The Effect of Hydrogen Energy on Global Economies

The Effect of Hydrogen Energy on Global Economies

Hydrogen (H2) is on the rise. From increased volume in its conventional applications to recent inventions unlocking additional uses, hydrogen is climbing higher on the radar for energy and fueling sectors.

The International Energy Agency (IEA) reports several key changes driving these trends:

1. Global energy demand is rising.
2. World demand for hydrogen has grown consistently year after year.
3. Several of the largest global economies have increased spending on their hydrogen industries.

These facts show that hydrogen has outgrown its dated reputation as a pilot project. Governments and companies have begun applying the alternative fuel to improve energy security, boost jobs, and reduce environmental pollution.

Hydrogen’s Economic Promise—And Disruption

Hydrogen energy accomplishes two major feats at once:

• First, it helps heavy industries slash greenhouse gas emissions.
• Second, it bolsters and protects energy economies from fluctuating oil and gas prices.

When a steel plant or freight line switches from coal or diesel to hydrogen power, it maintains local jobs by transitioning them to adjacent but cleaner operations.

That shift—though a net benefit for most—certainly shakes up the global fuel trade.

Nations that stay tied only to oil and gas could lose ground, much like coal exporters when natural gas took off. If these economic trends do translate to the hydrogen market, one lesson is clear: diversifying early is cheaper than catching up later.

Newly Emerging Export Economies

Electrolyzers—machines that use electricity to extract high-purity hydrogen from water—are unlocking new markets for sun‑soaked and wind‑rich regions.

Created by powering electrolyzers with other renewable energy sources, green hydrogen is gaining particular prominence due to its net-zero carbon footprint.

Many hydrogen export economies are leveraging ammonia (NH3) as a carrier for hydrogen due to its close chemical composition and easier shipping and storage properties. Thus, ammonia is closely interwoven with the hydrogen economy.

Those quick to join the hydrogen and ammonia markets include, but are far from limited to:

• Chile has secured over €200 million from the European Union (EU) and several private investment firms to develop a network of green hydrogen plants as part of a dual plan to bolster its economy and achieve net-zero goals.
• Namibia aims to create 250 thousand direct and indirect jobs in its hydrogen industry by 2040 through investments in renewable hydrogen and ammonia production. The small South African nation is already positioning itself for significant economic growth through exports and foreign investments. 
• Saudi Arabia is nearing its self-imposed 2026 deadline for the $8.4 billion NEOM clean hydrogen project with a planned daily production volume of 600 tonnes, all with electrolysis powered by wind and solar.

These deals promise a fresh wave of income similar to the oil booms of the past. For smaller nations, hydrogen could be a rare ticket onto the global energy stage.

Hydrogen’s Role in Energy Independence

For import‑heavy and high-demand nations, hydrogen energy is a viable safety net to conventional power infrastructure.

Japan targets shifting its energy supply to hydrogen, charting a gradual transition that culminates in using 12 million tonnes annually by 2040. The island nation plans to accomplish this through a mix of domestic projects and long‑term partnerships in Australia and the Middle East.

South Korea aims to establish a carbon-neutral economy by 2050, with goal posts for replacing 10.4 million tons of oil equivalents with hydrogen by 2040, backed by its world-leading fuel cell automotive industry.

In the United States, windy plains and sunny deserts could become green hydrogen powerhouses by following a similar track. Storing that extra power as hydrogen, then feeding it back to the grid later, turns potential waste into an energy reserve.

Infrastructure Investment And Global Competition

Announced hydrogen projects amount to approximately $570 billion through 2030, but only about 4 percent have broken ground. The holdup is not cash but paperwork, permits, and securing long‑term buyer partnerships.

The United States pushed projects over that hump with $7–8 billion in hydrogen hubs and a clean hydrogen federal tax credit. Europe’s €20 billion REPowerEU plan offers similar incentives, plus a “hydrogen bank” system to guarantee pricing stability.

Despite stiff competition, China is the current leader in clean hydrogen. Leveraging its sheer industrial scale, China accounts for approximately 50 percent of the world’s green hydrogen production capacity, at roughly 125,000 metric tons per year. The nation just opened a green ammonia plant planned for 320,000 mt/year by the end of 2025.

The countries currently turning plans into pipelines and pumps will have an early advantage in this burgeoning market.

Industry Transformation And Workforce Shifts

Proof is already on the factory floors.

Sweden’s project HYBRIT shipped the first fossil‑free steel for Volvo in 2021 and is moving toward full production in 2026. A competitor is already building a seven‑million‑tonne‑a‑year mill powered by giga-scale electrolysis.

Analysts expect clean steel could earn a 10 to 20 percent premium by 2030. Even oil giants are showcasing refinery alternatives. Shell runs a 10 megawatt green‑hydrogen unit in Germany, with a 100 MW upgrade underway. ExxonMobil is another with a strong hydrogen strategy, currently building a one‑gigawatt blue hydrogen plant in Texas.

New supply chains mean new careers—from hydrogen‑tank welders to truck mechanics trained on fuel cells. Forward-thinkers who invest in recruitment and retraining will get an early start gathering the best talent; those who don’t may lag behind as the hydrogen industry accelerates.

Mobility And Refueling Momentum

Transportation showcases the practical use of hydrogen. Currently, there are over 1,100 fueling stations operating worldwide, with the majority located in Asia.

Japan and South Korea are both working on developing new stations to support their fuel cell vehicle initiatives: Japan aims for 800,000 vehicles, while South Korea targets 6.2 million by 2040.

In California, there are 50+ public hydrogen stations, which increase to 70+ when including private and planned sites. The state has also approved a $1.4 billion plan for further expansion.

Additionally, the European Union has enacted a new rule requiring a hydrogen station to be available every 200 kilometers along major highways by 2030. These networks are essential for the operation of heavy-duty trucks, buses, and even hydrogen trains, which are already in service in Germany and Italy.

In short, as hydrogen stations continue to spread, hydrogen vehicles are expected to play a growing role in transportation systems.

Geopolitical Implications

Hydrogen is reshaping energy diplomacy.

One study estimates approximately 9 million tonnes of import demand, but only around 5 million tonnes of committed export supply by 2030. That mismatch offers stakeholders a strong bargaining chip, especially in early-stage deals.

Germany inked hydrogen pacts with Canada and Namibia; Japan partnered with Australian exporters; and Europe eyes a pipeline from North Africa.

Yet not all clean hydrogen is equal. Europe prefers “green” hydrogen made from renewables, while some Asian buyers accept “blue” hydrogen from gas with carbon capture.

Without common rules, shipments could face delays at customs or costly re‑certification. International bodies are racing to set fair, clear standards before trade hits full stride.

Challenges Still Ahead

Clean hydrogen still costs two to five times more than its fossil cousin, mainly because renewable power and equipment are pricey.

Three levers can pull prices down: cheaper solar and wind, mass‑produced electrolyzers, and bigger pipelines or storage caverns.

Solar auctions in Chile and Saudi Arabia now close below 1.5 cents per kilowatt‑hour, hinting that cheaper green hydrogen is on the horizon.

Gigafactories for electrolyzers in Texas, Norway, and Shanghai aim to push equipment costs down, much like solar panels a decade ago.

Still, banks need long contracts to lend; most developers require 10‑year or longer purchase agreements. Policymakers can help with price-support programs—such as Europe’s hydrogen bank—that guarantee revenue during scale-up.

FASTECH’s Role In The Hydrogen Economy

Global ideas need local builders. FASTECH has developed over 40 hydrogen stations across North America, from dealerships to depots, giving us advanced data on safety, uptime, and consumer demands.

Our hands‑on experience helps clients avoid missteps, so projects finish on time and on budget.

Hydrogen’s value is clear: cleaner air, steadier energy bills, and economic growth. Embrace the future of energy with FASTECH.