It is estimated that a real global hydrogen transition will need $15 trillion of total investment1. Green hydrogen needs green energy. The transition needs a huge increase in renewable energy generation – 85% of the total investment needs relate to this.

The remaining 15% come from investment in equipment and infrastructure: electrolysers, production facilities, and hydrogen transport and storage.

Given its early stage of development, the GH2 market needs encouragement to quickly and successfully scale up. This means further financial support mechanisms are needed to level out prices on the market for green goods compared to fossil-based intermediate and end-products.

Only a fraction of the required investment for the GH2transition will be directly financed by governments, with $70 billion committed to date. Private finance is absolutely necessary.

In this critical early period, governments nevertheless have a central role to play in making high-risk projects bankable, e.g. with grants, loans and guarantees. Through demand-side policies, government action can compensate for the current cost-gap to create the right market conditions for a GH2investment take-off.

The opportunity is too good to pass up. We need a worldwide investment offensive to find and secure this funding so that the environmental and economic benefits can be realized as soon as possible. UNIDO is working towards such funds mobilisation for GH2 projects.

Beyond the widely acknowledged benefits of a GH2 transition, UNIDO views it as an opportunity for new industrial development pathways and skills upgrading. This is especially true for developing countries, many of which are well-positioned to be GH2 producers due to their vast renewable energy potential. This is why UNIDO is channeling its support to those countries to unlock their GH2 potential.

Beyond the widely acknowledged benefits of a green hydrogen transition, UNIDO views it as an opportunity for new industrial development pathways and skills upgrading.

Agricultural sectors can also benefit from the production of green ammonia for carbon-neutral fertilizer products.

Industrialization opportunities come from “complete value chain manufacturing”, which includes production along the entire GH2 value chain, including the production of renewable energy hardware, electrolysers and GH2 derivatives. We can create GH2 industrial clusters, where renewable electricity generation, GH2 production and GH2up-takers are brought physically closer together for inter-reliance.

This is part of the approach we promote in UNIDO’s Global Programme for Green Hydrogen in Industry. With it, we entice the hard-to-abate downstream industries to set up near the clusters. This reduces the need for energy storage and transport. And it reduces pressure on electrical grid infrastructure.

Agricultural sectors can also benefit from the production of green ammonia for carbon-neutral fertilizer products, further enabling sustainable food production and improving local food security by reducing reliance on imports.

For a just GH2transition, we need to carefully manage resources and make sure the benefits are shared fairly. For example, areas with abundant solar energy potential are often arid and prone to water stress. The production of GH2 depends on water for electrolysis, even if the amounts needed are comparatively small (see chart below).

There must be oversight to avoid improperly diverting scarce water resources.

AgricultureIndustrialMunicipalDesalination production (2018)Hydrogen production (2050)06001,2001,8002,4003,000

Water quantity (cubic metres)

Notes: Water consumption footprint (in billion cubic metres) of Green Hydrogen in 2050 compared with selected sectors today. The footprint measure includes water consumption of required upstream energy generation. Figure considers only water consumption, not water withdrawals. Withdrawals cover water that is directly returned to the body of water from which it was taken. Consumption covers any water that is converted into another form or is not returned to the original body. Although most water can be recovered when hydrogen is combusted or used in a fuel cell, it is not generally returned to the original body of water and will be considered to be consumed.

Source: IRENA (2022).

Similarly, the energy required to process GH2should not come at the cost of the needs of the local population. Moreover, it is critical that the land needed for processing and storage should be fairly acquired.

Everyone involved must make sure that local communities benefit from GH2 infrastructure through appropriate skills development, job creation and better overall living standards.

A key step for the global uptake of GH2 is developing the necessary policy and legal frameworks and coordinating international standards. UNIDO is a ready partner in this, and we will collaborate with stakeholders around the globe, including public and private sector actors, financial organizations and academia.

UNIDO launched its Global Programme for Green Hydrogen in Industry in July 2021. It fosters GH2 use use to decarbonize industry and promote low-carbon industrial development around the world. The first pillar of the programme are global partnerships to engage in policy dialogue and develop knowledge products to help member states with any bottlenecks identified and also to ensure that the GH2 transition is a fair one within each country we extend our support to.

We create technical guidelines and standards, develop joint projects and promote the adoption of innovative financing schemes.  Throughout, UNIDO collaborates with public and private sector, financial organizations, and academia to ensure input from all stakeholders and along the GH2 value chain.

The programme’s second pillar consists of a technical cooperation component to help the production and uptake of GH2for industrial applications through the design and implementation of national industrial GH2 roadmaps.

I can see the results in pilot projects such as the International Hydrogen Energy Metallurgy and Chemical Demonstration Zone in Inner Mongolia. It is the world's first comprehensive demonstration project on GH2 production. It also has applications for the metallurgical and chemical industries, initiated by UNIDO’s International Hydrogen Energy Centre (IHEC) together with its partners Shuimu Mingtuo Group and Hualu Group.