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Today, most countries are at the strategy stage and have yet to move to concrete policy measures. Explicit capacity targets for electrolysis are the most common measure for green hydrogen and have been the norm across Europe (see below). Specific policy instruments to achieve those targets will only be crafted over the coming months. For example, Japan was one of the earlier supporters of hydrogen and has already translated its strategy into concrete cost and efficiency targets per application. Japan also already has multiple projects underway for international trade in hydrogen (import is a large part of their strategy) with the first liquid hydrogen ship having been delivered in December 2019 and the first blue ammonia (i.e. ammonia from gas reforming with CCS) shipment in September 2020. Meanwhile, Australia and Chile have opted for ambitious cost targets instead. Australia has launched the “H2 under 2” target (production cost below AUD 2/kg of hydrogen), which has already triggered AUD 370 million in State support (see below) and consideration in the country’s Technology Investment Roadmap, while Chile has set a target of USD 1.5/kg of hydrogen by 2030, aiming to become the cheapest in the world. Beyond capacity and cost targets, other possibilities are available to governments, including incentives for the domestic production of electrolysers (e.g. tax breaks), direct grants, conditional and convertible loans, feed-in tariffs, auctions and contracts for difference, amongst others. Nevertheless, these have insofar been limited in the strategies announced. IRENA has explored trade-offs to consider the design of these policy instruments in a separate publication (IRENA, 2020d). The most ambitious strategies for green hydrogen are in the European Union (EU). The EU as a whole has a target of 40 GW4 by 2030, which is supported by national targets from France, Germany, Netherlands, Portugal and Spain. These targets are 6.5 GW, 5.0 GW, 3.0-4.0 GW respectively. The EU strategy also sets a target volume of 10 million tonnes of hydrogen per year (MtH2/year) by 2030, which would require 40 GW of electrolysis in neighbouring countries (North Africa). Beyond the EU plans, Chile has a target of 25 GW by 2030 and Australia has multiple multi-GW proposals ongoing. Both countries are aiming to satisfy local demand in the early stages of development, targeting exports in the long term. Adding up these three targets for electrolysis would already be enough to satisfy the 2030 target of 100 GW in IRENA’s Planned Energy Scenario. This is, however, not yet compatible with a wellbelow 2°C trajectory, which would require at least 270 GW of capacity deployed by 2030 — as outlined in the Transforming Energy Scenario (TES – see Figure 3). The TES scenario still has about 9.5 gigatonnes of carbon dioxide (GtCO2) of remaining emissions in 2050. Going further, a net zero world by 2050 would require an even larger role for hydrogen and a faster pace of deployment. On a positive note, 14 of 17 strategies already focus on green hydrogen by 2030, while only the EU (and several of its member states), Chile and Australia set specific electrolysis targets. Therefore, the large gap before the more ambitious scenario could be rapidly closed once the other countries that support green hydrogen set specific targets for electrolysis capacity. Indeed, the translation of hydrogen production targets into specific electrolyser capacity targets for green hydrogen production is an important element of a national hydrogen strategy. This give the right signal for industry to invest in electrolyser manufacturing plants, while showing the means by which such targets can be achieved (i.e. government policies), which are a necessary condition to meet policy targets for green hydrogen. Electrolyser costs will benefit from global deployment, which calls for coordinating national efforts through international platforms to ensure that lessons are being transferred from one country to another. Just as importantly, green hydrogen production requires significant additional renewable electricity generation, which also requires investment in manufacturing capacity for renewable power generation. SCALING UP ELECTROLYSERS TO MEET THE 1.5°C CLIMATE GOAL 4 Capacities for electrolysers are based on hydrogen output, throughout this report. 21PDF Image | GREEN HYDROGEN SCALING UP ELECTROLYSERS
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