The report, Global hydrogen trade to meet the 1.5oC climate goal, has said that 25% of global green hydrogen demand could be satisfied with international trade through pipelines and ships.

IRENA has predicted investments needed for global hydrogen production and infrastructure could reach up to $4 trillion between 2020 and 2050.

However, it adds, to make hydrogen trade cost-effective, production and trading costs of green hydrogen must be lower than domestic production to offset higher transport costs.

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With the costs of renewables falling and the global hydrogen potential exceeding global energy demand, three-quarters of the global hydrogen could still be produced and used locally in 2050, with hydrogen markets and trade routes are likely to be more diverse, regional and less lucrative than current oil and gas markets, the report said.

Francesco La Camera, Director-General of IRENA, said, “Having access to abundant renewables will not be enough to win the hydrogen race, it’s also necessary to develop hydrogen trade.

“It is true that hydrogen trade can offer multiple opportunities for countries from decarbonising industry to diversifying supplies and improving energy security. Today’s energy importers can also become the exporters of the future.”

“But governments must make significant efforts to turn trade aspirations into reality. A mix of innovation, policy support and scaling up can bring the necessary cost reduction and create a global hydrogen market. Whether trade potentials can be realised will strongly depend on countries’ policies and investment priorities and the ability to decarbonise their own energy systems.”

IRENA’s latest report suggests that half of hydrogen in 2050 could be traded through existing gas pipelines, with costs at $0.10 per kilogramme per 1,000km by mid-century, although predicts ammonia shipping will be the dominant form of intercontinental hydrogen trade.

The report also predicts that 85% of pipeline-enabled hydrogen trade will be focused in Europe with Latin America bolstering the other 15%.

The IRENA report, Geopolitics of the Energy Transformation: The Hydrogen Factor found that hydrogen could cover up to 12% of global energy use by 2050.

Read more: IRENA: Green Hydrogen cold disrupt global trade and bilateral energy relations