It will be cheaper to produce green hydrogen in the EU than to ship it in, but the opposite will be true for renewable H2 derivatives such as ammonia, methanol and synthetic fuels, according to a new study from German think tank Agora Energiewende.

“When the end-use molecule is hydrogen, shipping from faraway lands such as Chile or Australia [where the cost of producing H2 will be low due to high solar irradiation] works out to be more expensive than if the hydrogen was produced locally in Germany, even with average renewables,” says the report, 12 Insights on Hydrogen.
“However, instead of cracking shipped ammonia back to hydrogen, using ammonia directly as a fuel could be cheaper than the local production of hydrogen, even in 2050.”
Shipping hydrogen will be roughly twice as expensive as importing it via pipeline, the study adds.
“In practice, then, opportunities for ship-based hydrogen trade will be limited to instances where pipelines are not ready or unfeasible due to, say, public opposition or distance (as in Japan) or politics.”
The report explains that it would therefore be necessary for the EU to import hydrogen via pipeline from neighbours such as North Africa and Ukraine — as the EU’s hydrogen strategy states.
“Depending on the pace of progress on a pan-European hydrogen pipeline network, by [the] 2030s the EU could be importing cheap renewable hydrogen from North Africa and from Ukraine,” the study explains.
“By 2050, North Africa, owing to its excellent solar potential, could be supplying just under half of [the] EU’s hydrogen demand at prices well below the European average – and at low transport costs due to pipelines. There is also space for Ukraine to supply similarly low-cost hydrogen to the EU.”
At the same time, however, it would be cheaper for the EU to import energy-intensive green hydrogen derivatives such as ammonia, methanol and synthetic e-fuels from far-flung places than to produce it domestically.
The report explains that because the sustainable synthetic fuels required for carbon-neutral shipping and aviation will need cheap sources of both green hydrogen and CO2 — captured via energy-intensive direct-air capture — countries with low-cost renewables will be able to produce it far more cheaply than nations with more expensive wind and solar power.
“Countries that have an advantage due to large quantities of cheap renewable resources, such as Argentina, Australia, Chile, the Arab region, Morocco and South Africa, will be the places to produce sustainable fuels for the world,” it says.
“The same holds also for some chemicals, such as ammonia and methanol. Importing sustainable methanol or synthetic fuels from places with cheap renewables is more cost-effective than producing them in Germany.”
Ammonia does not require CO2, but the Haber-Bosch process that combines nitrogen (captured from the air) with hydrogen is also very energy-intensive.
“To keep its industry competitive, the EU should access cheap hydrogen from its neighbours while importing renewable hydrogen-based synthetic fuels from the global market,” the report states.
For the full report, click here.