Investing in hydrogen: a global interactive guide – Overview

The Ashurst "Investing in Hydrogen" guide brings together legal know-how and market insights of the global hydrogen industry. This overview chapter summarises key trends.

National hydrogen strategies

Most countries featured in this guide have by now adopted a national hydrogen strategy or policy, which reflects an international commitment to further advancing hydrogen as an energy source and essential element of the energy transition. Exceptions are Nigeria, Saudi Arabia, Sweden and Uzbekistan who do not yet have formalised hydrogen strategies in place. Overall, the country review shows broad policy support for a hydrogen industry across all regions, with hydrogen being increasingly integrated into long-term economic, energy, and climate planning efforts. While hydrogen strategies are still a fairly new policy instrument (the earliest dedicated hydrogen strategy appears to have been adopted by Japan as recently as 2017), some countries, such as Germany, have already updated their initial policies to account for new geopolitical realities. As the hydrogen industry develops, we expect hydrogen strategies to evolve as well.

Key goals

Across the jurisdictions covered, national hydrogen strategies formulate a variety of goals and commitments. Details vary by country, but there are several common themes: green hydrogen is seen as key contributor to achieving national or international decarbonisation targets, especially in sectors where CO2 emissions are otherwise hard to abate. Most countries are also committed to scaling up national hydrogen production capacities, some by also announcing more or less binding production or consumption targets. More generally, countries aim to establish a full hydrogen industry along the entire value chain and to develop supporting regulatory frameworks.

Sectoral integration

An emerging hydrogen industry and the availability of especially green hydrogen in sufficient amounts and at affordable prices will have a transformative impact across various sectors. Country reports identify in particular the following sectors as those most likely to be affected: Heavy industry and manufacturing (steel, chemicals, refining etc.), transport and mobility (heavy road transport, shipping, aviation), power generation and energy storage.

Green hydrogen

Green hydrogen – produced by electrolysis using renewable energy – is a central pillar in many national strategies. In fact, the main goal of some strategies is specifically the promotion of the use of green hydrogen. However, not all countries focus exclusively on green hydrogen and many also support other forms of low-carbon hydrogen. This in particular applies to "blue" hydrogen, which is produced from natural gas with supporting carbon capture and storage to reduce CO2 emissions. This ties into another emerging global trend with CCUS becoming increasingly accepted as a means to reduce CO2 emissions. Some jurisdictions are also agnostic regarding the hydrogen source and generally support the use of all colours of hydrogen during the ramp-up of the hydrogen industry. As green hydrogen becomes more ubiquitous, it will be interesting to see whether policy support for other sources of hydrogen will diminish.

Certification schemes for green hydrogen

The development and implementation of certification schemes for green hydrogen is a key goal in many jurisdictions, but the implementation status and the details of existing schemes currently still varies considerably. EU Member States are implementing the EU's Renewable Energy Directives and related delegated acts which define under which conditions hydrogen, hydrogen-based fuels and other energy carriers can be considered renewable fuels of non-biological origin (RFNBO), thus eventually creating an EU-wide standard for green hydrogen. The European Commission has by now also recognised several voluntary certification schemes for RFNBOs and national authorities are beginning to accredit respective certification bodies. Outside of the EU, countries are developing individual green hydrogen standards, such as the Brazilian Hydrogen Certification System, India's Green Hydrogen Standard or South Korea's Clean Hydrogen Certification System. A key challenge to establishing an international green hydrogen market will be aligning the various certification schemes to ensure green hydrogen, similar to oil and gas today, will eventually be an internationally tradeable commodity.

Regulatory drivers for the use of green hydrogen

Many countries have established production or consumption targets for green hydrogen, but those targets are typically non-binding in nature. This may change soon. In the EU, for example, the Renewable Energy Directive requires Member States to ensure that by 2030 42% of the hydrogen used in the industry is an RFNBO and 60% by 2035.  Generally, however, the approach in most countries is to incentivise and support the production and use of green hydrogen through financial, regulatory, and market-based mechanisms, rather than to mandate its use. Denmark, for example, allows hydrogen projects to be qualified as "regulatory test zones", exempting the project from specific regulations for a certain period of time. Other countries are providing tax credits (Finland) or developers enjoy fast-track approvals and reduced regulatory burdens (Egypt).

Government funding

Government funding continues to be a key element in supporting the market ramp-up of green hydrogen, with most countries providing some form of government subsidies for hydrogen projects, often through national or regional grants, R&D funding, tax incentives, and support for specific pilot projects. In the EU, this includes funding under the Important Projects of Common European Interest or the EU's Hydrogen Bank auctions. Where no hydrogen specific funding is available, projects may often participate in generally existing funding schemes. With government budgets being limited, it is likely that the hydrogen sector will eventually also have to move to a more market driven economy.

Evolving regulatory frameworks

An important aspect to highlight is the still evolving nature of hydrogen regulation. In most countries, hydrogen is still primarily governed by existing energy and environmental regulations, which may not always be the best fit. Bespoke hydrogen legislation is rare but beginning to emerge as the hydrogen sector matures and the need for more tailored regulations becomes more apparent. For example, France has developed a specific legal framework for hydrogen through the "Hydrogen Ordinance" and the "Hydrogen Decree", which set out regulatory requirements for production, storage, transportation, and supply and have been incorporated into the French Energy Code. In South Korea, the "Hydrogen Act" also provides a dedicated legal framework for the hydrogen sector, including a graded clean hydrogen certification system and specific safety management provisions. Especially in the EU more dedicated hydrogen regulation can be expected as EU Member States will begin to implement the EU’s Hydrogen and Gas Decarbonisation Package.

International cooperation 

One final aspect that became apparent in the updated country chapters is the importance of international cooperation, which is becoming a cornerstone of the emerging global hydrogen economy. Countries are entering into a range of bilateral and multilateral agreements to foster investment, harmonise standards, and facilitate cross-border trade in hydrogen and its derivatives. For example, the Netherlands has been particularly active, signing several Memoranda of Understanding and Declarations of Intent with countries such as Denmark and Norway to establish regional hydrogen networks, including cross-border transport infrastructure and underground storage solutions. In May 2024, the Belgian Hydrogen Council, NLHydrogen (Netherlands), and the German National Hydrogen Council signed an MoU to strengthen cooperation in the hydrogen sector, focusing on joint initiatives to advance the hydrogen economy in North-West Europe. Belgium has also entered into an MoU with Hydrom Oman to enhance cooperation in green hydrogen development and to produce green hydrogen and ammonia for export to Europe and Asia. Canada and Germany have established the Canada-Germany Hydrogen Alliance, committing to policy harmonisation, the development of secure hydrogen supply chains, and the creation of a transatlantic supply corridor for clean hydrogen. Similarly, Australia has entered into a range of bilateral agreements, such as the Australia-Germany Hydrogen Accord, the Australia-Japan Memorandum of Cooperation, and MoUs with the Republic of Korea, the Netherlands, and the United Kingdom, all aimed at advancing hydrogen research, trade, and investment. The growing number of international cooperations is a clear indicator that hydrogen is becoming a global commodity with trade partners working towards creating harmonised standards.

Outlook

The latest Ashurst "Investing in Hydrogen" guide continues to show strong government policy support across most jurisdictions for the development of a comprehensive hydrogen value chain, backed by significant amounts of government funding and regulatory measures intended to support the scaling of production capacities and offtake demand. At the same time, the hydrogen sector is showing uneven momentum due to technical, economic and infrastructure challenges that are currently still hampering an unhindered development of the hydrogen industry. Especially green hydrogen continues to be expensive and is not yet available in sufficient amounts and it may not be the universal solution for all green energy demands. We nevertheless expect the hydrogen economy to eventually emerge as a key element in global decarbonisation efforts, with specific applications in various industries.