G7 To Create Global Market For Clean Hydrogen

Hydrogen Sector 18.04.23
Written by: HYCAP

At a series of meetings in Sapporo, Japan, the G7 Climate Ministers have pledged to create a global market for clean hydrogen, which adheres to international standards.

The seven countries, which represent 40% of the world’s economic activity and a quarter of global carbon emissions, play a vital role in addressing climate change. However, their assistance to less affluent nations, which frequently experience the most severe effects of climate change while having limited resources to address them, is also crucial.

Consisting of the US, Canada, France, Germany, Italy, Japan, and the UK, and with the EU as a “non-enumerated member” in a joint statement, the ministers committed to establishing a transparent global market for clean hydrogen that relies on dependable international standards and certification schemes.

Japan, the third-largest economy in the world, which lacks sufficient energy resources, plans to achieve carbon neutrality by 2050 by utilising a combination of energy sources such as hydrogen, wind, and nuclear power.

However, a Japanese proposal to consider co-firing of ammonia in coal power plants as an eco-friendly solution was rejected by the G7, who stressed the need to prioritise clean hydrogen in the most challenging “hard-to-abate sectors”, i.e those proving hardest to decarbonise, such as heavy industry and transport.

Calling the meetings “really constructive” the U.S. Special Presidential Envoy for Climate John Kerry continued in an interview with The Associated Press that “I think the unity for the goal that was expressed of phasing out fossil fuels is a very important statement.”

The G7’s statement went on to highlight the exploration of low-carbon and renewable hydrogen derivatives in the power sector, provided they align with the 1.5°C pathway, and the goal of achieving a predominantly decarbonised power sector by 2035.

Pictured: Sapporo, Japan, which played host to the G7 meetings.

The hydrogen-shaped elephant in the room has often been the subject of cost. So reducing the cost gap between low-carbon and renewable hydrogen and its derivatives and fossil fuels is of great importance to the G7. This includes carrying out research, development, and demonstration, as well as creating supporting infrastructure. The objective is to establish a transparent global market and supply chains based on dependable international standards and certification schemes, while also adhering to environmental and social standards, such as avoiding water use conflicts.

The significance of establishing international standards and certification for calculating greenhouse gas emissions during hydrogen production, as well as creating mutual recognition mechanisms for carbon intensity-based tradability, transparency, trustworthiness, and sustainability, has also been underscored.

The G7 has welcomed the report by the International Energy Agency (IEA), “Towards Hydrogen Definitions Based on Their Emissions Intensity,” as a valuable contribution to the conversation about expanding low-emission hydrogen and its derivatives, and promoting a shared understanding, but also cautioned that divergent national standards for clean hydrogen could impede the development of international hydrogen trade.

The collective of Climate Ministers also agreed and emphasised that nations producing low-carbon and renewable hydrogen for both domestic consumption and export should reap the full benefits of their efforts, and continue to do all they can to promote its advancement.

The G7 rejected a proposal from Japan to consider co-firing of ammonia in coal power plants as an eco-friendly solution. (Pictured: Sapporo, Japan)

Furthermore, their statement highlights proposals to incorporate natural gas projects, which address market gaps and elevated prices resulting from Russia’s hostility in Ukraine, into national hydrogen strategies. The ministers underscored the need to narrow the cost disparity between clean hydrogen and fossil fuels through research, development, and infrastructure support while expediting the phasing out of coal-fired power.

Although advanced economies are experiencing a decline in emissions, they have historically contributed the larger share of global carbon. For instance, the United States alone has been responsible for around one-quarter of all global carbon emissions in history. In contrast, emerging markets and developing economies are currently accountable for over two-thirds of global carbon emissions.

The President-elect of the upcoming United Nations climate talks, COP28, who was present at the discussions in Sapporo, released a statement calling on the G7 countries to boost financial aid for developing nations’ switch to clean energy.

Sultan Al Jaber implored other leaders to collaborate in establishing a “new deal” on climate finance that would bolster endeavors to alleviate and adjust to the effects of climate change, while also supporting biodiversity conservation, particularly in developing countries.

“Not enough is getting to the people and places that need it most.” he said, “we must make a fairer deal for the Global South”.

He emphasised both that developed nations must honour their commitment made at the COP15 meeting in 2009, and all COP meetings since to provide $100 billion, and that the next round of climate talks is scheduled to take place in Dubai in late November 2023.

To learn more about HYCAP, click here.