Green Hydrogen is a game-changer as the globe moves closer to net-zero emissions, especially for the Global South. Green Hydrogen could drive the energy transition, according to the International Renewable Energy Agency (IRENA). Green Hydrogen, produced by electrolysis using renewable energy sources like the sun and wind, promotes sustainable industrialization, energy independence, and economic diversification, while also decarbonizing hard-to-abate industries such as steel, chemicals, and heavy transportation.

According to IRENA’s 2025 analysis, resource-rich emerging nations may become major players in a multi-trillion-dollar sector by 2050 if green Hydrogen and its derivatives, such as ammonia and methanol, could supply up to 20% of the world’s Hydrogen needs through international commerce. By converting plentiful renewables into exportable commodities and promoting both local development and global climate goals, this change has the potential to close the energy gap.

What Is Green Hydrogen and How Does It Drive the Energy Transition?

Using electrolyzers that are solely powered by renewable energy, green Hydrogen is produced by splitting water into Hydrogen and oxygen with no carbon emissions, and Green Hydrogen could drive the energy transition. Unlike grey Hydrogen produced from fossil fuels, it serves as a flexible energy transporter and feedstock, enabling decarbonization in industries such as shipping, aviation, and high-heat sectors where electrification is challenging. In line with the Paris Agreement, IRENA highlights its contribution to the 1.5°C route, which could lower global CO₂ emissions by up to 10% by 2050.

Green Hydrogen could drive energy transition as it serves as a link between carbon-intensive industries and abundant renewable energy sources in the energy transition. It stores excess renewable energy and makes long-distance transportation possible through derivatives like e-methanol for fuels and ammonia for fertilizers. By 2050, the world’s demand is expected to exceed 260 million tonnes of hydrogen equivalent (Mt H₂-eq), with derivatives accounting for a sizable portion because they are simpler to handle.

This adaptability has spurred global debates, and by the end of 2024, 56 nations will have adopted hydrogen policies, with an emphasis on speeding up adoption to reduce dependency on fossil fuels. In addition to lowering emissions, this also means energy security for the Global South because home production may take the place of imported fuels, increasing resistance to price fluctuations.

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How Can the Global South Leverage Its Renewable Potential for Green Hydrogen Production?

Due to its abundant solar and wind resources, the Global South is positioned as an “essential player” in the green hydrogen markets, with the ability to export to markets with strong demand, such as Europe and Asia. Low-cost renewable energy sources enable nations to manufacture Hydrogen at competitive prices, thereby boosting economic growth through job creation in exports and manufacturing. For example, Latin America can become a significant supplier of ammonia, e-methanol, and direct reduced iron (DRI), aiming to reach markets in North America, Europe, and Asia, by combining its solar and wind resources with its current infrastructure.

Strategic location and land availability allow Sub-Saharan Africa to use Hydrogen domestically for electricity and fertilizers while exporting to Europe and Asia. By 2050, North Africa, which is close to the EU, may provide 18% of Europe’s demand for green Hydrogen by exporting up to 9 Mt H₂-eq yearly, which would include 3.2 Mt of compressed Hydrogen and 5 Mt of ammonia. Overall, IRENA predicts that in scenarios with equitable funding, the Global South may dominate exports, lowering energy poverty and increasing GDP through value-added sectors. By giving local electrification equal weight with exports, this leverage reaches the realm of sustainable development and is in line with the SDGs.

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What Investments and Infrastructure Are Required to Realize This Potential?

With IRENA projecting that the global hydrogen value chain will cost $2.49 trillion by 2050, unlocking the promise of green Hydrogen will need significant investments. With an emphasis on generation (46% of expenses), electrolyzers (20%), and conversion plants (19%), this comprises 4.7 TW of renewable capacity, 2.1 TW of electrolyzers, and 0.9 TWh of battery storage. Infrastructure in the Global South needs to expand quickly, constructing pipelines for regional trade and refurbishing ports for ammonia shipment.

To reduce the weighted average cost of capital (WACC) in developing regions—where high financing costs now impede competitiveness—policy support is essential. This support includes international collaboration, carbon pricing, and subsidies. Trade infrastructure, such as specialized shipping fleets, will enable the international meeting of 20% of global demand (53 Mt H₂-eq), with commodities like ammonia accounting for 30–35% of trade due to lower transportation costs. These investments could result in economic diversification and the creation of millions of jobs in the Hydrogen and renewable energy industries for the Global South.

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What Challenges and Opportunities Await in Developing Green Hydrogen Markets?

High upfront costs are one of the challenges; electrolyzer prices must decrease by 80% by 2030 in order to be viable, and financing discrepancies exist, with Global South countries facing WACCs that are two to three times higher than those of industrialized nations. Risks include supply chain weaknesses, policy gaps, fairness concerns (ensuring exports don’t compromise local energy access), and the need for global certification to prevent greenwashing. Trade flows may change due to geopolitical changes and competition from low-WACC exporters like the US and Australia.

There are many chances for sustainable manufacturing, and green Hydrogen can help the Global South diversify its economy and ensure energy security. Through exports and local value chains, it promotes collaborations for net-zero objectives, skill enhancement, and innovation, which might boost GDP by trillions. To overcome injustices and make Hydrogen a catalyst for a just transformation, IRENA emphasizes international cooperation.

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Frequently Asked Questions (FAQs)

Q1. What is the projected global demand for green Hydrogen by 2050?

With an emphasis on derivatives for efficiency, IRENA projects 260 Mt H₂-eq, of which 20% is satisfied through trade.

Q2. How much could North Africa contribute to Europe’s green hydrogen needs?

Up to 18% by 2050, using geographic proximity to export about 9 Mt H₂-eq yearly.

Q3. What are the primary obstacles to the development of green Hydrogen in the Global South?

Addressing policy gaps, high finance costs, and ensuring fair benefits without compromising regional energy priorities.

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