Green Hydrogen Trade Must Weigh Social and Environmental Costs, Study Finds

Hydrogen has long been heralded as a cornerstone of the global transition to a low-carbon economy, and its moment may finally be arriving. Worldwide demand reached almost 100 million tonnes in 2024, an increase of roughly 30 percent compared with a decade ago, yet low-emission hydrogen still accounts for less than one percent of total production. As governments and industries race to close that gap, a new study from the University of the Basque Country (EHU) warns that the architecture of the emerging global hydrogen trade cannot be built on carbon accounting and cost curves alone. According to the research, a genuinely sustainable green hydrogen economy will require a careful combination of technological improvements and policies that guarantee environmental benefits, economic competitiveness and social responsibility in equal measure.

The work comes from SUPREN, a research group at EHU that is leading a large-scale European project known as UnLOHCked, focused on the social, environmental and economic assessment of large-scale green hydrogen supply chains in Europe. Victoria Laura Barrio, full professor at EHU and lead researcher of the project, explains that one of the central challenges facing these supply chains is deceptively simple: how to move and store the gas itself. Hydrogen contains a vast amount of energy per kilogram, but as an ultra-light gas it occupies an enormous volume, which makes transporting and storing it both technically awkward and expensive. Solving that logistics problem is widely seen as a prerequisite for building an international hydrogen market.

One of the most promising answers is a family of materials known as liquid organic hydrogen carriers, or LOHCs. These are organic liquids that behave much like conventional oils, into which hydrogen is incorporated through a straightforward chemical reaction. Because the hydrogen is chemically bound within a pumpable liquid, it can be stored and transported using existing oil and gas infrastructure, a fact that could dramatically lower the barriers to international trade. At the destination, the hydrogen is released from the carrier through a reverse process, and the carrier liquid can be returned for reuse. The researchers emphasise the technology’s considerable potential and foresee it playing a key role in the global green hydrogen trade in the near future.

The strategic logic of LOHC-based trade is already shaping national planning. Several countries are developing future strategies for the production, export, import and consumption of hydrogen, and Barrio notes that it would make particular sense to bind hydrogen to the liquid carrier in southern Europe or Africa, where solar energy is highly competitive, or in regions with strong wind energy potential. The hydrogen could then be shipped easily in the form of LOHC, riding on infrastructure originally built for fossil fuels. In this vision, sun-belt and wind-belt exporters become the energy suppliers of a decarbonising world, while industrial importers in northern Europe and East Asia plug into those flows.

To test whether such flows can truly be sustainable, EHU researcher Irene Rey carried out a detailed sustainability assessment of these international supply chains, now published in the Chemical Engineering Journal. The team performed a life cycle assessment of every stage involved in generating green hydrogen, hydrogenating it into the carrier liquid, transporting it by sea to the end consumer, releasing it at its destination and returning the carrier liquid, while excluding the final use and consumption of the hydrogen itself. The analysis contemplated different configurations of producing countries with high renewable potential, including Namibia, Saudi Arabia, Norway and Spain, and consumer countries such as Germany, the Netherlands, Japan and Italy, alongside maritime transport routes and different types of land-based distribution.

The study’s principal innovation lies in what it added to the conventional toolkit. Life cycle assessment and techno-economic analysis are standard instruments for evaluating energy systems, but the researchers also incorporated a social risk analysis of the supply chains, an aspect that has been little studied until now. Because hydrogen production would be located in countries with markedly different social, economic, political and institutional conditions, the production stage shows a high variation in potential social risks. Labour standards, governance quality, human rights conditions and community impacts all vary enormously between candidate exporter nations, meaning that two hydrogen molecules with identical carbon footprints can carry very different social burdens depending on where and how they were made.

The technical results point clearly to where improvement efforts should be concentrated. The researchers found that further work is needed to improve the efficiency of green hydrogen production and of the release of hydrogen from the carrier, since both stages involve high energy consumption and are the most critical links in the supply chain. Electrolysis powered by renewable electricity and the dehydrogenation step at the point of import together determine much of the overall energy penalty, emissions profile and cost of delivered hydrogen. Gains in these two stages would ripple through the entire system, improving every sustainability dimension simultaneously.

Yet the study’s most sobering conclusion is that no configuration emerges as a winner on all fronts. According to Rey, the results show that there is no perfect scenario delivering benefits across the social, environmental and economic dimensions at once. Instead, she argues, a balance should be achieved across the entire supply chain, with priority not given only to economic aspects. Routes that minimise delivered cost may concentrate social risk in vulnerable producer regions, while configurations that maximise environmental performance may struggle to compete commercially. Designing the future trade will therefore require explicit trade-off analysis and policy frameworks that internalise social and environmental performance alongside price.

The stakes of getting this right are considerable. Hydrogen could account for up to 14 percent of global final energy consumption by 2050, with an ever-increasing share traded internationally as new value chains emerge, a shift likely to reconfigure global energy trade much as oil did in the twentieth century. Regions with abundant renewable resources, such as Africa, Latin America, the Middle East and Oceania, are increasingly viewed as potential exporters, while Europe, Japan and South Korea are expected to become key importers. Rey cautions that designers of green hydrogen corridors must do more than simply reduce carbon emissions and production costs; they must also consider the geopolitical and social implications of the flows they create.

Her question cuts to the heart of the energy transition’s equity dilemma: how can a future hydrogen trade be developed without reproducing the resource extraction dynamics in which the Global South supplies raw energy for the benefit of the technological and economic development of the Global North? The EHU study, conducted as part of Rey’s doctoral thesis at the Chemical and Environmental Engineering Department of the Bilbao School of Engineering under the direction of Ion Agirre and Professor Barrio, and carried out in collaboration with the Polytechnic University of Milan, offers a springboard for answering it. By demonstrating that social risk can be quantified and integrated into supply chain design alongside environmental and economic metrics, it provides policymakers and industry with a practical framework for building a hydrogen trade that is not only clean and competitive, but also just.

Subject of Research: Sustainability assessment of international LOHC-based green hydrogen supply chains

Article Title: The design of the future global trade in green hydrogen should also consider social and environmental aspects

Article References: The design of the future global trade in green hydrogen should also consider social and environmental aspects. (n.d.). Original publication

Image Credits: AI Generated

DOI: Not provided

Keywords: green hydrogen, liquid organic hydrogen carriers, LOHC, hydrogen supply chains, life cycle assessment, social risk analysis, energy transition, renewable energy, global hydrogen trade, sustainability, electrolysis, energy policy