Global Green Hydrogen Trade Could Reach 53 Million Tonnes By 2050 – IRENA Report

The International Renewable Energy Agency (IRENA) has released a detailed analysis exploring the techno-economic potential for global trade in green hydrogen and related commodities like ammonia, e-methanol, and direct reduced iron (DRI) by 2050. The report evaluates potential trade flows using a cost-optimization model under two main scenarios: one where all countries have the same weighted average cost of capital (WACC) and another with country-specific WACC values. This allows for a deeper understanding of how both natural resource availability and financial conditions impact the global competitiveness of green hydrogen production and trade.

Under the Same WACC Scenario, where all countries have equal access to capital at a 5% rate, the primary drivers of competitiveness are resource quality and proximity to demand centres. Latin America, the Middle East, North Africa, and sub-Saharan Africa emerge as major exporters due to their abundant renewable energy resources. Europe, Japan, the Republic of Korea, and Southeast Asia are projected to be large importers, while countries like China, the United States, and India are relatively self-sufficient. In this scenario, nearly 30% of ammonia demand is expected to be met through trade, compared to 18% for methanol, 14% for DRI, and 14.4% for gaseous hydrogen. Most hydrogen is expected to be traded in the form of commodities, which are easier and more economical to transport.

In the Differentiated WACC Scenario, which takes into account country-specific financial risk and cost of capital, the trade dynamics shift. Countries with favorable financing conditions, such as Australia, China, and the United States, have become major exporters, even if they do not have the best natural resources. Europe’s reliance on imports is reduced due to increased cost competitiveness in local production. The share of DRI trade increases to 21% as production shifts towards stable economies, while methanol trade drops to 14% and gaseous hydrogen to 9%. Ammonia trade sees a slight increase to 35%.

According to the analysis, the overall volume of green hydrogen and related commodities traded globally in 2050 is expected to reach around 53 million tonnes of hydrogen equivalent per year, or roughly 20% of the total projected demand of 260 million tonnes. Trade in hydrogen-based commodities will dominate, accounting for 73–80% of total trade due to better transport economics compared to gaseous hydrogen.

A key takeaway from the study is that building the green hydrogen economy requires about USD 2.49 trillion in investments by 2050. This includes the development of 4.7 terawatts (TW) of renewable energy capacity, 2.1 TW of electrolysers, and 0.9 terawatt-hours (TWh) of battery storage. The largest share of investment will go into renewable energy generation (46%), followed by electrolysers (20%) and conversion plants (19%).

The report underscores the importance of stable policies, certification schemes, and international cooperation to realise the full potential of green hydrogen trade. While countries in the Global South hold significant promise due to their natural resource endowments, they will need access to affordable financing to become key players. With appropriate infrastructure and governance frameworks, green hydrogen trade can help meet decarbonisation goals, improve energy security, and contribute to economic growth and development, especially in developing nations.

The findings offer a blueprint for identifying strategic trade partners and investment priorities in the green hydrogen sector, aiming to support a just and inclusive global energy transition.