Global hydrogen demand is projected to grow significantly in the coming decades, driven by decarbonization efforts across industries such as energy, transportation, and manufacturing. International trade will play a crucial role in meeting this demand, particularly as regions with abundant renewable resources position themselves as exporters of hydrogen and its derivatives, such as ammonia and liquid organic hydrogen carriers (LOHCs). Key export hubs, including Australia, the Middle East, and parts of North Africa, are expected to dominate supply chains due to their favorable solar and wind conditions, which enable cost-competitive green hydrogen production.

The shift toward hydrogen trade is underpinned by disparities in production costs and resource availability between regions. Countries with limited renewable energy potential but high energy demand, such as Japan, South Korea, and parts of Europe, will rely on imports to meet their hydrogen needs. For instance, Japan has already outlined plans to import 300,000 tons of hydrogen annually by 2030, primarily in the form of ammonia, to support power generation and industrial applications. Similarly, the European Union’s REPowerEU strategy anticipates importing 10 million tons of renewable hydrogen by 2030 to reduce dependence on fossil fuels.

Ammonia and LOHCs are emerging as preferred vectors for long-distance hydrogen transport due to their higher energy density and established handling infrastructure. Ammonia, in particular, benefits from existing global trade networks, with over 180 million tons traded annually for fertilizer production. Converting hydrogen into ammonia allows exporters to leverage this infrastructure while mitigating the challenges of transporting pure hydrogen. Australia’s Hydrogen Energy Supply Chain (HESC) project and Saudi Arabia’s NEOM Green Hydrogen Project are among the initiatives aiming to establish large-scale ammonia export facilities. LOHCs, such as toluene and dibenzyltoluene, offer another pathway, enabling hydrogen to be stored and transported at ambient conditions before being dehydrogenated at the destination.

Infrastructure requirements for hydrogen trade are substantial and include production facilities, conversion plants, storage terminals, and port expansions. Export hubs must integrate renewable energy generation with electrolysis or other hydrogen production methods, alongside ammonia synthesis or hydrogenation units for LOHCs. For example, the Asian Renewable Energy Hub in Australia plans to combine 26 GW of wind and solar capacity with large-scale electrolyzers and ammonia production. Importing nations, meanwhile, must develop regasification and dehydrogenation facilities, as well as pipelines or distribution networks to deliver hydrogen to end-users.

Cost parity between imported and locally produced hydrogen will be a critical factor in shaping trade flows. Current estimates suggest green hydrogen production costs in optimal regions could fall below $2/kg by 2030, while less sunny or windy regions may face costs above $3/kg. When accounting for conversion, transport, and reconversion expenses, ammonia-based hydrogen imports could add $1-$1.5/kg to the base cost, while LOHCs may incur higher premiums due to their more complex processing. Despite these additions, imports are likely to remain competitive for countries with high domestic production costs, particularly where policy incentives or carbon pricing further tilt the balance in favor of low-carbon alternatives.

Geopolitical implications of hydrogen trade are multifaceted, with potential shifts in energy dependencies and alliances. Traditional fossil fuel exporters, such as Saudi Arabia and the United Arab Emirates, are investing heavily in green hydrogen to maintain their energy leadership roles. Conversely, nations reliant on energy imports may diversify their supply chains, reducing exposure to geopolitical risks associated with oil and gas. However, new dependencies could emerge around critical materials for electrolyzers and renewable infrastructure, such as iridium and platinum for PEM electrolysis or rare earth metals for wind turbines.

The regulatory landscape will also influence hydrogen trade dynamics. Bilateral agreements, such as those between Germany and Namibia or Japan and Australia, are already being forged to secure supply chains. International standards for hydrogen and its derivatives will be essential to ensure compatibility and safety across borders. Organizations like the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) are working toward harmonizing certification schemes, which will be crucial for building trust in cross-border transactions.

Challenges remain in scaling up hydrogen trade, including the need for massive capital investment, technological advancements in conversion efficiency, and the resolution of regulatory uncertainties. However, the potential rewards—decarbonizing hard-to-abate sectors, enabling energy security, and fostering economic growth—make it a pivotal component of the global energy transition. As demand projections solidify and infrastructure develops, international hydrogen trade will likely become a cornerstone of a net-zero future.

The evolution of hydrogen markets will depend on collaboration between governments, industry, and financial institutions to address these challenges. Pilot projects and early trade deals are already providing valuable insights, but the next decade will be decisive in determining whether hydrogen can fulfill its promise as a globally traded commodity. With the right policies and investments, hydrogen could reshape energy geopolitics much as oil did in the 20th century, creating new opportunities for cooperation and competition in a decarbonized world.