The Future of Green Hydrogen Value Chains: Geopolitical and Market Implications in the Industrial Sector

The global transition to a low-carbon economy will significantly impact existing energy value chains and transform the production to consumption lifecycle, dramatically altering interactions among stakeholders. Thanks to its versatility, green hydrogen is gaining economic and political momentum and could play a critical role in a carbon-free future. Furthermore, its adoption will be critical for decarbonizing industrial processes at scale, especially hard-to-abate ones such as steel and cement production. Overall, hydrogen demand is expected to grow by 700% by 2050 (BP, 2019). Currently, the two central challenges to green hydrogen adoption and use at scale are limited infrastructure availability and cost. While recent spikes in fossil fuel prices due to the war in Ukraine have made green hydrogen cost-competitive with blue and grey hydrogen (Radowitz, 2022), from a long-term perspective, the International Renewable Energy Agency (IRENA) predicts a decline in green hydrogen costs by up to 85% by 2050 (IRENA, 2020), making it the dominant hydrogen form (IRENA, 2022).