Renewable energy experts, non-governmental organisations, and other stakeholders have urged the Nigerian government and private sector players to tap into the growing opportunities in green hydrogen production, especially now that many countries who are major importers of Nigerian crude oil have set deadlines to decarbonize.
The counsel was given last week in Abuja, the Federal Capital Territory, at a capacity building workshop which focused on “Opportunities, Risks and Emerging Issues for Green Hydrogen Production in Nigeria”. The workshop was part of the sensitization programmes of Heinrich Boll Stiftung towards highlighting the risks energy dependent nations such as Nigeria will face when North American, European and Asian countries who are the buyers of Nigerian crude decarbonise, with some countries starting as early as 2025.
Heinrich Boll Stiftung, a German, legally independent political foundation affiliated with Alliance 90/The Greens, in a presentation at the event said unlike in some other African countries, green hydrogen production in Nigeria is still in its infancy as there have not been any major investments in production facilities.
“However, the Nigerian private sector is demonstrating interest, while the government is moving towards the development of a green hydrogen strategy. This means that although the idea of green hydrogen production in Nigeria is still in the abstract, the time is now for interested stakeholders to start shaping the emerging green hydrogen industry,” Heinrich Boll stated.
“Green hydrogen production and related exports not only offer the potential to make up for projected revenue shortfalls in the oil and gas sector as the global energy transition picks up pace, but could also enable Nigeria to realise its ambition to close the domestic energy gap and achieve some of its development goals. However, none of this comes without risks, trade-offs and pitfalls,” it added.
The global green hydrogen market was estimated at $4.02 billion in 2022, and it is expected to grow at a CAGR of 55% to $332 billion from 2023 to 2032, according to Precedence Research. The World Bank also stated that the demand for hydrogen was 87 million metric tons in 2020, and it is expected to grow to 500 million to 680 million metric tons by 2050.
The capacity building workshop, a hybrid event, was attended physically by Gina Elisa Lagunes Díaz, head of the German-Nigerian Hydrogen Office, who also was one of the facilitators; Ifeoma Malo, chief executive officer, Clean Tech Hub; Nnimmo Bassey, executive director, Health of Mother Earth Foundation; Dr Godwin Uyi Oji, Environmental Rights Action; Oteheri Akinruntan, PIND; Umoh Isua-Ikoh, Peace Point Development Foundation, and Oghenegare Emmanuel Eyankware, an environmental policy analyst.
Others were Mujidah Ajibola, The Sustainability Hub; Paul Ogwu, Institutional and Sustainable Development Foundation; Sulaiman Arigbabu, HEDA Resource Centre; Bathsheba Tagwai, CISLAC, and Ewa Chidinma, International Centre for Energy, Environment and Development(ICEED).
Facilitators who joined virtually were Jörg Haas, head of International Politics Division, Heinrich Böll Foundation, Berlin; Gabriela Cabaña, PhD candidate, London School of Economics, and Delia Villagrasa, who is the author of “Green hydrogen – Key success criteria for sustainable trade & production”.
Lagunes Diaz said there is a growing momentum of global decarbonization drive with many countries set to ban new cars with internal combustion engines and have equally set for themselves net zero targets. The United States, for instance, will implement the former by 2040 and the latter by 2050. In addition, US hydrogen policy and projects have reached an advanced stage.
European countries will begin to ban the use of new cars with internal combustion engines between 2025 and 2045 while some have their H2 policy and projects at an advanced stage. China and India will implement net zero targets by 2060 and 2070, respectively.
“There are misconceptions about green hydrogen. First, we have to know that it is an industrial product that is expected to be used by industries as doing so will enhance their competitiveness. Second, it is difficult to export hydrogen. Therefore, the essence of encouraging Nigerian investors to key into these opportunities is not because we wanted to export it to Germany, rather, it is to enhance Nigeria’s competitiveness,” Lagunes Diaz said.
She said the energy transition which has already started across the world will affect fossil fuel producers such as Nigeria, noting that total oil and gas revenues are projected to fall significantly by 2050.
According to her, the global trade involving commodities such as crude oil, electricity, methanol, gas and coal was worth $1.5 trillion in 2020, with crude oil accounting for the largest chunk of the trade. However, this structure has been projected to change by 2050 even as the global trade in those commodities has been projected to hit $1.6 trillion.
By 2050, bioenergy is expected to account for about 40 percent of the global trade in those commodities, followed by electricity, hydrogen, crude oil, ammonia, gas and methanol in that order.
She suggested that oil and gas producing countries should leverage the established energy export infrastructure, have a skilled workforce and utilise the existing energy trade relations to benefit from green hydrogen production.
She described Nigeria’s green hydrogen potential as ranging from 155.10 terawatt per hour per year if hydrogen production is just one percent of Nigeria’s potential to 15,510.08 terawatt per hour per year if the country taps its potential by 100 percent.
To attain any of the projections above, Nigeria must address poorly designed strategy and governance framework, inadequate infrastructure, low domestic demand for hydrogen, no certifications and standards, as well as low level of human capital and technology.
Jörg Haas identified the different forms in which hydrogen exists. According to him, there is green hydrogen which is produced by electrolysis of water, using electricity from renewable sources like hydropower, wind, and solar, resulting in zero carbon emission; pink/purple/red hydrogen which is a product of electrolysis using nuclear power; turquoise hydrogen produced through thermal splitting of methane instead of CO2, leading to the production of solid carbon; and black/grey hydrogen produced from natural gas using stream-methane reforming.
There are also yellow, blue, white and brown hydrogen, but green hydrogen constitutes about 0.03 percent of the global energy mix, Haas said.
“Hydrogen and derivatives are necessary for the decarbonisation of ‘hard to abate’ sectors like heavy industry, fertilizer, aviation, shipping, etc. With the 2050 deadline for net zero emissions and long lead times and investment cycles, these sectors now come into focus,” he said.
Gabriela Cabaña identified key opportunities to include attainment of climate change targets if used in sectors that are difficult to electrify, transfer of technological know-how, new investments in renewable energy, energy infrastructure, diversification of energy production, less air pollution, among others.
“Production and trade of green H2 must be embedded in a country’s overall development, energy and trade strategy to benefit all, and be integrated into a comprehensive energy transition which includes compatibility with the UN Sustainable Development Goals (SDGs) and the country’s Climate Change Strategy (NDC),” Cabana said.
In her presentation, Ifeoma Malo said green hydrogen could be a potential source of foreign direct investment for developing countries that have the potential for its production. The FDI could boost the GDP of sub-Saharan African countries by between 6 and 12 percent, she said, adding that the development will lead to the creation of direct and indirect jobs and greater access to electricity.
“Fossil fuel companies may lock in policies for blue hydrogen to prolong the lifespan of their existing assets,” she said.
Malo listed areas of possible conflict to include land conflicts, foreign exploitation, safety and hazards, among others.
