BRAZIL, NAMIBIA, SOUTH AFRICA
The Green Hydrogen Economy: Challenges and Opportunities for National Development
The growing energy demands of the global economy are worsening the climate crisis, prompting countries to enact policies for decarbonization since the 2015 Paris Climate Agreement. These policies emphasize sustainable energy solutions to reduce fossil fuel dependency and align with the Sustainable Development Goals.
Green hydrogen (GH2) has emerged as a promising renewable energy solution, especially for sectors especially for sectors with hard-to-reduce emissions. The estimated global demand for hydrogen is 510 million tonnes annually, with 60% from renewable sources, making it a viable alternative for conventional fuels in transportation, industry, and agriculture. Countries with abundant renewable resources like Brazil, South Africa, and Namibia can offer competitive hydrogen prices. In contrast, nations like Germany, with high energy needs and limited renewable capacity, are investing heavily in GH2 and seeking international partnerships to secure a sustainable energy supply.
This study evaluated the impact of green hydrogen on the Sustainable Development Goals (SDGs) in Brazil, Namibia, and South Africa. The analysis used simulated scenarios that considered country-specific conditions such as electricity capacity and water availability to offer insights into the benefits of green hydrogen for national growth and to assist these countries in their green hydrogen initiatives.
Key Policy Insights and Recommendations
Implementation of a green hydrogen economy has the potential to improve Brazil’s performance SDGs by 2% by 2050. Additionally, it could lead to a 10% reduction in greenhouse gas (GHG) emissions and potentially lower the unemployment rate to 6%.
Increased investment in education is essential for growth of the green hydrogen sector and to tackle persistent underinvestment impacting SDGs 3, 4, and 10.
Brazil can further strengthen its sustainable transition by investing in climate adaptation, upgrading infrastructure, and promoting reforestation. Gradually reducing subsidies for green hydrogen and fertilizers can also contribute to this effort.
Simulations show that robust green hydrogen investments can significantly improve 14 out of 17 SDGs compared to no investment.
High shipping costs hinder the export of green ammonia from Namibia, but subsidies and carbon prices of around USD 200/ton could make it viable.
Exploring regional markets, blending requirements, and certification systems for supply chains could further strengthen Namibia's green hydrogen sector.
South Africa largely remains off track to achieving the SDGs. A green hydrogen policy could boost achievement by 2%.
Green hydrogen can replace fossil fuels, especially in coal-based sectors, to promote decarbonization in South Africa.
While green hydrogen enhances energy resilience, it is also vital to address energy disruptions and integrate synergistic policies for decarbonization.