Briefing for policymakers: green hydrogen as fiscal stimulus
Brian O’Callaghan and David Tritsch
September 2020 in Smith School Briefing Paper 20-03
COVID-19 economic recovery spending has brought an unprecedented acceleration in support for green hydrogen. Asymmetric investment will allow early movers to shape the future competitive dynamics of global hydrogen technologies and trade. Nations with strong natural resource endowments who fail to invest now risk losing a degree of potential long-term global market power, and with it, future jobs, and growth.
Green hydrogen is a burnable gas produced using two major inputs: water and renewable electricity. As a store for renewable energy, green hydrogen could enable the decarbonisation of energy supply, as well as several hard to abate sectors (e.g. aviation, shipping), possibly through ammonia and/or synthetic electro-fuels.
Without a path to affordable green hydrogen there is currently no viable way of decarbonising a large portion of the global economy. Fortunately, cheaper renewables and lower electrolysis CAPEX have substantially decreased green hydrogen production costs. These trends are likely to continue, with the rate of cost fall directly influenced by global investment spending.
Suggested Citation: O’Callaghan, B. and Tritsch, D. 2020. Briefing for Policymakers: Green Hydrogen as Fiscal Stimulus. Smith School Briefing Paper 20-03.