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Signposts for the gas outlook

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Authors: Peter Zeniewski and Tae-Yoon Kim*

Global gas markets, business models and pricing arrangements are all in a state of flux. There is great dynamism, both on demand and supply, but still plenty of questions on what the future might hold and what a new international gas market order might look like. The World Energy Outlook doesn’t have a forecast for what gas markets will look like in 2030 or 2040, but the scenarios and analysis provide some insight into the factors that will shape where things go from here.

The China effect on gas markets

Gas accounts for 7% of China’s energy mix today, well below the global average of 22%. But China is going for gas, and this surge in consumption has largely erased talk of a global gas glut. China’s gas demand expanded by a dramatic 15% in 2017, underpinned by a strong policy push for coal-to-gas switching in industry and buildings as part of the drive to “turn China’s skies blue again” and improve air quality. Liquefied natural gas (LNG) imports grew massively, with China surpassing Korea as the second largest LNG importer in the world. Preliminary data for 2018 suggest similarly strong double-digit growth, putting China well on track to become the world’s largest gas-importing country.

In the IEA’s New Policies Scenario (NPS), the share of gas in China’s energy mix is projected to double to 14% by 2040, and most of the increase is met by imports that reach parity with those to the European Union. Demand for LNG is set to quadruple over the same period, accounting for nearly 30% of global LNG trade flows. China has long driven global trends for oil, coal and, more recently, also for many renewable technologies. The “China effect” on gas markets is now becoming a pivotal element for those working in gas markets; this is a key reason why gas does relatively well in all the WEO scenarios.

There is no such a thing as ‘emerging Asian demand’

While China has been grabbing headlines with its unprecedented growth in demand, other emerging Asian markets – notably India, Southeast Asia and South Asia – are also increasing their presence in the global gas arena. Emerging economies in Asia as a whole account for around half of total global gas demand growth in the NPS: their share of global LNG imports doubles to 60% by 2040.

However, although the region is often dubbed “emerging Asia” as a whole, it is difficult to generalise about its gas prospects. Gas has been a niche fuel in some markets (such as India) while it is well established in some others (parts of Southeast Asia, Pakistan and Bangladesh). While there appears to be plenty of room for further growth in aggregate, with the share of gas in the region’s energy mix at less than 10%, this does not necessarily mean that all emerging Asian markets are poised to follow the path that China is taking. A wide variety of starting points and policy, supply security and infrastructure considerations make each emerging Asian market quite distinct. This requires a much more granular approach to understand the outlook for gas across this region.

Economics and policies need to be aligned for gas to grow

The case for gas can be compelling for countries that have significant resources within relatively easy reach, such as those in the Middle East or in much of North America. In these countries, there is scope for gas to displace or outcompete other fuels purely on economic grounds. However, the commercial case for gas looks weaker in many parts of emerging Asia, a key source of demand growth in our projections to 2040. Gas needs to be imported and transportation costs are significant; competition is formidable from amply available coal and renewables; gas infrastructure is often not yet in place in many cases; and consumers and policy makers are sensitive to questions of affordability.

Gas can be a good match for the developing world’s fast-growing urban areas, generating heat, power and mobility with fewer CO2 and local pollutant emissions than coal or oil. In carbon-intensive systems or sectors, it can play an important role in accelerating energy transitions. But – as China has shown – economic drivers need to be supplemented by a favourable policy environment if gas is to thrive. Without such a strategic choice in favour of gas, the fuel could be pushed to the margins by cheaper alternatives.

The main growth sector is no longer power

For now, power generation is the largest gas-consuming sector. Gas has some important advantages for power generation, notably the relatively low capital costs of new plants and the ability to ramp generation up and down quickly – an important attribute in systems that are increasingly rich in solar and wind power. But this is also the sector in which competition is most formidable; lower-cost renewables and the rise of other technologies for short-term market balancing – including energy storage – diminish the prospects for gas growth in the power sector, particularly in the Sustainable Development Scenario (SDS). A similar dynamic is visible in the use of gas to provide heat in buildings, where prospects are constrained by electrification and energy efficiency.

The largest increase in gas demand in the New Policies Scenario is projected to come from industry. Where gas is available, it is well suited to meeting industrial demand. Competition from renewables is more limited, especially for provision of high-temperature heat. Gas typically beats oil on price, and is preferred to coal for convenience (once the infrastructure is in place) as well on environmental grounds. Gas demand in industry is also projected to be more resilient in the SDS than power generation, where demand is far more sensitive to growth of renewables.

The rise of industrial demand in gas importing countries can provide the sort of reliable, ‘baseload’ demand that can underpin new upstream and infrastructure developments around the world. However, it also means less flexibility to respond to fluctuations in price, as industrial consumers can rarely switch to other fuels if gas prices rise, while power systems typically are more responsive and flexible in modulating their fuel mix.

The risk of market tightening in the 2020s has eased, as competition for new gas supply heats up

There was a distinct lull in new LNG project approvals for three years from 2015, but a pickup in approvals in the second half of 2018, led by a major new project on Canada’s west coast, is easing the risk of an abrupt tightening in gas markets around the mid-2020s.

Qatar is among the frontrunners developing new low-cost export capacity, based on its huge potential to tap into liquids-rich gas and leverage its vast existing infrastructure complex at Ras Laffan. But there is a long list of other potential export projects around the world, from the Russian Arctic to East Africa.

The extraordinary growth of shale output means that, by 2025, one in every four cubic metres of gas produced worldwide is projected to come from the United States. With a large number of proposed LNG export projects, the United States is likely to become a cost benchmark for a diverse set of countries looking to expand or announce their presence in international gas markets. International gas supply in the past has been quite concentrated, dominated by a major pipeline exporter (Russia) and a single giant of LNG (Qatar). Supply in the future looks increasingly diverse and competitive, with LNG taking an increasing share of long-distance trade.

LNG is changing the business of trading gas …

The ramp up of new destination-flexible, hub-priced LNG supplies coming out of the United States is providing a catalyst for change in the global gas market. For decades, international gas trade (both pipeline gas and LNG) was dominated by point-to-point deliveries of gas sold under long-term oil-indexed contracts between integrated gas suppliers and monopoly utility buyers.

This model has been under pressure for some time and is now changing quickly, with a host of new market players positioning themselves between buyers and sellers. Larger portfolio players in particular are growing in importance, contracting capacity at liquefaction and regasification terminals around the world, to service a diverse range of offtake contracts across multiple markets. Smaller independents and trading houses are also emerging, taking open positions in the market, buying and selling single cargoes to take advantage of arbitrage opportunities.

European and Asian utilities have meanwhile developed their own trading capabilities, evolving away from their traditional role as passive off-takers. This expanding middle ground between buyers and sellers has helped to underpin the growth of spot LNG sales, allowing for the re-selling, swapping or redirecting of cargoes, utilising a wide variety of short- and long-term contracts.

…but don’t write off traditional long-term contracts

These recent trends do not necessarily imply the end of long-term contracting for new supply: new projects remain huge multi-billion dollar investments that require significant commitments, and there are buyers who stand ready to sign up for guaranteed long-term deliveries: in 2018, Chinese buyers alone signed long-term contracts for around 10 million tonnes per annum. Other established buyers such as Japan, South Korea, and Taiwan are likely to continue to source gas via long-term contracts.

For buyers in emerging markets, the relative attractiveness of purchasing LNG on the spot market or via short- or long-term contracts depends to a large extent on the anticipated evolution of gas demand in their domestic market, and the associated appetite to take on supply and price risk. A high level of reliance on the spot market or short-term deals implies greater exposure to price volatility as well as competition with distant markets that may be willing to pay more for gas. Import portfolios in emerging markets are therefore likely to feature a balance of firm, flexible and uncontracted gas in order to match the price and volume sensitivity of a relatively uncertain demand profile.

Not all gas is created equal

Suppliers could do much more to bolster the environmental case for gas by lowering the indirect emissions involved in extracting, processing and transporting it to consumers. In WEO-2018, a first comprehensive analysis of these indirect emissions shows that, on average, they represent around a quarter of the full lifecycle emissions from natural gas. There is also a very large spread between the lowest and the highest-emitting sources. Switching from consuming the most emissions-intensive gas to the least emissions-intensive gas would reduce emissions from gas consumption by nearly 30%, equivalent to upgrading from a traditional to a new condensing gas boiler.

This analysis doesn’t change our conclusion that, in all but the very worst cases, using gas brings environmental benefits compared with coal. But there are ways to improve the picture and, in our view, producers who can demonstrate that they have minimised these indirect emissions are likely to have an advantage.

Eliminating methane leaks – especially via regular leak detection and repair programmes – and cutting back routine flaring are some of the most cost-effective measures. In fact, many methane-reduction measures could actually end up saving money. Operators are also starting to look at electrifying upstream and liquefaction operations using low-carbon electricity. Finally, investment in hydrogen and biomethane could reduce or bypass emissions and make today’s gas infrastructure more compatible with a low-emissions future.

The gas security debate is changing

We are beginning to see the contours of a new, more globalised gas market, in which gas takes on more of the features of a standard commodity. This environment creates a new context for assessing security. While the reliability of cross-border pipeline gas continues to form a crucial part of the energy security equation, the flexibility and responsiveness of global LNG supplies are becoming increasingly important indicators (as highlighted in the IEA’s Global Gas Security Review series).

As LNG supplies lead to more interconnected markets, local supply and demand shocks have greater potential to reverberate globally (as they do in oil markets). The extent to which LNG can adequately respond to such shocks becomes a responsibility that extends beyond governments and monopoly energy suppliers, to portfolio players, traders and shippers. Moreover, the evolving premium among some consumers for greater flexibility, while in some respects positive for security, also contributes to a disconnect between buyer preferences for short-term contracts and seller requirements for long-term commitments to underpin major new infrastructure projects; this could raise questions about the timing and adequacy of investment.

Gas markets are changing: some of today’s hazards might recede but policy-makers and analysts need to be constantly aware of new risks.

*Tae-Yoon Kim, WEO Energy Analyst

IEA

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Oil and the new world order: China, Iran and Eurasia

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The world oil market will undergo a fundamental change in the future. Choosing petrodollars or oil wars is no longer a question that can be answered. With the Strategic Agreement on the Comprehensive Economic and Security Partnership between China and Iran officially signed by the Foreign Ministers of both countries in Tehran on March 27, 2021, the petrodollar theorem is broken and the empire built by the US dollar is cracked.

This is because the petrodollar has not brought substantial economic development to the oil-producing countries in the Middle East during over half a century of linkage to the US dollar.

The Middle East countries generally have not their own industrial systems. The national economies are heavily dependent on oil exports and imports of cereals and industrial products. The national finances are driven by the US dollar and the financial system that follows it.

If the Middle East countries wanted to escape the control of the dollar, they should face the threat of war from the United States and its allies – things we have seen over and over again. Just think of Saddam Hussein being supported when he was fighting Iran and later being Public Enemy No. 1 when he started trading oil in euros.

The West has always wanted the Middle East to be an oil ‘sacred cow’ and has not enabled it to develop its own modern industrial system: the lack of progress in the Middle East was intended as long-term blackmail.

In the Western system of civilisation based on exchange of views and competition, the West is concerned that Iran and the entire Middle East may once again restore the former glory and hegemony of the Persian, Arab and Ottoman empires.

China is facing the exploitation of the global oil market and the threat of its supply disruption. Relying on industrial, financial, and military strength, Europe and the United States control the oil production capital, trade markets, dollar settlements, and global waterways that make up the entire petrodollar world order, differentiating China and the Middle East and dividing the world on the basis of the well-known considerations. You either choose the dollar or you choose war – and the dollar has long been suffering.

Just as in ancient times nomadic tribes blocked the Silk Road and monopolised trade between East and West, Europe and the United States are holding back and halting cooperation and development of the whole of Asia and the rest of the planet. Centuries ago, it was a prairie cavalry, bows, arrows and scimitars: today it is a navy ship and a financial system denominated in dollars.

Therefore, China and Iran, as well as the entire Middle East, are currently looking for ways to avoid middlemen and intermediaries and make the difference. If there is another strong power that can provide military security and at the same time offer sufficient funds and industrial products, the whole Middle East oil can be freed from the dominance of the dollar and can trade directly to meet demand, and even introduce new modern industrial systems.

Keeping oil away from the US dollar and wars and using oil for cooperation, mutual assistance and common development is the inner voice of the entire Middle East and developing countries: a power that together cannot be ignored in the world.

The former Soviet Union had hoped to use that power and strength to improve its system. However, it overemphasised its own geostrategic and paracolonial interests – turning itself into a social-imperialist superpower competing with the White House. Moreover, the USSR lacked a cooperative and shared mechanism to strengthen its alliances, and eventually its own cronies began to rebel as early as the 1960s.

More importantly – although the Soviet Union at the time could provide military security guarantees for allied countries – it was difficult for it to provide economic guarantees and markets, although the Soviet Union itself was a major oil exporter. The natural competitive relationship between the Soviet Union and the Middle East, as well as the Soviet Union’s weak industrial capacity, eventually led to the disintegration of the whole system, starting with the defection of Sadat’s Egypt in 1972. Hence the world reverted to the unipolarised dollar governance once the Soviet katekon collapsed nineteen years later.

With the development and rise of its economy, however, now China has also begun to enter the world scene and needs to establish its own new world order, after being treated as a trading post by Britain in the 19th century, later divided into zones of influence by the West and Japan, and then quarantined by the United States after the Second World War.

Unlike the US and Soviet world order, China’s proposal is not a paracolonial project based on its own national interests, nor is it an old-fashioned “African globalisation” plan based on multinationals, and it is certainly not an ideological export.

For years, there has been talk of Socialism with Chinese characteristics and certainly not of attempts to impose China’s Marxism on the rest of the world, as was the case with Russia. China, instead, wishes to have a new international economic order characterised by cooperation, mutual assistance and common development.

Unlike the Western civilisation based on rivalry and competition, the Eastern civilisation, which pays more attention to harmony without differences and to coordinated development, is trying to establish a new world economic order with a completely different model from those that wrote history in blood.

Reverting to the previous treaty, between the US dollar and the war, China has offered Iran and even the world a third choice. China seems increasingly willing to exist as a service provider. This seems to be more useful for China, first of all to solve its own problems and not to get involved in endless international disputes.

It can thus be more accepted by all countries around the world and unite more States to break the joint encirclement of the “democratic” and liberal imperialism of Europe and the United States.

Consequently, China and Iran – whose origins date back almost to the same period – met at a critical moment in history. According to the Strategic Agreement on Comprehensive Economic and Security Partnership between China and Iran, China will invest up to 400 billion dollars in dozens of oil fields in Iran over the next 25 years, as well as in banking, telecommunications, ports, railways, healthcare, 5G networks, GPS, etc.

China will help Iran build the entire modern industrial system. At the same time, it will receive a heavily discounted and long-term stable supply of Iranian oil. The Sino-Iranian partnership will lay the foundations for a proposed new world order, with great respect for Eastern values, not based on some failed, decadent and increasingly radicalising principles.

Faced with the value restraint and the pressure of sanctions from the United States and Europe, China is seeking to unite the European third Rome, Indo-European Iran, the second Rome and the five Central Asian countries to create a powerful geoeconomic counterpart in the hinterland of Eurasia.

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The stages and choices of energy production from hydrogen

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There are three main ways to use hydrogen energy:

1) internal combustion;

2) conversion to electricity using a fuel cell;

3) nuclear fusion.

The basic principle of a hydrogen internal combustion engine is the same as that of a gasoline or diesel internal combustion engine. The hydrogen internal combustion engine is a slightly modified version of the traditional gasoline internal combustion engine. Hydrogen internal combustion burns hydrogen directly without using other fuels or producing exhaust water vapour.

Hydrogen internal combustion engines do not require any expensive special environment or catalysts to fully do the job – hence there are no problems of excessive costs. Many successfully developed hydrogen internal combustion engines are hybrid, meaning they can use liquid hydrogen or gasoline as fuel.

The hydrogen internal combustion engine thus becomes a good transition product. For example, if you cannot reach your destination after refuelling, but you find a hydrogen refuelling station, you can use hydrogen as fuel. Or you can use liquid hydrogen first and then a regular refuelling station. Therefore, people will not be afraid of using hydrogen-powered vehicles when hydrogen refuelling stations are not yet widespread.

The hydrogen internal combustion engine has a small ignition energy; it is easy to achieve combustion – hence better fuel saving can be achieved under wider working conditions.

The application of hydrogen energy is mainly achieved through fuel cells. The safest and most efficient way to use it is to convert hydrogen energy into electricity through such cells.

The basic principle of hydrogen fuel cell power generation is the reverse reaction of electrolysis of water, hydrogen and oxygen supplied to the cathode and anode, respectively. The hydrogen spreading – after the electrolyte reaction – makes the emitted electrons reach the anode through the cathode by means of an external load.

The main difference between the hydrogen fuel cell and the ordinary battery is that the latter is an energy storage device that stores electrical energy and releases it when needed, while the hydrogen fuel cell is strictly a power generation device, like a power plant.

The same as an electrochemical power generation device that directly converts chemical energy into electrical energy. The use of hydrogen fuel cell to generate electricity, directly converts the combustion chemical energy into electrical energy without combustion.

The energy conversion rate can reach 60% to 80% and has a low pollution rate. The device can be large or small, and it is very flexible. Basically, hydrogen combustion batteries work differently from internal combustion engines: hydrogen combustion batteries generate electricity through chemical reactions to propel cars, while internal combustion engines use heat to drive cars.

Because the fuel cell vehicle does not entail combustion in the process, there is no mechanical loss or corrosion. The electricity generated by the hydrogen combustion battery can be used directly to drive the four wheels of the vehicle, thus leaving out the mechanical transmission device.

The countries that are developing research are aware that the hydrogen combustion engine battery will put an end to pollution. Technology research and development have already successfully produced hydrogen cell vehicles: the cutting-edge car-prucing industries include GM, Ford, Toyota, Mercedes-Benz, BMW and other major international companies.

In the case of nuclear fusion, the combination of hydrogen nuclei (deuterium and tritium) into heavier nuclei (helium) releases huge amounts of energy.

Thermonuclear reactions, or radical changes in atomic nuclei, are currently very promising new energy sources. The hydrogen nuclei involved in the nuclear reaction, such as hydrogen, deuterium, fluorine, lithium, iridium (obtained particularly from meteorites fallen on our planet), etc., obtain the necessary kinetic energy from thermal motion and cause the fusion reaction.

The thermonuclear reaction itself behind the hydrogen bomb explosion, which can produce a large amount of heat in an instant, cannot yet be used for peaceful purposes. Under specific conditions, however, the thermonuclear reaction can achieve a controlled thermonuclear reaction. This is an important aspect for experimental research. The controlled thermonuclear reaction is based on the fusion reactor. Once a fusion reactor is successful, it can provide mankind with the cleanest and most inexhaustible source of energy.

The feasibility of a larger controlled nuclear fusion reactor is tokamak. Tokamak is a toroidal-shaped device that uses a powerful magnetic field to confine plasma. Tokamak is one of several types of magnetic confinement devices developed to produce controlled thermonuclear fusion energy. As of 2021, it is the leading candidate for a fusion reactor.

The name tokamak comes from Russian (toroidal’naja kamera s magnitnymi katuškami: toroidal chamber with magnetic coils). Its magnetic configuration is the result of research conducted in 1950 by Soviet scientists Andrei Dmitrievič Sakharov (1921-1989) and Igor’ Evgen’evič Tamm (1895-1971), although the name dates back more precisely to 1957.

At the centre of tokamak there is a ring-shaped vacuum chamber with coils wound outside. When energized, a huge spiral magnetic field is generated inside the tokamak, which heats the plasma inside to a very high temperature, which achieves the purpose of nuclear fusion.

Energy, resources and environmental problems urgently need hydrogen energy to solve the environmental crisis, but the preparation of hydrogen energy is not yet mature, and most of the research on hydrogen storage materials is still in the exploratory laboratory stage. Hydrogen energy production should also focus on the “biological” production of hydrogen.

Other methods of hydrogen production are unsustainable and do not meet scientific development requirements. Within biological production, microbial production requires an organic combination of genetic engineering and chemical engineering so that existing technology can be fully used to develop hydrogen-producing organisms that meet requirements as soon as possible. Hydrogen production from biomass requires continuous improvement and a vigorous promotion of technology. It is a difficult process.

Hydrogen storage focused on the discovery of new aspects of materials or their preparation is not yet at large-scale industrial level. Considering different hydrogen storage mechanisms, and the material to be used, also needs further study.

Furthermore, each hydrogen storage material has its own advantages and disadvantages, and most storage material properties have the characteristics that relate to adductivity and properties of a single, more commonly known material.

It is therefore believed that efforts should be focused on the development of a composite hydrogen storage material, which integrates the storage advantages of multiple individual materials, along the lines of greater future efforts.

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The advantages of hydrogen and Israel’s warnings

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Hydrogen is the most common element in nature. It is estimated to make up 75% of the mass of the universe. Except for that contained in air, it is primarily stored in water in the form of a compound, and water is the most widely distributed substance on earth.

Hydrogen has the best thermal conductivity of all gases – i.e. ten times higher than most of them – and it is therefore an excellent heat transfer carrier in the energy industry.

Hydrogen has good combustion performance, rapid ignition, and has a wide fuel range when mixed with air. It has a high ignition point and rapid combustion rate.

Except for nuclear fuels, the calorific value of hydrogen is the highest among all fossil and chemical fuels, as well as biofuels, reaching 142.35 kJ/kg. The calorie per kilogram of hydrogen burned is about three times that of gasoline and 3.9 times that of alcohol, as well as 4.5 times that of coke.

Hydrogen has the lightest weight of all elements. It can appear as gas, liquid, or solid metal hydride, which can adapt to different storage and transport needs and to various application environments.

Burning hydrogen is cleaner than other fuels –  besides generating small amounts of water – and does not produce hydrogen azide as carbon monoxide, carbon dioxide (harmful to the environment), hydrocarbons, lead compounds and dust particles, etc. A small amount of hydrogen nitride will not pollute the environment after proper treatment, and the water produced by combustion can continue to produce hydrogen and be reused repeatedly.

Extensive use practices show that hydrogen has a record of safe use. There were 145 hydrogen-related accidents in the United States between 1967 and 1977, all of which occurred in petroleum refining, the chlor-alkali industry, or nuclear power plants, and did not really involve energy applications.

Experience in the use of hydrogen shows that common hydrogen accidents can be summarized as follows: undetected leaks; safety valve failure; emptying system failure; broken pipes, tubes or containers; property damage; poor replacement; air or oxygen and other impurities left in the system; too high hydrogen discharge rate; possible damage of pipe and tube joints or bellows; accidents or tipping possibly occurring during the hydrogen transmission process.

These accidents require two additional conditions to cause a fire: one is the source of the fire and the other is the fact that the mixture of hydrogen and air or oxygen must be within the limits of the possibility of fires or violent earthquakes in the local area.

Under these two conditions, an accident cannot be caused if proper safety measures are established. In fact, with rigorous management and careful implementation of operating procedures, most accidents do not theoretically occur.

The development of hydrogen energy is triggering a profound energy revolution and could become the main source of energy in the 21st century.

The United States, Europe, Japan, and other developed countries have formulated long-term hydrogen energy development strategies from the perspective of national sustainable development and security strategies.

Israel, however, makes warning and calls for caution.

While the use of hydrogen allows for the widespread penetration of renewable energy, particularly solar and wind energy – which, due to storage difficulties, are less available than demand – Israeli experts say that, despite its many advantages, there are also disadvantages and barriers to integrating green hydrogen into industry, including high production costs and high upfront investment in infrastructure.

According to the Samuel Neaman Institute’s Energy Forum report (April 11, 2021; authors Professors Gershon Grossman and Naama Shapira), Israel is 7-10 years behind the world in producing energy from clean hydrogen.

Prof. Gideon Friedman, actingchief scientist and Director of Research and Development at the Ministry of Energy, explains why: “Israel has a small industry that is responsible for only 10% of greenhouse gas emissions – unlike the world where they are usually 20% – and therefore the problems of emissions in industry are a little less acute in the country.”

At a forum held prior to the report’s presentation, senior officials and energy experts highlighted the problematic nature of integrating clean hydrogen into industry in Israel.

Dr. Yossi Shavit, Head of the cyber unit in industry at the Ministry of Environmental Protection, outlined the risks inherent in hydrogen production, maintenance and transportation, including the fact that it is a colourless and odourless gas that makes it difficult to detect a leak. According to Dr. Shavit, hydrogen is a hazardous substance that has even been defined as such in a new regulation on cyber issues published in 2020.

Dr. Shlomo Wald, former chief scientist at the Ministry of Infrastructure, argued that in the future hydrogen would be used mainly for transportation, along with electricity.

Prof. Lior Elbaz of Bar-Ilan University said that one of the most important things is the lack of laws: “There is no specific regulation for hydrogen in Israel, but it is considered a dangerous substance. In order for hydrogen to be used for storage and transportation, there needs to be a serious set of laws that constitute a bottleneck in our learning curve.” “Israel has something to offer in innovation in the field, but government support will still be needed in this regard – as done in all countries – and approximately a trillion dollars in the field of hydrogen is expected to be invested in the next decade.”

Although the discussion was mainly about Israel’s delay in integrating clean hydrogen into the industry, it has emerged that Sonol (Israel’s fuel supplier ranking third in the country’s gas station chain) is leading a project, together with the Ministry of Transport, to establish Israel’s first hydrogen refuelling station. “We believe there will be hydrogen transportation in Israel for trucks and buses,” said Dr. Amichai Baram, Vice President of operations at Sonol. “Hydrogen-powered vehicles for the country – albeit not really cheap in the initial phase – and regulations promoted in the field, both for gas stations and vehicles.”

Renewables account for only 6% of Israel’s energy sources and, according to the latest plans published by the Ministry of Energy and adopted by the government, the target for 2030 is 30%.

This is an ambitious goal compared to reality, and also far from the goal of the rest of the countries in the world that aim at energy reset by 2050.

The authors of the aforementioned report emphasize that fully using the clean hydrogen potential is key to achieving a higher growth target for Israel.

According to recommendations, the State should critically examine the issue in accordance with Israel’s unique conditions and formulate a strategy for the optimal integration of hydrogen into the energy economy.

Furthermore, it must support implementation, both through appropriate regulations and through the promotion of cooperation with other countries and global companies, as well as through investment in infrastructure, and in research and development, industry and in collaboration with the academic world.

There are countries in Europe or the Middle East that have already started green energy production projects, and finally it was recommended to work to develop Israeli innovations in the field, in collaboration with the Innovation Authority and the Ministry of Energy.

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