IRENA analysis shows hydrogen could disrupt global trade and bilateral energy relations

January 23, 2022 |

In United Arab Emirates, rapid growth of the global hydrogen economy can bring significant geoeconomic and geopolitical shifts giving rise to a wave of new interdependencies, according to new analysis by the International Renewable Energy Agency (IRENA).

“Geopolitics of the Energy Transformation: The Hydrogen Factor” sees hydrogen changing the geography of energy trade and regionalising energy relations, hinting at the emergence of new centres of geopolitical influence built on the production and use of hydrogen, as traditional oil and gas trade declines.

Driven by the climate urgency and countries’ commitments to net zero, IRENA estimates hydrogen to cover up to 12 per cent of global energy use by 2050. Growing trade and targeted investments in a market dominated by fossil fuels and currently valued at USD 174 billion is likely to boost economic competitiveness and influence the foreign policy landscape with bilateral deals diverging significantly from the hydrocarbon relationships of the 20th century.

IRENA estimates that over 30 per cent of hydrogen could be traded across borders by 2050, a higher share than natural gas today. Countries that have not traditionally traded energy are establishing bilateral energy relations around hydrogen. As more players and new classes of net importers and exporters emerge on the world stage, hydrogen trade is unlikely to become weaponised and cartelised, in contrast to the geopolitical influence of oil and gas.

Category: Research

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