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Last Update 08 September 2023

Demystifying hydrogen distribution and global supply chain for effective trade

Hydrogen distribution and global supply chains

With hydrogen production costs falling, costs for hydrogen distribution are becoming increasingly more important. For production and distribution, three types of value chains are emerging.
Largescale hydrogen off takers that are in close proximity to favourable renewables or gas and carbon storage sites will use onsite production. Smaller off takers, for example re fuelling stations or households, will require regional distribution. In regions without optimal resources, both large- and small off takers may rely on hydrogen imports.

The emergence of international distribution is driven by cost differences for hydrogen production stemming from renewables endowment, the availability of natural gas and carbon storage sites, existing infrastructure and the ease and time requirements for its build-out, land use constraints, and the assignment of local renewables capacity for direct electrification. Many expected hydrogen demand centers, including Europe, Korea, Japan, and parts of China, experience such constraints. In some of these cases, H2 suppliers will meet this demand more effectively by importing hydrogen rather than producing it locally.

Distribution of global hydrogen resources and demand centers

The H2 supplies depends upon the optimal H2 transport mode, that varies by distance , terrain and end-use : no universal solution exist

Hydrogen can be transported globally using three forms of transportation – trucks, pipelines or ships – using a range of different carriers. Currently, liquid hydrogen, liquid organic hydrogen carriers and ammonia are the carbon-neutral solutions with the most traction. While the optimal choice of transportation depends heavily on the targeted end-use and the terrain to be covered, some general rules on preferable solutions for different distances apply.


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