Comprehensive Sustainability for Renewable Hydrogen Value Chains
The renewable hydrogen sector presents a unique opportunity for first movers to demonstrate the potential of a sustainable and equitable energy transition, both locally and globally. The hydrogen value chain is one of the most critical factors in achieving climate goals, with the emissions levels throughout the chain playing a key role in this regard.
To ensure that renewable hydrogen and hydrogen-derived commodity value chains are sustainable and equitable, a comprehensive approach that considers economic, environmental, social and governance aspects beyond emissions intensity alone is also necessary. This approach will help to address the challenges that arise from the production, transportation and consumption of renewable hydrogen and hydrogen-derived commodities.
The economic aspect considers the cost-effectiveness of renewable hydrogen production, transportation and storage. The environmental aspect deals with the impact of renewable hydrogen production on the environment, such as water consumption and land use. The social aspect covers the impact of renewable hydrogen production on communities, such as job creation and training. Finally, the governance aspect contains the regulatory framework and the strategic target-setting of stakeholders in the renewable hydrogen value chain.
In summary, the renewable hydrogen sector has tremendous potential to contribute to a global energy transition that is both fair and sustainable. A comprehensive approach that considers all aspects of renewable hydrogen production and consumption is necessary, however, to ensure that the emerging renewable hydrogen and hydrogen-derived commodity value chains are truly sustainable and equitable.
ACTIONS SUGGESTED:
- In order to ensure that the emerging hydrogen sector is beneficial for both producer and consumer countries, it is important to have a shared understanding of sustainability. This involves working towards a common understanding on the strategic and project level, which includes considering environmental, economic and governance aspects. A just and sustainable renewable hydrogen sector can be fostered by creating a shared understanding of sustainability.
- The renewable hydrogen market is still in its early stages. There will be many challenges to overcome during the scale-up phase. To support a rapid scale-up, it is important to share best practices and lessons learnt by first movers, especially those that have assessed and addressed the impact on sustainable development. This will help to ensure the mutual benefit of the sector.
Mitigating Environmental Risks and Maximising Opportunities
The shape of any product’s value chain varies depending on the technologies selected, efficiencies and whether the final product is locally consumed or transported over long distances. With hydrogen, there will be multiple derivatives available on the market, all of which may be traded. To contribute towards achieving climate goals, it is essential to minimize the emissions intensity throughout the entire value chain. This requires a focus on rapid renewable energy deployment. A robust quality infrastructure is necessary to minimize potential risks, ensuring that renewable hydrogen and its commodities can be traded globally, while also being sustainable and safe.
When it comes to emissions intensity, renewable-based electrolytic hydrogen holds the least amount of uncertainty in the full market of production options. It is also likely that major importing markets in the future will prefer renewable hydrogen and its derivates. By producing these, access to more importing markets can be achieved, reducing uncertainty. This further enables alignment with achieving the SDGs.
ACTIONS SUGGESTED:
- Renewable hydrogen production requires the rapid deployment of renewable energy. The deployment of renewable energy should not be limited to just meeting the needs for renewable hydrogen production. To ensure that the development of the hydrogen economy in exporting regions also drives the wider energy transition, it is important to support renewable energy deployments beyond those required to power production facilities – both locally and in areas with abundant resources.
- Developing high-quality infrastructure for the production and transportation of renewable hydrogen and its derivatives can help ensure that it can be traded globally while still being sustainable and safe. Co-operation in developing a strong quality infrastructure can ensure the safe use of hydrogen at both the national level and internationally through intergovernmental forums.
- To ensure that renewable hydrogen and derivative production maximizes opportunities for reaching climate goals, it is crucial to champion initiatives that emphasize environmental impact, resource efficiency and water management. It is also important to avoid offloading negative impacts in resource rich areas.
