Navigating the Low-Carbon Hydrogen Landscape in Southeast Asia
Key Ideas
  • Major economies are investing in low-carbon hydrogen industrial hubs to achieve net-zero targets, with Southeast Asia considering its unique factors for similar initiatives.
  • The demand for low-carbon hydrogen in Southeast Asia is growing due to its potential to decarbonize sectors, create jobs, and generate export revenues.
  • Governments in the region should carefully assess and calibrate hydrogen targets and policies considering technological, market, logistical, sustainability, and geopolitical challenges.
  • Countries in Southeast Asia should tailor their low-carbon strategies to domestic conditions and comparative advantages, ensuring alignment with broader low-carbon industrial policies.
Major economies around the world are increasingly focusing on developing low-carbon hydrogen industrial hubs as part of their efforts to achieve net-zero targets. While countries like the USA, Australia, India, and the EU have made significant investments in such hubs, Southeast Asia and the ASEAN region are also considering their roles in the low-carbon hydrogen landscape. Low-carbon hydrogen, produced with minimal CO2 emissions through methods like fossil fuel with carbon capture (blue hydrogen) and renewable energy with electrolysis (green hydrogen), is seen as a promising solution for decarbonization. However, global demand for low-carbon hydrogen remains low, with significant growth needed to align with climate goals. Southeast Asia's annual hydrogen demand is projected to increase, with countries like Singapore, Malaysia, Indonesia, and Vietnam showcasing ambitions to become key players in the global hydrogen market. While there is interest in the potential of low-carbon hydrogen to decarbonize sectors and boost economies in the region, governments are cautioned against setting unrealistic targets prematurely. Challenges such as technological readiness, market demand, and geopolitical considerations could impact the success of hydrogen initiatives. To navigate these challenges, Southeast Asian countries are advised to tailor their low-carbon strategies to their unique conditions and strengths. For example, Singapore's focus on becoming a 'hydrogen service hub' leverages its international networks and innovation ecosystem, while Malaysia's Sarawak region is positioned to be a green hydrogen hub due to its access to hydropower and industrial expertise. It is crucial for governments to integrate hydrogen strategies within broader low-carbon industrial policies and carefully evaluate the feasibility and alignment of such initiatives in the regional context.
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