Fraunhofer Institute for Systems and Innovation Research ISI
Fraunhofer Institute for Systems and Innovation Research ISI

Project

H2-diplo - Decarbonization Diplomacy - The role of green hydrogen in the energy transformation of fossil fuel exporters

This project aims to provide support to fossil fuel exporting countries in understanding the potential impacts of declining demand for fossil fuels in the context of the goals of the Paris Agreement. In addition, it specifically explores the role of green hydrogen as a potential catalyst for sustainable economic development in these countries, independent of fossil fuel exports.

 

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The Paris Agreement’s goal of limiting global warming to under 2°C has led many countries to adopt decarbonization strategies in pursuit of climate neutrality. This shift poses significant challenges, in particular, to countries that are heavily dependent on the export of fossil-fuels. These nations must transition to clean energy carriers to maintain their fuel trade relationships with demand centers such as the EU and East Asia. Thus, green hydrogen produced from renewable energy emerges as a compelling alternative to both sustainably manage their energy sector and compensate for some of the economic losses resulting from a declining global demand for fossil fuels in the future.

Further information

Further information on the overall context of the IKI project can be found on the official project website H2-diplo Decarbonization Diplomacy

 

 

This study aims to help understanding how countries that are currently heavily dependent on fossil fuel exports could be affected in the future by a decreasing demand for fossil fuels and the resulting loss of export revenues as well as other related macroeconomic effects. In addition, it analyzes how the expected global demand for carbon-neutral green hydrogen and its derivatives (such as green ammonia and methanol) could promote sustainable economic development and diversification and thus compensate for some of the losses in the fossil fuel sector. To this end, the study examines the three exemplary case study countries Saudi Arabia, Kazakhstan and Nigeria.

 

Duration

April 2023 - February 2024

Client

  • The work was commissioned by the project „H2-diplo Decarbonization Diplomacy“, via Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), funded by the German Federal Foreign Office through the International Climate Initiative.