The Geopolitics of Renewable Hydrogen

Abstract

The transition to a low-carbon energy system will likely shake up the geopolitical status quo that has governed global energy systems for over a century. Policymakers need to rethink the role their country could play in a new energy world.

Renewables are widely perceived as an opportunity to shatter the hegemony of fossil fuel-rich states and democratize the energy landscape. Virtually all countries have access to some renewable energy resources (especially solar and wind power) and could thus substitute foreign supply with local resources. Our research shows, however, that the role countries are likely to assume in decarbonized energy systems will be based not only on their resource endowment but also on their policy choices.

Renewable hydrogen is enjoying growing political and commercial momentum as a versatile and sustainable energy carrier with the potential to play a key role in the global transition to a low-carbon economy; and it is often described as the ‘missing link’ in global decarbonization—especially for energy intensive sectors where emissions are hard to abate and electrification is not the preferred solution, such as steel production, high-temperature industrial heat, shipping, aviation, and heat for buildings. But making renewable hydrogen a significant part of the world’s future energy mix will require defining new and innovative national and international policies while developing appropriate market structures aimed at spurring innovation along value chains; scaling technologies while significantly reducing costs; and deploying enabling infrastructure at scale. Success is possible, but this transformational effort will require close coordination between policy, technology, capital, and society to avoid falling into the traps and inefficiencies of the past.