and international trade regulations such as the EUs

231、 Carbon Border Adjustment Mechanism(CBAM).A shift towards GH2 is particularly relevant for economies with robust heavy industries,espe-cially if they export to markets with high decar-bonization standards.Additionally,countries with a significant mining sector can greatly reduce their carbon footpri

232、nt by adopting GH2 to align their en-ergy-intensive operations and exports to markets with stringent decarbonization requirements.Forward linkagesBackward linkagesDownstreamUpstreamMfr.of renewable energytechnologiesRenewableenergy generation and electrolysisBladesGeneratorsTowersInvertersBatterystr

233、ogatePanels/modulesTurbinesGeneratorsPumpsConversioninto PtXCO2PtXSyntheticfuelsMethanolAmmoniaLOHCN2SynthesisTransformationExport ofGH2 and PtX3StoragePipelineShipExportRail/Road4Decarbonization ofdomestic industries5Decarbonizationof transport6FDI in energy-intensiveindustries72Renewable energyDed

234、icated REElectricitygridElectrolysisRE productionTransmissionGH2 ProductionGH21SteelBuildingsFertilizerPlasticsElectricityHeavy&long-haultransportChemicalRefineriesINDUSTRYTRANSPORTENERGYGH2End use in downstream sectorsPtXCementGlassCeramicsFigure 2.3.Activity clusters along the GH2 value chainThe G

235、H2 industry:reframing the narrative|31|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIES6.Decarbonization of transport.Transport is a major contributor to

236、GHG emissions in many low-and lower middle-income countries,even surpassing industrial emissions.While battery-electric tech-nology is the future for light vehicles,other seg-ments such as long-range buses and heavy cargo transport may benefit from fuel cells or hydrogen internal combustion engines

237、as potential alterna-tives.However,the transition from diesel to low-or zero-emission vehicles requires costly adjustments in the existing bus and truck industries.Despite these challenges,there are viable pathways to align decarbonization efforts with local economic value.Countries with large marke

238、ts and diversified indus-tries have a competitive advantage in developing low-carbon transport technologies as,for example in the case of urban rail technologies in China and India,and fuel-cell mining haul trucks in Chile and South Africa.Another viable pathway,which may also be suitable for smalle

239、r economies,is retrofit-ting traditional vehicles such as diesel buses with low-carbon engines(e.g.battery-electric,fuel cell or direct combustion).7.Attracting FDI in energy-intensive industries renewables pull.Many industries are aiming to decarbonize their global value chains over the next two de

240、cades.In countries with limited renewable energy and GH2 resources,there is a growing incentive to import energy-intensive parts and components such as aluminium,carbon-fibre parts,green steel and energy-intensive chemicals from countries with abundant renewable low-car-bon energy sources.As pressur

241、e to decarbonize material consumption increases,as carbon prices rise and renewable energy and GH2 capacity are ramped up,relocations of energy-intensive processes are expected to rise significantly.This presents a promising opportunity for developing countries to embrace green industrialization and

242、 further advance their sustainability goals.Box 2.2.The renewables pull effectThe“renewables pull”effect refers to the attraction of energy-intensive industries and investment in new industrial capacity in countries or regions with abundant renewable energy resources.This can lead to increased deplo

243、yment of renewable energy,job creation and value added in these countries(Gielen et al.,2020).Industries that are likely to benefit from(at least partial)relocation in the future include steel and chemicals,as the long-distance transport of intermediate(e.g.DRI,ammonia,basic hydrocarbons)and(semi-)f

244、inished goods(e.g.steel,cast iron,urea,ethylene)to these industries will be cheaper than the costs of hydrogen transport.Verpoort et al.(2023)estimate relocation savings of around 20 per cent for imported steel and 50 per cent for urea and ethylene when there is a signifi-cant electricity price diff

245、erence of EUR 50/MWh between the trade partners.This presents a win-win situation for trade partners,as projected for the case of steel:renewable-rich countries can export green iron instead of iron ore and H2 and its PtX,resulting in an increase in local employment of ap-proximately 16 per cent and

246、 a rise in value added of 18 per cent.By shifting to DRI imports,renewa-ble-scarce regions can outsource the energy-intensive processing of iron ore while preserving the final steps of steel production,strengthening their competitiveness in the green steel industry and protect-ing over 90 per cent o

247、f jobs(Agora Industry and Wuppertal Institute,2023).The first commercial-scale steel factory based on GH2 is currently being built in northern Sweden,where electricity prices are ex-tremely low and where there is an abundance of iron ore(H2 Green Steel).The rising cost of fossil fuels due to stricte

248、r climate policies or higher CO2 prices,the reduced cost of renewable energy sources,for example through technological advances,subsidies,policy-induced incentives,as well as increasing demand for green materials and products(e.g.CBAM),will drive the renewables pull in the future.Other factors that

249、will have an impact include the costs of transport,the availability of other essential inputs,and the relevance of domestic production(Samadi et al.,2023).32|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESTable 2.3.Activity clusters related to GH2 prod

250、uctionActivity clusterEmployment effectsAspects to considerCountry examplesRenewable energy generation and electrolysisSignificant during construction but weak in plant operation(depending also on type of RE employed)Engaging in core activities requires substantial capital and scale.In most developi

251、ng countries,FDI and imported technologies are expected to play a leading role.If not addressed early on,conflicts related to land and water use,and equitable access to clean energy may arise.To meet export demand of 10 million metric tonnes by 2030,Namibia intends to build local EPC companies.Conve

252、rsion into PtX Significant during construction but weak in plant operation Capital-and scale-intensive,thus deterring new entrants.Core technologies are not mature(e.g.direct air capture).FDI and imported technologies are likely to play a leading role in most developing countries.By 2025,Chile aims

253、to prioritize the deployment of GH2 in ammonia production for domestic use.Export of GH2 and PtXSubstantial during the construction phase,but the potential for forward and backward linkages and technological learning is fairly limited High investments in ports,pipelines and storage capacities,as wel

254、l as transport mode-specific investments(for ammonia synthesis,generation of LOHC and deep-freezing hydrogen).Most potential exporting countries will strongly depend on imports of industrial equipment,which may considerably reduce net export revenues.Tax exemptions are often granted to investors(whi

255、ch are typically permitted to operate in special economic zones),thereby reducing the host countrys tax benefits.Namibia will prioritize the export of hydrogen derivatives including ammonia,methanol,synthetic kerosene and hot-briquetted iron using iron ore from Brazil or South Africa.Uruguay plans t

256、o develop a port solution for synfuels export in Montevideo by 2025.Mfr.Of renewable energy equipmentStrong employment effects High market concentration(especially of solar PV).Hydrogen technology patents(electrolysers and fuel cells).Some inputs are more accessible for local production(e.g.steel st

257、ructures,wind towers,pumps,cables),while others such as PV cells,wind turbine components and blades are often technology-intensive and rely on imports(IEA,2022d;Global Wind Energy Council,2022).China is promoting the development of proton exchange membrane fuel cells.Namibia intends to construct and

258、 deliver local component manufacturing for GH2 production.Trkiye has well-established manufacturing industries for solar and wind energy components and plans to develop GH2 technologies.Decarbonization of domestic industriesStrong employment effects High switching/start-up costs for clean technologi

259、es.Large subsidies for incumbent competitors.It may be difficult to attract domestic customers due to initial price differentials between conventionally produced and“green”products.In Kenya,three fertilizer projects are currently being developed.India supports GH2 production to enhance low-carbon st

260、eel production capacity.The GH2 industry:reframing the narrative|33|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH22.4.Building the GH2 value chain The opportunities discussed in Chapter 2.3 can be simultaneously leveraged to create value.The so-cio

261、economic impacts may vary significantly across different activity clusters.While large-scale export projects can improve the balance of payments,they might not stimulate industrial capabilities as much as projects focused on industry decarbonization or R&D investments in new GH2 technologies.The rea

262、lization of these opportunities largely depends on contextual factors(see Figure 2.4)such as natural resources,the policy framework and institutions,level of technology and an enabling social and economic environment.Technological knowledge.The GH2 value chain en-compasses various technologies that

263、are used in production,conversion,storage and in applications across industry,transport,buildings and variable renewable energy(VRE)integration,with many of these exhibiting low to medium maturity levels.Pat-ent activities in hydrogen production technologies are dominated by European,the United Stat

264、es and Japanese applicants(IEA and EPO,2023).A similar trend is observed for technologies related to hydro-gen storage,distribution,transformation and appli-cations,with between 84 per cent and 90 per cent of patent activity taking place in industrial countries in the Global North and China.Developi

265、ng countries may face challenges entering this highly concentrated market,given the ambitions of major importing coun-tries(Germany,Japan and the Republic of Korea)in hydrogen technology development.However,some countries may be able to leverage their expertise in related technologies,such as Fische

266、r-Tropsch-Syn-thesis for synthetic fuel production(South Africa)or biofuel production(Brazil),giving them a competitive advantage in international markets.Natural endowment and locational factors.GH2 pro-duction heavily hinges on natural endowments.Fac-tors such as solar irradiation and wind speed a

267、re key determinants of low-cost hydrogen production,as electricity costs account for 90 per cent of over-all hydrogen production costs.Countries with abun-dant renewable energy resources and access to water sources have a significant advantage in terms of pro-ducing low-cost GH2.Water availability a

268、nd quality Decarbonization of mobility industriesStrong employ-ment effects Many emerging economies have established the domestic production of diesel vehicles,driving up the costs of the shift to electric and fuel cell technologies.Lithium batteries and fuel cells are often not produced locally,res

269、ulting in most developing countries relying on imported low-carbon transport solutions such as battery-electric buses,trucks and urban rail systems.In Chile,researchers are developing a stationary prototype of a fuel cell mining truck to be placed on site at the Antofagasta PLCs Centinela copper min

270、e.The Shipping Corporation of India(or its potential successor,a private entity)will retrofit at least two ships to run on GH2 or other e-fuels by 2027.China is promoting R&D of large hydrogen energy aircraft and is actively exploring fuel cell applications in ships,for example.Attraction of FDI in

271、energy-intensive industriesStrong employ-ment effects Comparatively high capital costs(due to political,regulatory and market risks)of industry relocation dampen the renewables pull effect.The Brazilian mining company Vale and the Swedish start-up H2 Green Steel signed an agreement to study the deve

272、lopment of green industrial hubs in Brazil,using iron ore briquettes produced by Vale as input material for green steel production.ArcelorMittal concluded an MoU with SNIM to assess the feasibility of jointly developing a pelletization plant and DRI plant in Mauritania.34|GREEN HYDROGEN FOR SUSTAINA

273、BLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESare crucial for both hydrogen production and up-stream processes such as cooling solar PV modules.Freshwater resources tend to have higher permeate rates compared to seawater(IRENA and Bluerisk,2023),reducing the cost of GH2 product

274、ion.Addition-ally,the availability of minerals such as silicon and copper for solar PV modules,rare earths for wind tur-bines,nickel for alkaline and solid oxide electrolys-er cells(SOEC),and platinum group metals(PGM)for proton exchange membrane(PEM)electrolysers and fuel cells play a critical role

275、 in the production of hy-drogen-related technologies.The domestic availabili-ty of iron ore is also advantageous for the production of DRI.Other locational factors include the presence of underground salt caverns for storing bulk amounts of gaseous hydrogen,as well as the proximity to im-port market

276、s,as transport may increase the costs of hydrogen significantly.Public policy and policy structure.Developing a robust GH2 value chain requires careful public policy consid-erations and public resource allocation to promising pathways and projects.To ensure a fair energy tran-sition,it is crucial to

277、 implement strategies that incor-porate mechanisms to share both benefits and risks based on realistic projections.The quality of policy structure is equally important and entails a range of important governance aspects.Political stability plays a pivotal role in attracting FDI for the development a

278、nd expansion of clean energy technologies.Robust institutional capabilities facilitate coordination and cooperation between the public and private sector and the development and enforcement of appropriate standards.Additionally,strong public institutions pro-mote transparency,accountability and the

279、alignment of industrial policies with societal goals.Facilitating the expansion of the GH2 market.The more diversified a countrys economy is,the more effectively the linkage effects in both upstream and downstream GH2 production can be harnessed.Diver-sified economies can leverage their local capabi

280、lities for backward linkages,incorporating GH2 into existing downstream industries and preparing them for the low-carbon transition.Existing industry clusters,e.g.in the automotive industry,can accelerate the domes-tic expansion of the GH2 market.Air traffic hubs such as those in Qatar,Dubai,Abu Dha

281、bi and Addis Ababa,offer opportunities to co-locate synthetic aviation fuel production.Infrastructure,including ports,rail,pipe-lines,etc.,can be adapted to support GH2 production.Geostrategic assets,such as the Suez and Panama ca-nals,provide opportunities for hydrogen storage and related services,

282、as well as the co-location of down-stream industries(Van De Graaf et al.,2020).Advanced technological capabilities embedded in firms and re-search institutions foster knowledge generation and technology indigenization.Countries that export oil and gas often possess transferable industrial capabili-t

283、ies that can be easily transferred to GH2 investments,e.g.in the production and operation of refineries and other chemical plants,as well as pipelines and stor-age facilities.South Africa has accumulated techno-logical capabilities in coal liquefaction based on the Fischer-Tropsch process,which incl

284、udes the handling and processing of hydrogen and the conversion of power-to-liquid.A transparent financial system,sta-ble banks and favourable investment conditions,such as availability of risk capital,market liberalization and trade openness,also facilitate the integration of GH2 into the domestic

285、economy.Previous industrial development trajectories demon-strate the advantages associated with investing in so-cioeconomic endowments compared to relying exclu-sively on factor-cost advantages(Neary,2003).Greater diversification and economic complexity unlock a multitude of new economic opportunit

286、ies through a recombination of existing assets and capabilities.This,in turn,accelerates dynamic knowledge spill-overs(Hidalgo et al.,2018;Hidalgo and Hausmann,2009).It is thus essential for countries with factor-cost advantages in GH2 to avoid the formation of energy enclaves and to instead priorit

287、ize investments in do-mestic linkages,technological learning and support for institutions.Figure 2.4.Contextual factors shaping the development of large technical systems such as GH2The GH2 industry:reframing the narrativeSource:Adapted from Lipsey et al.(2005),p.56.|35|GREEN HYDROGEN FOR SUSTAINABL

288、E INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH22.5.The clover approach to GH2 developmentBy refocusing their efforts,developing countries can identify and leverage the specific advantages they stand to gain from entering the GH2 market.The ad-vantages may include economic decar

289、bonization,sustainable growth,technological advancement,and the creation of new employment opportunities.Many developing countries have already recognized the potential of these advantages and have incorporated them into their NHS.NHS must be seamlessly inte-grated into existing policy frameworks an

290、d address the uncertainties related to GH2 trade.This strategy plays a pivotal role in reducing risks and promoting the stability of the GH2 sector in production coun-tries.In this context,initiatives need to be developed along two important dimensions:(i)the structural dimension,which determines th

291、e GH2 sectors con-tribution to sustainable development in these coun-tries,and(ii)the time dimension,which outlines the phased roll-out of the GH2 sector over time.Four key aspects that many developing countries have already included in their NHS emerge:Box 2.3.Just TransitionAn inclusive and sustai

292、nable rollout of GH2 production must build on(i)civil society,by ensuring eq-uitable access to GH2 technologies and community involvement in decision-making;(ii)skilled work-force,by investing in education and training and by supporting workers to transition from fossil fuel industries;(iii)producti

293、vity and innovation,by attracting investments to sustainable projects and the development of GH2 technologies;and(iv)the environment,by addressing potential environmental injustices linked to GH2 production.A Just Transition further implies a broad and equitable distribution of benefits from hydroge

294、n produc-tion across society.The capital-and technology-intensive nature of GH2 production presents chal-lenges in terms of generating direct employment and community-level benefits.In countries with low industrial and technological capabilities,the potential for linkage effects may be limited.While

295、 large-scale export projects can improve the balance of payment,they may only stimulate limited industrial capabilities and may have unintended consequences such as the Dutch disease effect,windfall gains for real estate investors,and rent-seeking behaviour among stakeholders.Governments should in-t

296、roduce benefit-sharing mechanisms and develop clear and transparent guidelines in a participatory manner to ensure a fair distribution of the gains from hydrogen investments(see Section 3.3.3).36|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESFigure 2.

297、5.The clover approach to the GH2 market(illustration by authors)Dual:Export and local use.GH2 and PtX exports may have substantive spillovers,e.g.when inputs are sourced locally.Such projects are often associated with conditions that do not encourage local linkages.Domestic value creation,industrial

298、 linkages,techno-logical learning and permanent employment are more likely to be achieved when GH2 is produced for local uses,i.e.for decarbonizing the domestic economy and for promoting green industrialization.Integrated:Alignment with other development tar-gets.Successful GH2 development hinges on

299、 close alignment with broader national goals.Countries must therefore have a clear vision of how GH2 can con-tribute to the clean energy transition,to the achieve-ment of the SDGs and the establishment of a resil-ient economy.Investing in renewable energy and grid infrastructure is a“no-regret”optio

300、n,benefitting local industries and communities while also creat-ing favourable conditions for the hydrogen industrys growth.Creating leverage through regional coopera-tion.Promoting regional cooperation can be particu-larly advantageous for smaller countries,e.g.through the development of joint educ

301、ation and training pro-grammes and collaboration opportunities to develop high-quality infrastructure,thereby streamlining the implementation of the GH2 industry.Gradual:Promoting the implementation of small-to medium-sized projects of hydrogen production and local offtake,despite the strong economi

302、es of scale offered by GH2 production.Pilot and demonstration projects enable learning-by-doing and learning-by-in-teracting,especially when accompanied by R&D in-vestments and international knowledge transfers.In-novations in small-scale ammonia production show promise in enabling local green ferti

303、lizer production,even for small-holder agriculture(Brown,2018;Kizu-na,2023).On-site ammonia production in rural com-munities can lower costs and emissions,enhance food security by reducing import dependencies and benefit remote areas(e.g.Vrijenhoef,2017).When supporting large-scale export projects,p

304、reventing the creation of enclaves with their respective political and socio-eco-nomic risks is crucial.Phased:Planning the production and application of GH2 in steps 1.Existing green applications.Matching the GH2 supply with demand,especially in the early stages of mar-ket formation,is particularly

305、 challenging.One effec-tive approach is to leverage existing infrastructure,incorporate GH2 into current infrastructure systems without the need to retrofit and use incumbent pro-cesses.This strategy can accelerate market ramp-up(Cordonnier and Saygin,2022).Industries that rely on fossil fuel-based

306、hydrogen as feedstock can grad-ually transition to greener processes by substituting a growing share of their“grey”hydrogen with GH2.2.Capitalize on emerging market opportunities.Coun-tries with major airport hubs or large container ports should consider engaging in the production of synthetic jet a

307、nd maritime fuel as an entry point into the hydrogen market.Countries that rely on ammo-nia or fertilizer imports can significantly reduce their exposure to international price shocks and save for-eign currency by engaging in the production of green ammonia.3.Promote green industrialization.The stro

308、ng popula-tion growth projected in many developing countries,especially in Africa,and the urban migration trends will increase demand for basic materials such as iron,steel and cement.According to the IEA,demand for these industrial products will increase by 50 per cent between 2020 and 2030(IEA,202

309、2b).Countries in the Global South can benefit from building up a green heavy industry and avoiding carbon-based stranded assets,reducing their dependence on sys-tem-relevant material imports and exploiting their early-mover potential in the international trade of green commodities.The GH2 industry:r

310、eframing the narrative|37|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIES38|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DE

311、VELOPING COUNTRIESNearly half of Namibias population is employed in agriculture.The initiatives outlined in the coun-trys NHS are almost on par with the nations GDP.The lighthouse project Hyphen Hydrogen Energy has secured a 40-year concession for a vast land area of over 4,000 km,with a projected i

312、nvest-ment of USD 9.4 billion in a green hydrogen venture.To put this into perspective,Namibias GDP in 2021 was USD 12.2 billion.The government expects the successful implementation of these bold plans to result in the creation of about 185,000 direct and indirect jobs.Upscaling GH2 production to 49

313、1 Mt in line with IRE-NAs 1.5C scenario(IRENA,2023c)is linked to signifi-cant challenges.This is particularly true for countries in the Global South,where substantial changes will be necessary to address the inadequate infrastruc-ture,the lack of regulatory frameworks and financial incentives,as wel

314、l as the need to bolster skills devel-opment and policymaking experience.These changes need to be implemented at a much faster pace and on an unprecedented scale,with investments match-ing national gross domestic product(GDP)(see Box 3.1.).Developing countries that aim to become leaders in GH2 produ

315、ction must be prepared to substantially increase their renewable energy capacity relative to their current power systems(see Box 3.2.)Box 3.1.Namibia3.Backward linkages in GH2 production|39|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESGH2|GREEN HYDRO

316、GEN FOR SUSTAINABLE INDUSTRIAL DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIESBox 3.2.Trinidad and TobagoTrinidad and Tobago,one of the few Caribbean countries with a developed industrial sector and classified as a high-income economy according to the World Bank,currently produces around 2.5 M

317、t of grey hydrogen for its thriving chemical industry.The national hydrogen roadmap views this as an opportunity to gradually enter the hydrogen market,with the goal of producing 4 million tonnes of GH2 annually by 2065.This will require the installation of 57 GW of offshore wind power plants.To put

318、 this into perspective,the installed capacity of all power plants in the country in 2021 was nearly 20 times lower(about 3 GW,mostly natural gas-fired).Experience in producing grey hydrogen is not neces-sarily useful for scaling up GH2 production because the technologies needed are inherently differ

319、ent(in terms of input requirements).GH2 production neces-sitates the development of dedicated infrastructure for the delivery of electricity and water to electroly-sers;land availability;specific skill sets,and poten-tially even the local manufacturing of electrolyser components(see Figure 3.1.).Pol

320、icymakers must therefore focus on attracting in-vestments to accelerate the deployment of renewable energy sources,develop strategies to supply renew-able electricity for GH2 production,facilitate the ac-quisition of necessary technology imports,encourag-ing the growth of renewable energy technology

321、 and equipment in the manufacturing sector,and create an enabling environment for upstream supply chain de-velopment.Establishing and maintaining social con-tracts throughout these efforts is imperative.Figure 3.1.Prerequisites for GH2 production projects40|GREEN HYDROGEN FOR SUSTAINABLE INDUSTRIAL

322、DEVELOPMENT:A POLICY TOOLKIT FOR DEVELOPING COUNTRIES3.1.Strategies for attracting investors to GH2 productionMost countries in the Global South have limited fi-nancial stimulus measures to support the deploy-ment of electrolysers.Instead of relying on support-ing policies,they often adopt an“open t

323、o business”approach,with local policymakers focusing on ad-dressing country risk factors to attract foreign inves-tors rather than providing subsidies(Craen,2023).Foreign enterprises sponsored over 70 per cent of all renewable energy generation projects in develop-ing and transition economies in 201

324、9,a number that is even higher in some developing countries(World Bank and Energy Charter Secretariat,2023).Investors face three major risks:(i)technological,(ii)political,and(iii)commercial.Technological risks are associated with the quality of engineering and the reliability of the equipment being

325、 used.Political risks can materialize in the event of unex-pected changes to the regulatory framework during the projects lifespan.Commercial risks refer to the uncertainty of long-term off-take agreements and prices.These risks have real-world consequences.For exam-ple,although techno-economic anal

326、ysis suggests that Egypt and Libya have the potential to supply signifi-cant amounts of hydrogen to Europe,their socio-eco-nomic potential is comparatively low,particularly rel-ative to most European countries.Such elevated risks imply higher financing costs and a reduced likelihood of successfully

327、implementing large-scale hydrogen projects(Braun et al.,2023).While investors bear pri-mary responsibility for managing technological risks,both political and commercial risks are typically cov-ered in regulations.The World Bank identified 119 arbitration disputes between investors and govern-ments

328、involving renewable energy projects initiated before 1 February 2022(since 1998).The most preva-lent political risk in such disputes are adverse regu-latory changes(World Bank and Energy Charter Sec-retariat,2023).Given its control over regulation and governance,the public sector plays a critical ro

329、le in mitigating risks for international investors,especial-ly in countries with low investment ratings or where concerns about information asymmetry might arise(IRENA,2023a;World Bank and Energy Charter Secre-tariat,2023).To ensure a successful green transition,governments must develop an ambitious

330、 long-term vision for their renewable energy sector.This vision should include specific targets for capacity expansion and emissions reduction that span several decades.In a first step,governments should identify short-term targets(5 years),medium-term targets(1015 years)and long-term targets(around

331、 20 years and beyond)for renew-able energy and for both the energy and industrial sectors.Strategic planning provides a clear roadmap for progress and facilitates effective implementation of renewable energy policies.To mitigate risks and attract investors,policymakers must prioritize the es-tablish

332、ment of a long-term and transparent regulato-ry framework.This can be achieved by implementing measures that are widely adopted(see Chapter 4).In the context of GH2 production,a long-term vision necessitates the development of a comprehensive NHS,which should contain clear guidelines for the hydroge

333、n value chains development,an overarch-ing framework for future regulations,defined roles for government bodies and future support measures.The key objectives include establishing the most con-ducive environment with clearly defined long-term regulations that align with international standards.These include:Development of a NHS and establishment of na-tional hydrogen governance regulations.Establi