World Hydrogen Week 2024
As we continue to provide economic advice with a focus on climate, energy, and innovation, hydrogen has emerged as a key player in this triad. It is vital for a company like ours to remain well-informed on the latest developments in this sector. Hence, Econopolis attended the World Hydrogen Week 2024 (World Hydrogen Congress and World Hydrogen Derivatives) in Copenhagen on the first and second of October. The World Hydrogen Congress, in its fifth year, has become a premier event for the hydrogen community, offering invaluable opportunities for networking and knowledge-sharing. It is a hub for innovative hydrogen technologies, bringing together industry experts from around the globe to discuss financing, infrastructure, and technology. Concurrently, the World Hydrogen Derivatives event provided insights into advancements and policy frameworks surrounding hydrogen derivatives, such as ammonia and methanol, which are integral to the future hydrogen economy.
These two days were packed with insightful presentations and meaningful debates, leaving attendees with a palpable sense of the dedication within the hydrogen community to drive the energy transition forward. Key themes revolved around off-take agreements, bankability, FID (Final Investment Decision), and the evolving regulatory landscape. The following key messages represent the collective insights and perspectives shared by the conference attendees.
- Europe: The Near-Term Hub for Green Hydrogen
Europe is currently leading the charge for green hydrogen. While global demand remains sluggish, Europe’s favorable conditions for green hydrogen production – particularly in the Nordic region – are promising. Factors such as political stability, stable grids with green electricity, and biogenic carbon availability (the forestry industry) are fostering this growth.
- Global South: The Future of Hydrogen Production
Long-term hydrogen production is expected to shift to the Global South, where countries like Morocco are already demonstrating potential with their abundant renewable resources and political commitment. Sub-Saharan Africa could also become a major player as infrastructure and resources develop. As is the case with fossil fuels today, Europe will keep importing most of its energy.
- Methanol vs. Ammonia: No True Debate
The current discussion between methanol and ammonia as preferred hydrogen derivatives is more about immediate investments rather than long-term rivalry, as the potential markets for hydrogen derivatives are substantial. In reality, both will play essential roles in different sectors, sharing common risks and opportunities. Furthermore, there are many other alternatives that will play their role, as well.
- Too Much Focus on Negative News
Headlines are often dominated by project cancellations, such as the recent FlagshipONE plant, overshadowing the ongoing momentum in the sector. While demand growth may not match expectations, projects are still moving forward, and the industry remains optimistic. It's crucial to avoid deterring investors with disproportionate attention to negative news.
- Biogenic Carbon Shortage
The hydrogen industry faces a significant challenge in sourcing biogenic carbon, particularly for methanol production. This shortage may hinder large-scale transitions, though solutions could emerge from regulatory adjustments or technological innovations. Of course, this is not an issue with pure hydrogen or ammonia.
- Regulatory Gaps in Europe
While Europe’s regulatory frameworks are designed to promote hydrogen, they often miss the mark by creating barriers instead of opportunities. A shift in focus from production targets to consumer bottlenecks, alongside better financial support, would improve outcomes. Support is not only necessary to reach cost-parity, but there are also substantial switching costs that should be covered. A global carbon tax could also level the playing field and foster further growth.
- Need for Certification Schemes
A certification and credit system for green hydrogen could unlock major opportunities. Such a framework would allow European companies to finance hydrogen projects in renewable-rich regions – for example, in the Global South – without the financial and environmental costs of transporting the hydrogen.
- Blue Hydrogen as a Bridge, Not a Solution
While retrofitting existing plants to produce blue hydrogen may help build infrastructure, investing in new blue hydrogen facilities would prolong the reliance on fossil fuels. In this industry, the upstream methane leakages seem to be underestimated, which is why we should be careful with its use to produce hydrogen. Many panelists seemed to call for a clear focus on green hydrogen, which will be vital for long-term decarbonization.
The hydrogen industry is full of momentum and optimism, despite the obstacles it faces. Supportive policy frameworks, better aligned with practical realities, will be critical to advancing hydrogen projects and ensuring the sector’s success in the global energy transition. At Econopolis, we are eager to deepen our involvement in the hydrogen sector. If you have projects or initiatives where our economic advice could add value, we invite you to reach out to our team. Let’s work together to power a hydrogen-driven future!