PBL Netherlands Environmental Assessment Agency
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The Green Hydrogen Dilemma: risks, trade-offs, and co-benefits of a green hydrogen economy

The global energy landscape is going through a profound transition towards sustainability to combat climate change and reduce dependence on fossil fuel. Hydrogen, particularly green hydrogen produced from renewable sources, is emerging as a promising alternative to fossil fuels. European nations with high energy demand but limited renewable resources are exploring green hydrogen imports from low- and middle-income countries. Investing in a green hydrogen economy offers opportunities but also poses challenges.

This policy brief discusses frequently mentioned risks, trade-offs, and co-benefits of establishing a green hydrogen economy in low- and middle-income countries. We discuss water use in the hydrogen industry that could exacerbate water scarcity and large land requirements of the renewable energy and associated infrastructure that could potentially compete with other land use as potential risks and trade-offs. Other potential risks and trade-offs discussed here include the climate implications of hydrogen leakage and diverging investments from other climate change mitigation measures such as renewable energy, energy efficiency, and sustainable land use practices. 

Figure 1.
The hydrogen economy and associated risks, trade-offs, and co-benefits

Provided that the risks are mitigated, a green hydrogen economy can provide several co-benefits to other development goals. It can contribute to reducing air pollution that improves health and well-being and enabling green industrialisation to fuel economic development. It can also promote local green fertilizer production that could improve food security, and facilitate energy access through technology learning, offering reliable storage, and generating additional revenue for electrification programs. Other co-benefits include supporting water supply system by oversizing the desalination system, and creating decent jobs across various sectors, from renewable energy generation to manufacturing, transportation, and research and development.