Tuesday, 24 September 2024 – In this webinar, Mr Karthik Hari and Ms Anne-Sophie Corbeau provide a stocktake of global and regional progress towards the development of green hydrogen as an up-and-coming form of alternative energy.
CLIMATE CHANGE IN SOUTHEAST ASIA PROGRAMME WEBINAR
Mr Kathik Hari, Director and Chief Decarbonisation Researcher at Mizuho Bank Singapore and Ms Anne-Sophie Corbeau, Global Research Scholar at the Center on Global Energy Policy, provided regional and global perspectives on the state of low-carbon hydrogen development and drew out insights for Southeast Asian stakeholders keen to tap on its potential as an alternative fuel for decarbonisation across multiple sectors. The session was moderated by Dr Christopher Len, Senior Visiting Fellow at the Climate Change in Southeast Asia Programme (CCSEAP) at ISEAS.
Dr Christopher Len first presented a brief background on perceptions of green hydrogen in Southeast Asia. In the recently concluded Southeast Asia Climate Outlook 2024 Survey Report conducted by ISEAS, green hydrogen rose in popularity as a potential source of clean energy, with 13.8% respondents selecting it as one of their top two choices for their countries. It was a significant increase from the previous year’s Survey, where only 8.3% of respondents chose green hydrogen. This growth in support was mainly attributed to respondents from Malaysia, Indonesia and Vietnam—countries which have announced national hydrogen strategies and roadmaps in the past year. Dr Len also noted that Japan was seen as a clear leader in global climate innovation among Southeast Asians, especially those from the Philippines, Brunei, Indonesia, Myanmar and Thailand.
Mr Karthik Hari went on to give an overview of hydrogen trends in Southeast Asia and India. He noted that in both India and ASEAN-6 countries, use of hydrogen is mostly in the form of captive production and the dominating end-use is fertilisers. Moreover, the majority of hydrogen is still produced using natural gas or coal as feedstock—known as grey hydrogen which is emissions-intensive. In the ASEAN-6 countries and India, national strategies to decarbonise hydrogen production are either completed or under consideration. India’s ambitious goals for hydrogen capacity could help contribute up to 8% of annual greenhouse gas reductions by 2050. In comparison, Indonesia’s targets for hydrogen consumption are relatively modest at a maximum of 5.6 million tonnes per annum or 56 million tonnes of CO2 equivalent reduction by 2060 or realistically at 1.5 million tonnes per annum or 15 million tonnes of CO2 equivalent reduction by 2045. In this regard, hydrogen’s role in Indonesia’s decarbonisation efforts will be limited.
Meanwhile Malaysia’s capacity for hydrogen production is uncertain due to competing needs for renewable energy despite big plans for production and export and bold targets of 2.5 million tonnes per annum of green hydrogen and over 50 GW of renewable electricity by 2050.
Mr Hari identified three main challenges for green hydrogen development in ASEAN-6: reduction of production and landed costs, developing commercial end use and resolving technical problems. Costs remain much higher for green hydrogen compared to fossil-fuel based grey hydrogen, while subsidies and carbon pricing remain insufficient or absent. In comparison, other aspiring exporters have implemented government incentives, such as the Hydrogen Headstart program in Australia which provides revenue support of up to $2 billion through competitive hydrogen production contracts. On the demand side, countries must secure downstream buyers and off takers to prevent stranded projects. In terms of technical readiness, Laos, Cambodia and Vietnam need to address and establish safety export standards. Countries also need the supply chain infrastructure to introduce hydrogen into their energy networks. Mr Hari concluded that while hydrogen production is likely to pick up by 2050, it is not a miracle fuel and should only be used where it makes technical and economic sense: in hard-to-abate sectors such as fertilisers, refining and petrochemicals.
Ms Corbeau continued with a broader picture of hydrogen development at the global scale. Interest in low-emissions hydrogen (including hydrogen produced using natural gas or with carbon capture) has been growing since 2020 and more than 60 countries now have a hydrogen roadmap; but the cost of electrolysers, renewable energy and finance; technical difficulties in transport and storage, the lack of demand and the slow pace of regulatory framework development are persistent challenges. She emphasised that renewable hydrogen costs are unlikely to fall to US$1/kg by 2030 as estimated and hoped by hydrogen supporters.
Global production volumes of hydrogen are the highest in North America, the EU and China, followed by India, Southeast Asia and Australia. By 2030, there could be 12-18 million tonnes of low-emissions hydrogen capacity globally. However, this is still not aligned with net zero pathways. As projects accelerate, costs need to be lowered, demand-side visibility must be strengthened, and frameworks should be established.
In terms of regulatory support, Ms Corbeau highlighted potential best practices such as the US’ 45Q technology-neutral tax credit system based on carbon intensity and Regional Clean Hydrogen Hubs Program (H2Hubs), and close regional coordination on the integration of hydrogen infrastructure in the EU, which recently adopted a hydrogen and gas decarbonisation package. She warned that the global market for hydrogen will be highly competitive due to the scarcity of importers. Countries need to minimise costs and strike bilateral agreements to get ahead. They must also be aware of import requirements for low emissions hydrogen: the EU, one of the few potential importers, has adopted two delegated acts outlining its definition of renewable hydrogen.
Ms Corbeau concluded by emphasising that pragmatism is of the utmost importance, as she has observed many unrealistic hydrogen strategies; and reiterated Mr Hari’s point that hydrogen strategies should target sectors where it is economically viable such as refining and ammonia production, rather than day-to-day power generation or light-duty vehicles.
During the Q&A session, the panellists addressed questions on global certifications for clean hydrogen, the potential of geological hydrogen, the importance of regional cooperation in scaling up the infrastructure needed for low carbon hydrogen in Southeast Asia, the potential impacts of water scarcity as climate impacts intensify, and the influence of geopolitical agendas on hydrogen trade and innovation.
The webinar drew an audience of 80 participants.