(Karlsruhe / Germany) – A number of countries are currently still exorbitantly dependent on the export of their raw materials, oil and gas. The Fraunhofer Institute for Systems and Innovation Research (ISI) has investigated, using the examples of Saudi Arabia, Kazakhstan, and Nigeria, how and to what extent these fossil fuels could be replaced in the future by the production and export of, for example, green hydrogen and its derivatives such as ammonia and methanol.
Study “The role of green hydrogen in the energy transformation of fossil fuel exporters”. © Fraunhofer Institute for Systems and Innovation Research
The export of fossil fuels has so far been one of the most important industries in all three countries. A decline in this area would therefore have consequences for other sectors, such as the manufacturing industry and wholesale and retail trade, due to economic interrelationships. “Even if the number of employees in the directly affected fossil energy sector is currently comparatively small, impacts on value creation and employment in other sectors such as agriculture and food supply are to be expected,” say the authors of the study “The role of green hydrogen in the energy transformation of fossil fuel exporters”. Targeted strategies are therefore required to compensate for the long-term loss of jobs in the primary and secondary affected areas. In the long term, the development of a hydrogen sector could contribute to the creation of jobs in the construction, mechanical engineering and metal and electronics industries.
Dependent on the export of fossil fuels
In Saudi Arabia, exports of fossil fuels accounted for around 2021 percent of gross domestic product and around 24 percent of total export revenue in 57. Saudi Arabia exports much of its oil and gas to the economies of Asia. In Kazakhstan, trade in oil and gas accounts for around half of export revenue (2021). The majority of the crude oil goes to the EU, especially Germany. Refined oil is exported primarily to the USA and natural gas primarily to China. The country also has large coal deposits, other fossil resources and a well-developed mining industry.
In Nigeria, oil and natural gas accounted for more than 2021 percent of the net export budget in 90. Important trading partners for crude oil are India and Spain. In Nigeria, the cost of crude oil production is well below the global average. However, the country is currently facing massive challenges “due to increasing oil theft from its pipelines”.
Potential for green hydrogen
There is high potential for the production of green hydrogen in all three countries. “Although future market prices are still difficult to estimate today, it can be assumed that the possible revenues from potential hydrogen exports are unlikely to be sufficient to fully compensate for the losses from the declining export of fossil fuels, as the global demand for hydrogen expected in the future Hydrogen and e-fuels are significantly lower than the current demand for oil and natural gas.”
The study “The role of green hydrogen in the energy transformation of fossil fuel exporters” is available free of charge as a PDF (103 pages).
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Some countries are currently still economically dependent on the export of their raw materials, oil and gas. Switching to hydrogen production and export is feasible. © International Energy Agency
