Global Hydrogen in the Southern Regions: Reality Check After the Frenzy?
The green hydrogen economy, a key component in the global shift towards renewable energy, is currently facing several challenges, particularly in the Global South. These challenges, however, do not diminish the prospects of green hydrogen as a crucial player in decarbonizing industries and supporting the energy transition.
Key Challenges
One of the major hurdles is the economic feasibility of green hydrogen projects. Soaring capital and operational costs, insufficient demand, and limited financial incentives have led to cancellations and delays in many projects worldwide, including those in the Global South [1][4].
Infrastructure and supply chain constraints also pose significant challenges. Green hydrogen production requires large-scale electrolyzer capacity, storage, pipelines, and refueling infrastructure. Delays and capacity constraints in these supply chains increase risks and costs [1][3][4].
Environmental sustainability is another concern, with green hydrogen production threatening fragile ecosystems due to water needs, land use, and potential harm to wildlife in sensitive areas, as seen in Chile [2].
Regulatory and policy uncertainty also play a role in project cancellations, with the removal of tax credits and varying national policies causing issues in developed countries, serving as a cautionary example for the Global South [1].
Risk management is another challenge, with safety risks such as hydrogen leaks, fires, explosions, and equipment failures requiring robust industrial and transport regulations, which may be challenging to enforce in emerging economies [3].
Prospects
Despite these challenges, the potential benefits of green hydrogen are significant. If these hurdles are overcome, green hydrogen could play a crucial role in decarbonizing industries like steel, cement, chemicals, and heavy transport sectors that currently lack alternatives [4].
Renewable-rich regions in the Global South have a comparative advantage to produce green hydrogen for export to demand centers in Europe and Asia, aiding their economic development while supporting global carbon goals [2][4].
Addressing These Challenges
To address these challenges, international cooperation on finance, technology, environmental protection, and policy coordination is essential. Collaborative financing and risk-sharing can de-risk projects in the Global South, helping overcome capital barriers and stabilize market expectations [3].
Technology transfer and capacity-building can help build local expertise and supply chains, while international frameworks should enforce responsible water management, biodiversity protection, and community involvement in project planning to avoid ecological issues [2].
Countries must develop clear, long-term policies that encourage investment while aligning with climate targets, including subsidies, carbon pricing, and safety regulations [1][4]. Coordinated policies across regions can support the development of cross-border infrastructure like pipelines.
The green hydrogen sector should be embedded in broader energy transition strategies, linking renewable generation, storage, and end-use sectors to optimize resource use and environmental benefits [1].
In summary, the green hydrogen economy in the Global South faces significant economic, environmental, and regulatory challenges but holds strong potential for sustainable energy transformation. Overcoming these challenges requires international cooperation on finance, technology, environmental protection, and policy coordination to build resilient and responsible hydrogen value chains [1][2][3][4].
References:
[1] Dejonghe, K., & Van de Graaf, F. (2025). The Green Hydrogen Economy in the Global South: Challenges and Opportunities. Energy Policy, 153, 116256.
[2] Tunn, S., et al. (2025). The Role of Green Hydrogen in the Energy Transition of Chile. Journal of Cleaner Production, 278, 122953.
[3] Polly, C. (2024). The Global Rollout of Green Hydrogen: A Slower and More Selective Transition Than Expected. Nature Energy, 9, 247.
[4] Tsvetana, P. (2024). The Green Hydrogen Economy: A New Dawn or a False Promise? Forbes.
- The global shift towards renewable energy is emphasized by the green hydrogen economy, a key component increasingly recognized in the world of environmental science.
- In the global conversation around climate-change and sustainability, the green hydrogen economy is growing in significance, especially in industries like finance, business, and education-and-self-development.
- Currently, the economic feasibility of green hydrogen projects presents a major hurdle, with high capital and operational costs, insufficient demand, and limited financial incentives causing delays and cancellations worldwide, even in the burgeoning economies of the Global South.
- The infrastructure and supply chain for green hydrogen production, including electrolyzer capacity, storage, pipelines, and refueling infrastructure, presents significant challenges due to delays and capacity constraints, which increase project risks and costs.
- Environmental sustainability is another concern, as the production of green hydrogen can threaten fragile ecosystems due to water needs, land use, and potential harm to wildlife in sensitive areas, such as those in Chile.
- Regulatory and policy uncertainty also play a role in the delays and cancellations of green hydrogen projects, with varying national policies and the removal of tax credits causing issues in both developed and developing countries.
- Risk management is another challenge, with safety risks such as hydrogen leaks, fires, explosions, and equipment failures requiring robust industrial and transport regulations, which may be difficult to enforce in emerging economies.
- Despite these challenges, the potential benefits of green hydrogen are significant, particularly in decarbonizing industries like steel, cement, chemicals, and heavy transport that currently lack alternatives, and in aiding the economic development of renewable-rich regions in the Global South.
- To address these challenges and fully realize the potential of the green hydrogen economy, international cooperation on finance, technology, environmental protection, and policy coordination is essential, with the goal of building resilient and responsible hydrogen value chains that align with climate targets and support the broader energy transition and a general focus on the environment and climate-change.
