Green hydrogen for industry: A guide to policy making

By International Renewable Energy Agency IRENA

This report highlights the range of policy options available to support green hydrogen in the industrial sector and complements these policies with country examples.

• Language: English
• Publisher: IRENA
• Release date: Mar 1, 2022
• ISBN: 9789292604752

Book preview

© IRENA 2022

Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be secured before any use of such material.

Citation: IRENA (2022), Green hydrogen for industry: A guide to policy making, International Renewable Energy Agency, Abu Dhabi.

ISBN: 978-92-9260-422-6

eBook ISBN: 978-92-9260-475-2

ABOUT IRENA

The International Renewable Energy Agency (IRENA) serves as the principal platform for international co-operation, a centre of excellence, a repository of policy, technology, resource and financial knowledge, and a driver of action on the ground to advance the transformation of the global energy system. An intergovernmental organisation established in 2011, IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity.

www.irena.org

DISCLAIMER

This publication and the material herein are provided as is. All reasonable precautions have been taken by IRENA to verify the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication or material herein. The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned. The designations employed, and the presentation of material herein, do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.

GREEN

HYDROGEN

FOR INDUSTRY

A GUIDE TO POLICY MAKING

ACKNOWLEDGEMENTS

The report was developed under the guidance of Rabia Ferroukhi and Ute Collier and authored by Emanuele Bianco, Sufyan Diab and Herib Blanco.

IRENA colleagues Diala Hawila, Hanbit Lee, Emanuele Taibi, Barbara Jinks, Ranya Oualid, Gabriel Castellanos and Francisco Boshell provided valuable input.

Massimo Santarelli and Marta Gandiglio (Polytechnic University of Turin) provided technical contributions to the report. Cédric Philibert provided important and welcomed contributions and observations.

The report benefited also from the reviews and comments of experts, including Elvira Lopez Prado and Andrea Real Ruiz (Acciona), Matthias Deutsch, Gniewomir Flis and Paul Münnich (Agora Energiewende), Suhail Shatila (Apricorp), Martino Comelli (American University of Central Asia), Lin Zhang (China Hydrogen Alliance), Frank Wouters (EU-GCC Clean Energy Technology Network), Eva Vitell (Hybrit), Jose Miguel Bermudez (IEA), Marta Martínez (Iberdrola), Tomas Kåberger and Yuko Nishida, (Renewable Energy Institute), Ji Chen (Rocky Mountain Institute), Aidan Cronin (Siemens Gamesa), Thierry Lepercq (Soladvent), Petra Schwager and Smeeta Fokeer (UNIDO), Christin Töpfer (Vattenfall), Sripathi Anirudh, Kajol and Deepak Krishnan (World Resources Institute).

Available for download: www.irena.org/publications

For further information or to provide feedback: [e-mail]

CONTENTS

Abbreviations

Units of measure

INTRODUCTION

About this report

Hard-to-abate sectors and green hydrogen

Priority setting in green hydrogen policy making

The experience in the power sector

1. POTENTIAL GREEN HYDROGEN USES IN INDUSTRY AND RELATED BARRIERS

1.1. Current status and potential uses

1.2. Barriers

2. POLICIES TO PROMOTE GREEN HYDROGEN IN INDUSTRY

2.1. Green (hydrogen) industrial policies

2.2. Industrial decarbonisation strategies

2.3. Technological mandates

2.4. Carbon pricing

IN FOCUS: Addressing carbon leakage

2.5. Financial and fiscal support

2.6. Creating the market for green products

2.7. R&D

3. THE WAY FORWARD

References

FIGURES

Figure i.1 Green hydrogen value chain and the focus of this report

Figure i.2 Green hydrogen policy priority

Figure 1.1 Pure hydrogen demand in industry, global, 2020

Figure 1.2 Main steel production pathways

Figure 1.3 Working temperatures for selected renewable heat technologies and temperature requirement of selected industries

Figure 2.1 Barriers and policies to support green hydrogen uptake in the industrial sector

Figure 2.2 Selected green hydrogen for industry policies by status, selected countries, 2022

Figure 2.3 Estimated carbon prices needed to cover the cost gap between green and grey materials

Figure 2.4 Carbon allowance price in the European Union, 2008-March 2022

Figure 2.5 Schematic of a BCA

Figure 2.6 Flat vs carbon content BCA tariffs

Figure 2.7 Relationship between average ETS price and CCfD subsidy at strike price of USD 65/tCO 2

Figure 2.8 Bilateral auction system schematic

Figure 2.9 Material required to build a 500 MW solar plant, onshore wind plant or offshore wind plant

Figure 3.1 Roadmap of policies to promote hydrogen use in industry across three stages of deployment

BOXES

Box i.1 IRENA’s work on green hydrogen and hard-to-abate sectors

Box i.2 Priority setting in green hydrogen policy making

Box 1.1 Hydrogen in oil refineries

Box 1.2 Costs of green hydrogen and materials

Box 1.3 Industrial companies with hydrogen-related decarbonisation targets – selected examples

Box 1.4 The Glasgow Breakthroughs

Box 2.1 German hydrogen strategy

Box 2.2 UK Industrial Decarbonisation Strategy

Box 2.3 Procurement of green steel through auctions for renewable energy

Box 2.4 Ecoleaf

ABBREVIATIONS

UNITS OF MEASURE

INTRODUCTION

ABOUT THIS REPORT

Green hydrogen¹ is benefiting from a new wave of interest due to its potential to make a significant contribution to meeting climate goals and advancing the energy transition. In response, IRENA has been analysing options for the production and consumption of green hydrogen, along with devising policies to support and accelerate its commercialisation and wide adoption (see Box i.1).

In 2020 IRENA published an initial report focusing on green hydrogen policies: Green hydrogen: A guide to policy making (IRENA, 2020a). It outlines the main barriers to the uptake of green hydrogen and the key pillars for effective policy making. It also creates a framework for discussion about green hydrogen policy making.

The green hydrogen value chain, from production to consumption, consists