Brazil, Australia, Spain and Algeria will be able to offer the cheapest green hydrogen and derivatives to Europe in 2030, while India, South Africa, Mexico and Ukraine may struggle to compete, according to a new report commissioned by Germany’s H2Global Foundation.

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The 206-page cost-analysis study, Power-to-X Country Analyses, compiled by the Fraunhofer Institute for Solar Energy Systems (ISE), examined how much it would cost to produce and export green hydrogen, ammonia, methanol and synthetic jet fuel to Germany (by pipe or ship) in 2030 from 39 regions across 12 countries — all of which have been active in developing international hydrogen markets.

“In the overall comparison of all the countries analysed and the PtX [Power to X] supply costs achievable, Brazil, Australia and Spain in particular stand out,” the report says, adding that this is mainly due to their excellent combined wind and solar resources.

The small region of La Guajira in northeast Colombia was also singled out for offering “extraordinarily high wind and PV [photovoltaic solar] full load hours and therefore very low PtX production costs”. The other regions of Colombia, however, “promise very limited RE [renewable energy] and PtX potential”.

Morocco, Algeria and Tunisia would also be able to offer “above-average conditions for PtX production” and favourable export costs due to their proximity to Europe.

Cost of hydrogen and ammonia in Germany in 2030 from the 12 countries in the study (including transport costs)


H2 cost (€/MWh - LHV) NH3 cost (€/MWh - LHV)
Algeria 138-149 182-200
Australia 217-232 173-185
Brazil 171-207 171-185
Colombia 176-318 190-267
India 238-313 226-251
Mexico 242-285 217-231
Morocco 160-165 208-245
Namibia 237-271 206-213
South Africa 231-266 204-225
Spain 137-145 193-209
Tunisia 148-156 201-208
Ukraine 149-166 207-277

Namibia also “performs well” in terms of production and supply costs, but its potential would be improved if projects could be built in the national parks and restricted military areas that have the country’s highest wind speeds, and therefore the lowest PtX production costs.

In the remaining countries studied — South Africa, India, Mexico and Ukraine — “the evaluated PtX energy carriers show higher costs, although there are also individual regions which show quite an average cost performance,” the report explains, adding that higher interest rates will add to their expense.

“The main drawbacks for these regions are the moderate potential for wind energy and, in the case of PtX export, longer transport distances. In the case of these regions, an additional factor is that they were valued at a comparatively high WACC [weighted average cost of capital] of 6.8-8.0%, taking into account the overall WACC range in this study of 5.8-8.0%.”

The study explains that Brazil, Australia and La Guajira offer the lowest levelised cost of renewable energy (€35-47/MWh for solar and €41-55/MWh for wind), and therefore the lowest production costs for gaseous green hydrogen, ranging from €3.21-3.60 per kilogram of H2 — “well within or even below the current production cost of fossil hydrogen, considering the increased price of natural gas”. (Note: €1 = $1.09 at today's prices).

“Basically this study shows that in the medium term, green hydrogen and its derivatives can be produced and supplied at costs that may well be attractive considering the tense geopolitical circumstances related to the market for fossil fuels.”

The H2Global Foundation (H2Global Stiftung in German) is a donor-funded organization with a a mission to “accelerate the emergence of supply and demand markets for green hydrogen and Power-to-X products in Europe and globally”.

While it is not directly linked to the German government’s H2Global instrument — which buys green hydrogen and derivatives from outside the EU and sells it on to German or European customers — it does promote that programme.

“The H2Global instrument can shape long-term Power-to-X contracts and reduce risks for investors and producers,” it says in the new report.

Note: The study calculates transport costs for hydrogen by assuming gaseous H2 will be pumped via pipeline from European and North African countries to Germany, while the rest will be transported in the form of liquid H2 by ship (which requires it to be stored at cryogenic temperatures below minus 253°C).

“In this study, the liquid hydrogen pathways have higher supply costs than green ammonia or methanol for many of the regions evaluated under the technology assumptions made,” the report explains. “The main reason here is the higher capital costs for liquefiers and cryogenic ship transport.”