Analysis of the Potential for Green Hydrogen and Related Commodities Trade

Analysis of the Potential for Green Hydrogen and Related Commodities Trade” by International Renewable Energy Agency (IRENA)

SCOPE OF WORK AND METHODOLOGY

The study evaluates global trade potential of green hydrogen and three derived commodities (ammonia, e-methanol, and DRI) by 2050 using a cost-optimisation model, assuming two scenarios:
📍Same WACC: uniform capital cost (5%)
📍Differentiated WACC: region-specific capital cost

Methodology of cost optimisation model:
📍5 VRE resource classes
📍3 green hydrogen commodities
📍3 green hydrogen carriers
📍1888 trade possibilities
📍35 geographical regions
📍1 year optimisation

HYDROGEN TRADE PATTERNS

🔅Same WACC Scenario

Percentage of global demand met by trade in 2050:
📍Ammonia: 30.3% traded
📍Methanol: 17.9%
📍Gaseous H₂: 14.4%
📍DRI: 14.1%

Global trade flows in 2050:
📍Compressed gaseous hydrogen through pipelines in EU and North Africa (3.25 Mt and 9.36 Mt)
📍Ammonia: Africa, Australia, Latin America & the Middle East (exporters), while EU, Japan, Republic of Korea & Southeast Asia (importers)
📍Methanol: USA import from Latin America, EU from Africa, & Southeast Asia from Africa & Russian Federation
📍DRI using green hydrogen: Latin America, the Middle East & sub-Saharan Africa (exporters)

Net Importers & Exporters:
📍Major Exporters: North Africa (10.5 Mt), Rest of Africa (6.2 Mt), Latin America (5.5 Mt), Middle East (4.4 Mt)
📍Major Importers: EU (10.2 Mt), Japan (6.3 Mt), Korea (5.9 Mt), Southeast Asia (6.0 Mt)

Infrastructure requirements (USD 2.49 trillion investment by 2050):
📍46% Generators
📍20% Electrolysers
📍19% Conversion plants
📍8% Transport
📍7% Storage

🔅Differentiated WACC Scenario

Global trade flows in 2050:
📍Ammonia: China, USA & North Africa (exporters) Japan, Republic of Korea & EU (importers)
📍Methanol: Africa, China, Latin America & Russian Federation export to USA, EU & Southeast Asia
📍 DRI using green hydrogen: Australia, China & USA

Net Importers & Exporters:
📍Major Exporters: China (6.3 Mt), Australia (6.1 Mt), Latin America (5.4 Mt), USA (4.9 Mt)
📍Major Importers: Southeast Asia (8.4 Mt) EU (7.1 Mt), Japan (6.3 Mt), Korea (6.1 Mt)

🔅Comparative Review of Results and Sensitivities

Percentage traded:
📍DRI: 14% Same, 21% Differentiated
📍Gaseous H₂: 14% Same, 9% Differentiated
📍Methanol: 18% Same, 14% Differentiated
📍Ammonia: 30% Same, 35% Differentiated

Comparison of net importers and exporters
📍Top three exporters Differentiated WACC: Australia, China, & USA, while in the Same WACC: Africa, Latin America & the Middle East.
📍EU imports drop from 10.2 Mt (Same) to 7.1 Mt (Differentiated)
📍Sensitivity Analysis:
◽️Conservative VRE cost → +11% trade (Same WACC)
◽️Conservative transport cost → −25% trade (Same WACC), −19% (Differentiated)
◽️Electrolyser cost has minimal impact

Source:

https://www.linkedin.com/posts/arga-febriantoni_the-potential-green-hydrogen-related-commodities-ugcPost-7346755965746147328-Aib4/?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAtGGkQBsxwMBmX3lEJO8btihnfBCaHqTz4