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As the world races towards net-zero emissions, renewable hydrogen is emerging as a critical energy carrier to decarbonize hard-to-abate sectors like steel, heavy transportation, and chemicals. However, not all regions have equal access to low-cost renewable energy for hydrogen production. This raises a key question: Should countries prioritize self-sufficiency in hydrogen production possibly at a higher cost, or would international trade create a more efficient and economically beneficial global hydrogen market?
Our latest research, published as an open-access paper in the International Journal of Hydrogen Energy, explores this question through a novel market equilibrium model that simulates global hydrogen trade scenarios for 2050. By analysing hydrogen supply, demand, and trade flows under different policy constraints, we uncover key insights that could shape the future of renewable hydrogen markets.
Key Findings
- 1. Hydrogen Demand and Trade Potential In a scenario where hydrogen trade is unrestricted, global hydrogen demand could reach 234 Mt by 2050, with 31% of it met through international trade. This aligns with estimates from organizations like the International Renewable Energy Agency (IRENA), which predicts that around 25% of global hydrogen production could be traded across borders.
- 2. Major Hydrogen Trade Routes Our research identifies three dominant trade routes:
- North Africa to Europe (via pipelines and liquefied hydrogen shipping)
- The Middle East to Developing Asia (using liquefied hydrogen)
- South America to Japan and South Korea (predominantly via ammonia shipping)
These trade flows highlight the potential for hydrogen-exporting countries with abundant renewable resources—such as Morocco, Chile, and Argentina—to supply hydrogen to energy-importing nations with high demand but limited production capacity.
- Economic and Market Implications
- In the unrestricted trade scenario, consumer benefits outweigh producer benefits, indicating that hydrogen trade leads to lower prices for consumers.
- However, a regional independence scenario—where countries prioritize domestic hydrogen production—results in supply shortages in regions like Japan and South Korea, and a 12.7% reduction in global hydrogen demand.
- Pipeline transport dominates regional markets
4. Investment Needs for a Global Hydrogen Economy Developing a global hydrogen trade network requires an estimated $6.8 trillion in cumulative investments by 2050. The largest share (57%) will go toward hydrogen production, while shipping infrastructure alone would require $1.6 trillion to enable long-distance trade.
Figure 3. Cumulative investments required to develop a global hydrogen economy by 2050 across both scenarios; source: [1]
What This Means for Policymakers and Investors
- For Exporting Countries: Countries rich in renewable resources can gain significant economic benefits by positioning themselves as hydrogen exporters. Policies that support infrastructure development, such as hydrogen ports and pipelines, will be key in enabling this.
- For Importing Countries: Ensuring secure and cost-effective hydrogen imports will require strategic trade agreements and investment in shipping and conversion technologies.
- For Investors: Hydrogen trade represents a multi-trillion-dollar opportunity, with significant potential in renewable energy projects, electrolysis technology, and transport infrastructure.
Conclusion: A New Era for Energy Trade?
Our findings suggest that international hydrogen trade can unlock major economic benefits, enhance energy security, and accelerate decarbonization efforts. However, achieving this requires coordinated policy efforts, infrastructure investments, and market mechanisms that ensure competitive pricing.
To explore the full details of our research and methodology, check out the published paper here: Renewable hydrogen trade in a global decarbonised energy system
Authors: Khalid Alanazi, Shivika Mittal, Adam Hawkes, Nilay Shah
Reference:
[1] Alanazi, K., Mittal, S., Hawkes, A., & Shah, N. (2025). Renewable hydrogen trade in a global decarbonised energy system. International Journal of Hydrogen Energy, 101, 712–730. https://doi.org/10.1016/j.ijhydene.2024.12.452