Available online at www.sciencedirect.
com Current Opinion in
ScienceDirect
Hydrogen economy and sustainable development
goals: Review and policy insights
Pasquale Marcello Falcone1, Michael Hiete2 and
Alessandro Sapio1
Hydrogen as a clean, reliable and potentially sustainable
energy vector has attracted growing interest for promoting the
sustainable development of both industry and society world-
wide. Hydrogen is a rising enabler for a multisectorial transition
toward a low-carbon economy based on renewable energy
sources. Nevertheless, there is a lack of literature scientifically
scrutinizing the relationships between a hydrogen economy
and the United Nations Sustainable Development Goals. In
this article, we argue that the new role of hydrogen takes effect
as a game changer and review the policy framework for a
hydrogen economy with respect to the prospects of success
and its timing and to its role in supporting to reach the Goal 7,
i.e. ‘affordable and clean energy’.
Addresses
1
Department of Business and Economics - University of Naples
Parthenope, Via Generale Parisi, 13, Naples, 80132, Italy
2
Ulm University, Helmholtzstr. 18, Ulm, 89081, Germany
Corresponding author: Falcone, Pasquale Marcello (pasquale.
falcone@uniparthenope.it)
Current Opinion in Green and Sustainable Chemistry 2021,
31:100506
This reviews comes from a themed issue on Sustainable Chemistry
and the UN SDGs (2021)
Edited by Zhimin Liu and Klaus Kümmerer
Available online 18 April 2021
For complete overview of the section, please refer the article
collection - Sustainable Chemistry and the UN SDGs (2021)
https://doi.org/10.1016/j.cogsc.2021.100506
2452-2236/© 2021 Elsevier B.V. All rights reserved.
Keywords
Hydrogen economy, SDGs, Sector coupling, Policy.
Introduction
Hydrogen is considered by many as a redeemer revo-
lutionizing the energy system [1]. A hydrogen economy
builds on hydrogen (and derived products such as
ammonia) and electricity as energy carriers (cf. [2]).
For hydrogen and derived chemicals, the term ‘energy
vector’ is widely used and refers to ‘an energy-rich
substance that facilitates the translocation and/or
storage of energy [...] with the intention of using it at a
distance in time and/or space from the primary
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Green and Sustainable Chemistry
production site’ [3]. Key aspects are here the possi-
bility to store and transport hydrogen or derived
chemicals over longer times and distances, as well as
the possibility to produce hydrogen from electricity by
electrolysis, e.g. a study by Michalski [4], and convert it
back to electricity in fuels cells with rather high effi-
ciencies, also in mobile applications such as fuel cell
electric vehicles [5]. Hydrogen is also discussed for
replacing coke as reducing agent in iron production to
lower greenhouse gas (GHG) emissions [6] and for
replacing (together with captured CO2) fossil fuels as
feedstock in the chemical industry [7]. But there are
also the pictures of the Hindenburg disaster high-
lighting the risks (cf. [8] and with a recent review on
risks [9]). It is evident that a reduction to these aspects
falls. First, hydrogen is only an energy vector [3] and
the question how the hydrogen is produced and how
the energy system around hydrogen is built are decisive
[8]. Second, the current debate goes beyond energy
supply for power and heat [10] and propulsion in the
transport sector [11] but includes also the process in-
dustries [12e14], e.g. iron and steel [15,16] and
chemical industry [17,18], and [19] highlighting the
latter’s key role within a hydrogen economy. Third,
hydrogen is a cornerstone for deep decarbonization in
the energy sector allowing for the integration of inter-
mittent renewable energy sources (RESs) at high
shares by providing a massive longer-term energy
storage service [20e22]. Further, in sectors currently
relying on fossil fuelebased carbon such as the organic
chemical industry, hydrogen enables a ‘defossilization’,
i.e. a replacement of fossil fuelebased carbon by other
carbon sources such as captured CO2, biomass, or
recycled plastic waste [23]. Finally, the transition to a
RES-based hydrogen economy challenges fossil fuel-
based business models and countries whose econo-
mies rely on these and opens new and fosters already
existing business opportunities in the RES sector, in
the areas of hydrogen production, storage and con-
sumption, in the provision of non-fossil fuel-based
carbon sources such as carbon capture and use and
producers of equipment in these fields, e.g., [24e27].
We argue that in its new role, hydrogen is a game
changer and review the policy framework for a hydrogen
economy with respect to the prospects of success and to
its role in supporting to reach the United Nations Sus-
tainable Development Goals (SDGs).
Current Opinion in Green and Sustainable Chemistry 2021, 31:100506
2 Sustainable Chemistry and the UN SDGs
The SDGs and the hydrogen economy
Although literature systematically analyzing the re-
lationships between a hydrogen economy and the SDGs
is lacking, some partial conclusions can be drawn. Syn-
ergies and trade-offs or incompatibilities between the 17
SDGs were analyzed in a study by Pradhan et al. [28]
and Spaiser et al. [29], both by statistically analyzing
past country time series data and in a study by Weitz
et al. [30] for the EU using a cross-impact matrix.
Spaiser et al. [29], for example, could not only identify a
number of incompatibilities, e.g. between some envi-
ronment goals such as low GHG emissions and poverty-
and social inclusionerelated goals, but also identify
factors such as health programs and RES affecting both
sides positively. Weitz et al. [30] point out that progress
in target 13.2 (climate mainstreaming) promotes prog-
ress in SDG 7 (‘affordable and clean energy’) and in a
number of further SDGs but that, for example, an
extension of bioenergy or hydropower could have
adverse effects on several environmental and social
SDGs, too. Further analyses of the impact of RESs on
SDGs in the EU can be found in a study by Meletiou
et al. [31] and Swain et al. [32] (via electricity prices). A
forward looking perspective is taken by von Stechow
et al. [33] who stress that limiting global warming to
2  C is a necessary condition for reaching the SDGs but
not a sufficient one. Karlsson et al. [34] review the
literature on climate cobenefits and find that these are
often neglected and partly under-researched. Though
any realization of a hydrogen economy will reduce air
emissions and the health and environmental impacts
related to air pollution, cf. [35e37], and aims at cutting
GHG emissions, already the production of the hydrogen
can be associated with severe impacts. Recent reviews
and overviews on hydrogen production pathways can be
found, for example, [8,38] (production in general), [39]
(production and storage) [40] (photochemical), [41]
(thermochemical) and [42] (solar), [43] (methane py-
rolysis), [44] (nuclear), [41,42] (geothermal). Because a
focus on production falls short, [38,47] call for a broader
approach comprising the (energy) source, system, and
service, i.e. the application step. There is a number of
attributional (environmental) life cycle assessments
(LCAs) of parts of a hydrogen economy. Valente et al.
[48] identified 97 scientific articles until 2015 (a lot of
them focusing on production and mobility). But there
are only few examples for social LCAs, e.g., [49,50] as
well as [51] (the latter for alkaline water electrolysis) or
for life cycle sustainability assessments (LCSAs), e.g. in
a study by Valente et al. [52] for biomass gasification.
Further, assessments of the consequences that would result
when switching to a hydrogen economy (cf. [53] for
German road transport) including rebound affects all of
which can be analyzed by consequential LCAs are
scarce: [48,54], the latter for the field of power-to-X
systems. For supporting policy, more research is neces-
sary: (i) assessing sustainability in an integrated manner,
Current Opinion in Green and Sustainable Chemistry 2021, 31:100506
e.g., LCSA studies, (ii) accounting for improvements
that can be expected to be made within this emerging
technology (prospective LCAs), e.g. in a study by
Valente et al. [55], (iii) acknowledging the role of a
hydrogen economy as an enabler for a high integration of
intermittent RES and deep decarbonization in process
industry, (iv) assessing possible configurations of a
hydrogen economy, i.e. taking a systems perspective, for
both growth, e.g. in a study by Reuß et al. [56], and
transition [57], as well as final configurations incl. the
question of ‘best’ levels of (de)centrality.
Sector coupling and projections for green
hydrogen
The green transition in hydrogen production brings
about lower GHG emissions but also further advantages.
Parra et al. [58] provide a thorough description of the
value offered by the power-to-X (P2X) pathway,
encompassing renewable energy time-shift, demand
load-shifting and electricity arbitrage, avoidance of
renewable energy curtailment, ancillary services and
frequency control, and seasonal storage.
At a closer look, the sources of value listed by Parra et al. [58]
are interlinked. For instance, storage is mainly motivated by
the short-term quest for load stabilization [59,60], and by
the need to overcome long distance in power transmission,
e.g. in combination with pumped hydrostorage [1]. Nearly
15 years of evidence show that storage may foster the
diffusion of RES ([61] is a recent case in point).
Indeed, green hydrogen production promises to foster
the integration of RES in the electricity sector [62],
thereby enhancing the credibility of ‘100% renewables’
scenarios. Green hydrogen marks a shift to a new tech-
nological trajectory within the centralized generation
paradigm, based on large-scale electrolysers fed through
electricity from the grid [1], or a move toward a new
technological paradigm centered on distributed gener-
ation and on energy prosumers [63,64].
Further, distributed generation matches better than the
traditional centralized generation paradigm with coor-
dination mechanisms characterized by decentralized
interaction and limited scope of control, such as the
market, due to its small scale and modularity. This
should improve the performance of the critical functions
[65], such as load balancing and frequency control.
Relatedly, the storage possibilities allowed for by green
hydrogen would allow grid operators and utilities to
delay the installation of extra generation and trans-
mission capacity for grid stabilization.
On the other hand, there are trade-offs. Large-scale
hydrogen production in areas with high insolation ex-
ploits economies of scale but leads to larger storage and
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transport demands and associated issues. In economies
of scope, a better local fit might lead to overall good
system efficiencies and economies of number could be
possible when making use of standardized modules
produced in larger amounts (cf. [66] for chemical pro-
cesses in general). Reliance on prosumers, although,
emphasizes asymmetries in information and compe-
tence, that magnify misperception of costs and risks
(see e.g. a study by Bakhtavar et al. [67] on energy
communities). Despite such trade-offs, the transition
toward green hydrogen sounds very appealing, but will it
materialize soon? In the status quo, nearly all hydrogen
worldwide is generated using climate-altering fossil
fuels (natural gas, coal), 96% is the latest estimate [68],
due to cost advantages: 1.5 to 2.5 USD/kg for gray (fossil
fuelebased) hydrogen compared with between 2.5 and
7 USD/kg for green hydrogen [69]. Recent projections
by BloombergNEF, although, indicate that green
hydrogen cost will reach around 2 USD/kg by 2030 and 1
USD/kg by 2050 [70]. Depending on the prevailing
policy scenario, by 2050 this will allow to meet a share of
final energy needs comprised between 7% and 24% in a
1.5  C global warming scenario [70], whereas the range
is 6e18% according to projections by IRENA [64].
Reaching the same order of magnitude between water
electrolysers and the renewable sources in terms of
power scale is a necessary condition for the coupling
between hydrogen and renewables [71]. At 2 USD/kg,
the BloombergNEF report computes the carbon price
thresholds that would enable the switch to green
hydrogen in various sectors: 50 USD/tCO2 in steel
making, 60 USD/tCO2 for heat and cement production,
78 USD/tCO2 for ammonia synthesis, and 90 USD/
tCO2 for aluminum and glass manufacturing [70].
But as importantly, current research asks: in which
countries will green hydrogen be more competitive?
Hydrogen is currently far more costly to store than fossil
fuels, and more expensive to transport via road or ship,
due to its low density. Large-scale transportation can only
be conceived through pipelines, but compatibility issues
may hamper the use of existing infrastructures, or by
transformation to methane, ammonia, and so on. Favor-
able geographical conditions, such as proximity and
‘natural’ storage facilities (salt caverns) are not wide
spread. Bhagwat and Olczak [67] report that trans-
portation through a dedicated pipeline linking North
Africa and Europe would cost about 0.22 USD/kg. Esti-
mates of transport costs in existing natural gas pipelines
in mixtures with up to 10 vol% hydrogen in a study by
Timmerberg and Kaltschmitt [72] are in the range of 9e
19 V/MWh, but the production potential from North
Africa exceeds the current transport capacity, hence
transport may be limited to no more than 23.2 TWh/year.
Schmitt [73] reports that behind the failure of the
Desertec project there were disagreements on the
technical and political viability of importing renewables
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Hydrogen economy and SDGs Falcone et al. 3
on the European continent from the Middle East and
North Africa region, also related to the involved security
of supply and asset stranding issues. Cross-country
variability in the delivered cost of green hydrogen is
highlighted in a study by BloombergNEF et al. [70],
with estimates ranging from 20 to 25% lower in the
U.S.A., Brazil, Australia, and the Middle East, to 50e
70% higher in Japan or Korea. Baruch-Mordo et al. [74]
identify countries where land shortage may not allow us
to achieve a target share of a 24% of energy via green
hydrogen in a 1.5  C scenario. Cross-country variability
and security of supply issues call for partnerships across
borders, much needed if SDG 7 is to be addressed
without jeopardizing other SDGs, such as those related
to poverty, growth, inequality, and peace.
Policy boosting hydrogen economy in line
with SDGs
Falling costs for RES and improving electrolyzer tech-
nologies could make green hydrogen cost competitive by
2030 [75]. For this to happen, innovation in hydrogen
industry is strictly required [76].
Dincer and Acar [77] introduce the so called ‘18S
approach’ (Figure 1) concerning those elements and di-
mensions of innovation in the hydrogen system whose
appraisal should drive public and private stakeholders in
evaluating, understanding and implementing actions and
strategies to achieve a smooth transition to a hydrogen
economy. Falcone and Hiete [78] analyze the role of vi-
sions in the transition toward a sustainable chemical in-
dustry which e among others e relies on CO2 as a
feedstock and hydrogen as reducing agent, and stress the
key role that corporate actors play in any transition, even
Figure 1
18S approach for hydrogen transition, Source: [77].
Current Opinion in Green and Sustainable Chemistry 2021, 31:100506
4 Sustainable Chemistry and the UN SDGs
more in disruptive ones such as the one toward a hydrogen
economy. A policy implementation which ‘appears certain
and credible’ is important for stakeholders to invest in
low-carbon long-lived capital-stocks to avoid sunk costs
[79]. BloombergNEF [70] present a list of signs for which
potential investors should watch out to make up their
mind whether a hydrogen economy is emerging or not.
Kovac et al. [80] point out that ‘without market and
hydrogen acceptance in the rest of the world, investments
will be wasted’ stressing that the transition is a global
challenge and requires thus acceptance in industry and
the wider public. Building on membership data of
hydrogen associations across Europe, de Klerk Wolters
[81] provides an outline of the various sectors that sup-
port hydrogen economy and their geographic context
emphasizing that the hydrogen has reached a broader
basis of supporters. For researchers, the hydrogen econ-
omy is both a chance for greater public acceptance and for
immense funding but could also pose a risk if research not
directly aligned with a hydrogen economy receives less
funding in the future. The prospect of positively
contributing to a number of SDGs (the expected reduc-
tion of air pollution alone should allow to make progress in
several SDGs, e.g. a study by Zhao et al. [82] for the
positive impacts of a reduced air pollution on SDGs in
China) must be regarded as a driver for the transition
toward a hydrogen economy.
Although, it is paramount to build upon a heuristic view
of required changes to start inspecting which actors
could foster or restrain innovations [83], a focus on na-
tional systems of innovation and policy has much to
contribute to energy transition [74,75]. There are several
national incentives for ensuring the low-carbon origin to:
(i) promote the hydrogen production (e.g. the
Netherlands, Norway, and so on.); (ii) foster the use of
hydrogen in the transport sector (e.g. Belgium, Germany,
Italy, and so on); and (iii) encourage the vehicle purchase
(e.g. France, Spain, Norway, Belgium, and so on). How-
ever, there are very few supporting policies for the use of
renewable energyebased hydrogen in industry [86], and
these are mainly based on tax exemptions tailored to the
replacement of fossil fuels (i.e. carbon tax exemption in
France, deductible investment costs in the
Netherlands). The European Commission has formally
manifested its vision on turning hydrogen into a viable
solution to achieve a higher climate ambition at a fast
pace [19]. Numerous countries have recently imple-
mented or are initiating and developing hydrogen stra-
tegies with the aim of satisfying their considerable
energy demand. Seminal hydrogen national strategies
were first released in West and North European coun-
tries (e.g. Denmark France, Germany, the Netherlands),
whereas some South European countries (e.g. Italy and
Spain) have their hydrogen strategies under consulta-
tion. Looking outside Europe, China represents the
world’s largest producer of hydrogen and is strongly
Current Opinion in Green and Sustainable Chemistry 2021, 31:100506
developing actions and strategies toward hydrogen and
fuel cell applications, with the aim of reaching a share of
10% of the domestic energy consumption by 2040 [87].
Australia is focusing on large-scale hydrogen hubs and
the long-lasting perspective of exporting large amounts
of renewable hydrogen to other countries (see in a study
by Australian Government [88]). North African coun-
tries (e.g. Algeria, Libya, Tunisia, Morocco, Egypt) have
already acknowledged the prospect to produce and
export renewable hydrogen at scale [89]. In this vein, the
partnership with European countries can be strength-
ened in the next years through the Maghreb-European
project of solar energy based hydrogen (cf. [90]).
Recently, an industry association, Hydrogen Europe, is
promoting a massive increase of electrolyzer production
within the EU and Northern Africa. The project goals are
based on some shared duties among countries for solar
hydrogen development, such as the development of
high-efficiency technologies, the development of
hydrogen transport technologies over long distance, the
measurement and monitoring of the employed technol-
ogies safety, and the effective training of experts [91].
Apparently, at this stage of technology development, the
challenge for policy-makers is not ‘fixing the market’, but
the very creation of a market for green hydrogen. This
insight calls for a mission-oriented policy approach (see a
study by Bijkerk et al. [92] on hydrogen, and [93] for the
general approach). Such missions can operationalize the
SDGs (‘grand missions’) or can be smaller missions
catering to the SDGs (e.g. plastic-free oceans in a study
by Miedzinski et al. [94]). Mission-oriented policies can
be centralized or decentralized [95]. Mission-oriented
innovation policies epitomize a novel approach,
wherein strategic public sector initiatives and the pro-
active involvement of stakeholders help catalyzing the
transition while solving public problems (e.g. social
acceptability). Overall, a new paradigm in policy making
based on a combined approach (top-down and bottom-
up) is crucial (Figure 2). Rather than concentrating on
specific sectorsdas in conventional industrial policy-
dmission-oriented policy considers problem-specific
societal challenges, where different sectors and actors
co-operate for the transition to happen [95].
The mission-oriented policy approach might help
capturing how the degree of top-down and bottom-up
policy approaches can vary according to societal prob-
lems it aims to tackle. For example, policies that use
bottom-up approaches are suitable when there is high
uncertainty and lack of consensus (e.g. innovative
financing system [89]). Conversely, strategies mainly
based on top-down approaches are more likely in areas of
high conflict about the concrete goal but somewhat high
certainty on how it could be executed (e.g. carbon tax).
This leads to the question how different components
within the approaches should be aligned, and especially
whether multiple instruments can be combined into a
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Figure 2
A combined approach on policy making, Source: authors’ elaboration.
coherent policy mix. A potential intervention scheme is
to combine a technology-push approach, able to cut
production costs,1 with a market-pull approach to foster
the market up-take of green hydrogen (e.g. feed-in tar-
iffs as implemented for the biomethane injection into
the grid).
Conclusions
The review shows that a hydrogen economy provides a
cross-sectoral perspective for a clean andddue to ex-
pected improvementsdaffordable clean energy supply
(SDG 7) and deep decarbonization in process in-
dustries. The possibility to store hydrogen or derivatives
thereof represents a game changer for the integration of
high RES shares with positive effects on some SDGs via
reduced GHG and air pollutants emissions. However,
green hydrogen needs an appropriate policy to reach a
level playing field that takes account of at least three
issues suggested by the economic analysis of the sector.
First, both centralized and distributed green hydrogen
paradigms involve significant trade-offs, in terms of
economies of scale and scope, storage and transport
needs, energy literacy. Policy-makers may evaluate
which paradigm solves the trade-offs in ways that are
most suitable towards SDGs. Second, selecting the
paradigm would require a comprehensive assessment of
how green hydrogen impacts not only SDG7, but also
other SDGs. Economic growth opportunities for devel-
oping countries well-endowed with RES may be at stake
if geopolitical power, financial resources, and technology
are unevenly distributed. Finally, the most recent cost
projections on green hydrogen should not induce too
much optimism. Deep uncertainty on the pace at which
1
Several production options are not mature enough or still under research and
development and further work is needed to reduce the costs, increase the efficiency or
improve the lifetime of the corresponding materials (cf. [99]).
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Hydrogen economy and SDGs Falcone et al. 5
the world is reaching climate tipping points and the
macroeconomic consequences of the Covid-19
pandemic makes it difficult to formulate sensible ex-
pectations on the future cost of capital. Yet, wide post-
Covid-19 recovery programmes place green hydrogen
under focus. The EU Hydrogen Strategy plans to double
the financial capacity of the InvestEU programme for
renewable hydrogen within the new recovery instru-
ment Next Generation EU. Maturity and pervasive ap-
plications across sectors are expected to be reached
between 2030 and 2050. Concerning national measures
within the EU, there is an ongoing debate on the in-
clusion of blue and green hydrogen in the Italian re-
covery plan, while Germany’s corona recovery stimulus,
already in June 2020, foresaw 9 billion Euros in in-
vestments to expand the hydrogen capacity [97]. Dincer
[98] sees the Covid-19 crisis as marking a turning point
to leave the carbon age behind and embrace a new
hydrogen age.
We argue in favor of policy actions for a hydrogen in-
dustry based on a mission-oriented approach, a new
paradigm in policy making which combines bottom-up
and top-down perspectives. In this respect, focusing
on tailored policy mixes could represent the main route
to fulfilling the socio-technical needs (e.g. in-
frastructures, health, acceptability, and so on.) and
catalyze the transition toward the green hydrogen
economy.
Declaration of competing interest
The authors declare that they have no known competing
financial interests or personal relationships that could
have appeared to influence the work reported in this
paper.
Current Opinion in Green and Sustainable Chemistry 2021, 31:100506
6 Sustainable Chemistry and the UN SDGs
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