To support the development of a green hydrogen industry, policymakers have been told to prioritise actions depending on the maturity of their national hydrogen sector.
In late May, the International Renewable Energy Agency (IRENA) published Green Hydrogen Supply: A Guide to Policy Making, seeking to build a basis for understanding challenges to developing a supply chain for green hydrogen, such as its cost compared to non-renewable alternatives and a lack of dedicated infrastructure. It also highlighted some of the solutions available, noting some are more suitable for kickstarting the development of a green hydrogen industry, whereas others will be needed once the system progresses.
At the onset of green hydrogen policymaking, fiscal policies, including VAT exemptions or grey hydrogen taxes, and targets, for things such as electrolyser capacity and green hydrogen production, can be introduced, alongside support for manufacturers. International agreements can also be envisaged at this stage. Green hydrogen tariffs, with premium and virtual blending mandates could then follow as the real cost of hydrogen becomes clear.
For transport infrastructure, initial actions recommended include creating technical and commercial standards, the decarbonisation of delivery trucks and devising a plan for future infrastructure. Financing instruments will be needed for this future infrastructure, ensuring that it is possible to create a grid capable of hosting hydrogen.
As the sector then progresses, more mature policies can be implemented. This includes auctions and the redesign of power system structures, allowing the use of seasonal storage and procuring of ancillary services from electrolysers. Once the market reaches a self-sustaining level, the focus should then be on maintaining the speed of innovation with R&D funding, as well as supporting green electricity and a Guarantee of Origin system to maintain green hydrogen’s sustainable nature. Meanwhile, the IRENA Coalition for Action also published a report, offering practical insights for using green hydrogen to decarbonise end-use sectors. It outlined a series of key takeaways for governments, including the need to act now to develop national strategies and plans for green hydrogen, developing globally recognised standards and supporting certification schemes for green hydrogen, and prioritising use of hydrogen in hard-to-abate sectors. Other recommendations include considering how existing regulation of electricity grid fees and taxation will impact opportunities for green hydrogen production and promoting development of green hydrogen hubs and valleys