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The Future of Hydrogen Chapter 6: Policies to boost momentum in key value chains fuel price guarantees from suppliers or governments. Policy makers may choose to offer more attractive levels of support where large equipment orders can be secured for large fleets or networks of refuelling stations, or give incentives to capitalise on the existing refuelling infrastructure along corridors. Investment risk mitigation. Public policy may need to manage investment risks arising from uncertain supply chains to avoid higher capital costs and hydrogen prices than necessary. For example, a share of electrolyser or refuelling station capacity could receive guaranteed revenue for a limited period, as in California. As has been the case for batteries, clarity over whether electrolysers will be exempt from grid fees, taxes and levies, and under what circumstances, will be important in many markets. Cross-border co-operation to maximise synergies in hydrogen deployment would also help to reduce investment risk. R&D, strategic demonstration projects and knowledge sharing. Publicly funded research efforts might focus primarily on key cost components, such as fuel cell durability and recycling, on-board storage options and electrolyser efficiency, as well as on earlier-stage technologies likely to be important for shipping and aviation, including use of ammonia in ships, lower-cost means of sourcing “low-carbon” CO2 and producing synthetic fuels. Demonstration projects involving multiple supply chain partners are likely to be valuable, particularly if focused on the use of intermediate storage to manage variable hydrogen supply streams; the capabilities of hydrogen vehicles such as buses, taxis and delivery vehicles; and safety regulations in jurisdictions where these do not exist for hydrogen value chains. Harmonising standards, removing barriers. The harmonisation of standards across regions and ideally at global level would help to stimulate cost reductions. Among other things, standards are needed for refuelling nozzles for vehicles; hydrogen supply pressures; refuelling station permitting; and safety protocols for high-pressure hydrogen and liquid hydrogen transport by trucks. There is also a case for looking at whether current limitations on the use of hydrogen vehicles on bridges and in tunnels could safely be amended. UNECE Global Technical regulation 13 and various ISO committees are currently exploring several of these issues. 4. The first shipping routes: Kick-start international hydrogen trade Shipping hydrogen between countries could emerge as a key element of a future secure, resilient, competitive and sustainable energy system. Investment in infrastructure, ships, standards and supply chain companies will have the most impact if located in regions with the greatest potential for hydrogen imports and exports. They are unlikely to happen on a large scale without multilateral co-operation between interested governments. The cost of hydrogen production varies between regions, with Europe and Japan having relatively high costs and also strong policy support for hydrogen (Figure 68). Hydrogen importers stand to benefit from cheaper low-carbon energy, especially if their domestic renewable energy, nuclear or CCUS resources are challenging or expensive to develop. Hydrogen imports can help maintain energy security in a low-carbon future. Exporters stand to generate new sources of economic value based on clean energy resources. Africa has the potential to produce (for both domestic and export) around 500MtH2/yr at less than USD 2/kgH2, while Chile alone could produce 160 MtH2/yr at this cost. The Middle East could produce over 200 years of current hydrogen demand at USD 1.3/kgH2 from known gas reserves that could be combined with CCUS. PAGE | 188 IEA. All rights reserved.PDF Image | The Future of Hydrogen 2019
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