The countries best suited for GH2 production are those with high renewable energy endowments. They are mostly located in the Global South, which will have an impact on the geography of energy trade and the geopolitical landscape1. Diversification of energy supply, facilitated by a shift away from fossil fuel extraction, will contribute to energy security. A considerable share of the population in many potential GH2 producers, particularly in Africa, still lack access to the electricity (see figure below) and/or rely on fossil fuel for energy (e.g. wood burners). The GH2 transition represents an opportunity to boost local energy access and security and to accelerate decarbonization by expanding renewable energy supply. Voluntary energy compacts and corporate social responsibility (CSR) could play a key role in achieving clean and affordable energy for all (SDG 7). 

GH2 is produced through the electrolysis of water, i.e. the process of splitting water into oxygen and hydrogen using electricity powered by renewable energy. Between 9–15 litres (l) of water are required to produce 1 kg of GH22 compared with the 24 l needed for 1 kg of H2 in steam reforming or 38 l for 1 kg of H2 in coal gasification3. Newborough and Cooley (2021) contend that the large-scale use of electrolysis would have a relatively neutral impact on global water resources from a lifecycle perspective. Accordingly, new demand would be counterbalanced by water savings achieved through conventional fuel and energy production. IRENA projects that 409 million tonnes of GH2 are needed by 2050 to reach the 1.5°C pathway, which is equivalent to around 7-9 billion cubic metres (m3) of water as a direct input. Even if the estimated hydrogen demand were met with GH2 by 2050 (current estimates lie at 2/3), the production lifecycle’s water consumption footprint would only be a fraction of what other sectors are using today.

Most areas with high solar potential are struggling with water scarcity, a problem that climate change will further intensify in future. The treatment of wastewater or desalination of seawater could provide an additional freshwater source—particularly in Africa—but the latter requires substantial energy inputs. Since GH2’s original water input is released back into the environment through oxidation when it is turned into energy, there is a strong case to use it locally to produce green goods for export rather than exporting GH2 itself. Producing countries would thereby keep their domestic water resources. Any remaining water deficits could be met by renewable freshwater trade, e.g. from west, central and east Africa to north Africa or through GH2 partnerships, to adequately distribute renewable water and energy resources between countries4. The water challenge thus lies in balancing competing water needs for GH2 production and the communities already facing disproportionate climate change burdens.

Building new infrastructure for the GH2 transition implies competition for agricultural land which may impact local food supply and security. Additional land conflicts such as displacement, property devaluation or environmental degradation are likely to arise as well. As the spatial footprint of hydrogen production plants is relatively small compared with the production of required renewable energy sources, such as solar plants, wholistic strategies that consider all of the transition’s dimensions will need to be developed. On the one hand, the displacement of water and land use from agriculture to GH2 production may negatively affect food security. On the other, the establishment of a GH2 sector can contribute to food security by providing a low-carbon input for fertilizer production.

While GH2 is the least harmful of all hydrogen production pathways in terms of total externalities, it has non-negligible ramifications for ecosystem quality. This is mainly linked to upstream electricity sources: the manufacturing of crystalline silicon panels required for solar power, for example, is associated with harmful sulphur dioxide (SO2) emissions7. Hence, reducing solar panels’ resource requirements or finding alternative materials to produce them would improve their environmental performance (ibid). Likewise, a reduction of metal inputs (e.g. nickel, platinum and iridium) in electrolysis technologies could mitigate their impact on the environment8, as would the improvement of the currently very low process efficiency of solar PV electrolysis9. A sustainable hydrogen strategy must therefore prioritize research, innovation and material efficiency. Another area of concern is hydrogen leakage along the supply chain: when emitted into the atmosphere prior to combustion, hydrogen contributes to climate change by prolonging the lifetime of greenhouse gases (e.g. methane, ozone and water vapor), undermining the GH2 transition’s purpose10. The development and use of national GH2 risk assessments can help to minimise and control leakages.