COP28 amplifies the need to build a working hydrogen economy
COP28 ended on a historical note on December 13, when the final version of the climate agreement expressed a need to transition away from fossil fuels.
While the wording is not binding, the result is still significant – this is the first time fossil fuels are specifically mentioned in the climate action agreement. Hydrogen was recognised as a flagship initiative at COP28 in order to keep global warming under 1,5 degrees.
How to get there with hydrogen
The hydrogen used in industrial settings at the moment is mainly not green, meaning it has not been produced with renewable electricity. There are also new ways to utilise hydrogen – for example, it can be used in steel production, which makes it especially important for the climate. Steel industry currently produces significant CO2 emissions worldwide, that could be cut to zero with green hydrogen.
Hydrogen Cluster Finland estimates that Finland could produce up to 14 % of the green hydrogen that Europe needs to decarbonize and create new economy. Germany has already announced it will need to import significant amounts of green hydrogen for its industrial needs – as Germany also wants to be carbon neutral by 2045.
Countries like Germany see Finland’s stable society, EU and Nato memberships, geographical distance and planned hydrogen pipelines as competitive advantages when deciding where to import hydrogen from. A fast permitting process, land availability, and a robust market for district heating further solidify Finland’s position in the clean energy landscape. Calculations made by McKinsey had the same conclusion as our strategy: Finland would be the most cost-competitive hydrogen importer for Germany. Now, the crucial next step is to amplify hydrogen demand.
Creating demand to accelerate investments
In Hydrogen Cluster Finland event at COP28, minister Anders Adlercreutz stated that Finland is ready for investments, and any company planning to invest in Finland can trust that there will be clean energy available. Additionally, we have clean water, biogenic CO2, stable society, excellent electricity grid, and hydrogen pipelines and a 100 billion investments in wind power already planned.
For Finland, it is currently important to create awareness. While this new agreement sets the world on the way to net zero greenhouse gas emissions in 2050, we have a more ambitious carbon neutrality goal of 2035, which we can achieve with the help of hydrogen economy. Hydrogen value chain requires significant investments and building supply and demand hand in hand. Finland could become a major exporter of either hydrogen or the more high-value derivatives and products. What we need for that to happen is off-take agreements, brave final investment decisions, fast permitting and supportive regulation.
Finland is ready to provide a perfect setting, Europe aspires to develop industries around green hydrogen, and other countries see Finland as a stable, affordable supplier with future pipeline connections to Baltics and central Europe. The decision where to produce hydrogen seems easy.
