Green hydrogen surges as nations bet big on decarbonisation despite hurdles
Countries worldwide are accelerating investments in green hydrogen as part of broader climate strategies. Recent national plans from Germany, the US, Australia, and others highlight its role in decarbonising industries where electrification remains difficult. Meanwhile, India faces fiscal and governance challenges, from high interest payments to delays in state legislation approvals, alongside efforts to adapt to extreme heat through targeted action plans.
Green hydrogen has gained momentum as a key tool for reducing emissions in hard-to-electrify sectors. Unlike renewable energy sources, it serves as an energy carrier rather than a primary power supply. However, its large-scale adoption is hindered by storage and transport limitations. Despite these hurdles, major economies are pushing forward with ambitious projects.
Germany updated its National Hydrogen Strategy in 2023, committing €9 billion, including the H2Mare project—a 1 GW offshore electrolysis facility set for 2026. The US allocated $7 billion through its H2Hubs program, with the ARCH2 hub in Appalachia receiving $925 million. Australia's Hydrogen Headstart initiative, backed by AUD 1.5 billion, supports projects like the 50-GW Western Green Energy Hub. Saudi Arabia's NEOM Green Hydrogen plant, scaling to 4 GW, aims to produce 650 tonnes daily by 2026. Japan's Green Innovation Fund earmarked ¥2 trillion for hydrogen, while the UK's £240 million Hydrogen Allocation Round 1 and the EU's REPowerEU plan (€300 billion) further underscore global commitment.
On climate governance, the Paris Agreement's Global Stocktake assesses collective progress to guide future action. Heat Action Plans, another adaptation measure, target the health and economic risks of extreme heat.
In India, fiscal constraints persist despite revenue growth, with high interest payments limiting budget flexibility. The FRBM framework allows adjustments during economic shocks, but indefinite delays by governors in approving state laws risk weakening federal principles. Their discretionary powers remain narrow and tied to specific contexts. Additionally, semiconductors are now a strategic priority due to their dual-use in civilian and defence technologies, compounded by concentrated global supply chains.
The push for green hydrogen reflects a global shift toward cleaner energy, though logistical barriers remain. Countries are investing heavily, with projects like Germany's H2Mare and Saudi Arabia's NEOM facility leading the way. In parallel, India grapples with fiscal pressures and legislative delays, while climate adaptation efforts, such as Heat Action Plans, address immediate environmental threats. These developments signal both progress and ongoing challenges in energy transition and governance.
