Ukraine’s ‘Green’ Opportunity – Provide Europe the Hydrogen Boost to Be Competitive

Today, humanity is faced with critical challenges, such as social and political polarization, uncontrolled climate change and extreme weather conditions. Anastasia Tsibulyak’s column for Kyivpost. The world’s leading experts note the inevitability of a reduction in the space for government officials to maneuver when faced with the inevitable need to find compromises in light of resource limitations, reduced economic activity and budget revenues, the erosion of the middle class, growing macroeconomic disparities, inflationary and recessionary processes, and the debt load. Overcoming these problems calls for a search for new development strategies, particularly, the implementation of the “green” digital and energy transition.
Ukraine must find its place in the new world economy 

Finding a new place for Ukraine within the global economy should be based on the “feel the need” approach and must take into account the intricacies of the economic situation.

We are accustomed to perceiving Ukraine as a “granary of the world” or a “European treasury” when it comes to black soil and natural resources. However, it’s obvious that relying exclusively on exporting rare earth won’t secure Ukraine a competitive position in the new international division of labor that’s going to emerge during the development of the “green” and digital economy. Therefore, conducting an “audit of Europe’s needs,” opens up opportunities for Ukraine to join the league of high-tech countries – and this article aims to prove it. Given global trade fragmentation, the breakdown of traditional supply chains, and increasing protectionism, the EU is well aware of the emergence of a new economic landscape. Europe’s comparative advantages include a developed infrastructure, advanced science, and a highly skilled workforce are exactly what is needed for the development of “green” technologies. At the same time, it’s no secret that limited energy resources, lack of diversification in supply sources, limited raw materials, limited financial and human resources, as well as the lack of necessary technological solutions, not only impact competitiveness but also make it difficult to achieve the EU’s goal of climate neutrality by 2050.

The “green” economy is ideal for developing new markets

The “green” economy appears to be the ideal environment for the creation of new markets, where pioneers will be able to head entire industries and generate incomparably high profits. Despite political opposition and global technological rivalry, the transition to environmentally friendly technologies involves the formation of “green” cooperative ties and opens up a space for Ukraine for high-tech cooperation in the production of “clean” and “green” hydrogen. Hydrogen production is almost entirely based on technologies that use natural gas, which is traditionally associated with high carbon emissions. “Blue” hydrogen is produced from natural gas and can be considered “clean” if it meets requirements for methane and carbon emissions.

“Green” hydrogen, on the other hand, is produced by the electrolysis of water using renewable energy sources. It is the latter that is considered the main guarantee of the further decarbonization of the transport and heavy industry sectors.

According to the forecasts, the demand for “clean” hydrogen will reach 170 million tons by 2030 and 600 million tons by 2050. It is anticipated that by 2050, ferrous metallurgy, chemical and cement industries, energy will consume 42 percent of the total volume of “clean” hydrogen, and aviation, shipping and freight vehicles will consume 36 percent. The European Commission announced that, already this year, the EU plans to start mass industrial use of “clean” hydrogen. The launch of the “hydrogen” projects is facilitated by government support programs for private companies, which will continue until the production of “clean” hydrogen is comparable in cost to traditional hydrogen.

Decarbonization and European integration of Ukraine

Ukraine pledged to continue reducing carbon emissions as a part of its European integration course. Since Ukraine no longer relies on Russian natural gas and oil, hydrogen usage in transportation, industry, and power generation remains its sole option. However, so far, governmental initiatives in Ukraine are limited to declarative statements about producing “green” steel. The metallurgical industry seems promising for hydrogen production, considering the available power generation capacities of nuclear power plants in Ukraine.