The Iran war has done in two months what years of climate policy could not: make green hydrogen look economically viable.
Soaring oil and gas prices since February’s outbreak of hostilities have narrowed the cost gap between the zero-emission fuel and its fossil rivals, paving the way for wider uptake across Asia.
The eight-week
US-Israeli war on Iran, Tehran’s closure of the Strait of Hormuz and Iranian strikes on Qatar’s Ras Laffan liquefied natural gas (LNG) complex have sent Asian fuel prices to three-year highs and sharpened policymakers’ concerns over energy security.
“The war-driven surge in oil and gas prices is narrowing the cost gap between grey and green hydrogen, creating conditions for greater uptake,” said Charith Konda, energy specialist for South Asia at the Institute for Energy Economics and Financial Analysis.
Grey hydrogen, the industry standard, comes from natural gas. Green hydrogen – made by using renewable electricity to split water – yields a clean, storable fuel that emits only water vapour when used.
It has been billed for years as a cornerstone of Asia’s net-zero strategy, with potential applications ranging from steelmaking and fertiliser production to shipping and aviation.