Mar 01, 2023
                       

Industrial Policy for the Green Hydrogen Economy

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The production of green electricity capacity and the electrification of most economic activities are a cornerstone of the energy transition and the green transformation. Despite being the most efficient form of using energy, direct electrification is not viable to substitute fossil fuels in all activities as there are hard-to-abate sectors that cannot rely on green electricity. These sectors can, however, be fuelled by hydrogen produced through electrolysis using renewable sources (green hydrogen). Together with this, there is widespread agreement that the global legitimacy of climate change mitigation will depend on” just transitions” in which the economic gains associated with it are shared across countries. Hence the issue of the possibility for “green growth” in large emerging economies becomes important. In this project, we will bring together researchers from universities in Brazil, China, South Africa, and Chile, which are all countries are set to become key players in the global green hydrogen economy, and analyse economic opportunities attached to this sector.

Besides the role in the energy transition, green hydrogen provides new means for renewable energy storage and distribution. With the current falls in the prices of renewables, the large-scale diffusion of green hydrogen is moving closer. This should have a profound impact on energy trade and trade in decarbonized production and it opens new opportunities for developing countries that have the required natural resources and capabilities to take advantage of this production. Notwithstanding this potential, the direction that industrial development will take depend on how states design incentives and regulation targeting it and how the private sector will respond to them.

Thus, the project’s goal is to analyse and compare public policies implemented in those countries to incentivise industrial development through the creation of a green hydrogen economy. All analysed countries are expected to be significant players in terms of production and demand for green hydrogen, but their current position, priorities and policy approaches for this sector’s development have not hitherto been subject to scholarly comparative analysis. It is expected that such an analysis can facilitate to design appropriate and context specific industrial policies for this sector, both at the national and global levels.

To fulfil this rational, our project aims at examining of the similarities and differences in their industrial policy approaches targeting the green hydrogen economy, noting how their preconditions might influence their respective approach. This is also an opportunity for the team to identify additional key areas for further collaboration. The main output will be (a) one workshop to bring together and compare findings, (b) one paper for peer-reviewed journal distilling the results of our analysis and (c) at least one follow-up project proposals.

Who's involved