Research Institute for Sustainability Helmholtz Centre Potsdam

Is Green Hydrogen a Development Opportunity for Emerging Economies?

23.08.2023

Green hydrogen will likely play a crucial role in the global energy transition. RIFS Fellow Beatriz Couto Ribeiro is assessing the opportunities for Latin American economies to enter green hydrogen value chains. In this interview, she explains her research.

Fellow Beatriz Ribeiro
Fellow Beatriz Couto Ribeiro.


Could you briefly outline the focus of your research and how it came about?

Beatriz Couto Ribeiro: During my PhD studies, I primarily researched innovation policies targeted at the energy transition in Europe. Traditionally, utilities face regulatory constraints that affect their incentives and abilities to innovate. However, with the critical challenges of climate change, energy decentralization, digitalization, and the imperative to reduce CO2 emissions, there's mounting pressure on utilities to evolve. To address these demands, some national regulatory authorities began to offer innovation incentives to support such technological change. During my doctorate I evaluated the impact of these policies using different quantitative methods.

Towards the conclusion of my PhD, my interest shifted towards green hydrogen because it will be an essential resource for completing the energy transition and, potentially, an export opportunity for emerging economies such as my home country, Brazil. This led me to apply for the RIFS fellowship with a research proposal to assess the opportunities for Latin American economies to enter green hydrogen value chains.

What can you tell us about the project that you plan to pursue during your fellowship?
B. C. R.: My project revolves around leveraging the emerging green hydrogen economy for the benefit of Latin American countries. The scope of this research will extend beyond the final export product (hydrogen) to assess countries’ existing capacities and future potential to produce other components along the green hydrogen value chain.

The project unfolds in two distinct steps. Firstly, I am conducting a comprehensive desk research that uses economic complexity metrics and trade data to study the existing export profiles of Latin American countries. I will identify products related and proximate to hydrogen components where these nations already possess comparative advantages and identify potential areas that can be nurtured for growth.
To complement the quantitative findings, I intend to conduct expert interviews to understand how Latin American policymakers intend to promote investments in this sector and how local production of different components might be fostered through regulations, industrial policies, or international collaboration. By considering these broader dynamics, my research aims to provide a more holistic perspective on how Latin American countries can strategically exploit green hydrogen as a development opportunity.

How do you currently see the role of STI policies and programmes in promoting sustainable development and innovation in infrastructure sectors?
B. C. R.: In my view, Science, Technology, and Innovation (STI) policies and programmes are pivotal in propelling sustainable development and cultivating innovation within infrastructure sectors, especially within developing countries.
Historically, developing countries have heavily relied on the export of a limited number of primary commodities to generate their main export earnings. This dependency on commodities exposes economies to economic fluctuations as commodity prices decline over time. The absence of differentiation among commodity producers escalates competition in global markets, and existing productivity disparities exacerbate these challenges.

To achieve more sustainable and less volatile growth, it becomes imperative for developing economies to invest in innovation and diversify their export portfolios by turning to complex manufactured goods or high-skilled services. Research on economic complexity, one of the methods employed in my projects, shows that countries which adopt these high-value products generally experience accelerated development, while those clinging to natural resources tend to lag behind.

However, transitioning to the production of advanced goods is not straightforward. The tacit nature of relevant knowledge can complicate knowledge transfer, and developed economies tend to protect competitive advantages within their borders – and increasingly so. These advantages usually rest on specialized industries, robust national innovation systems, accumulated research knowledge, and a skilled workforce. Well-designed and targeted STI or industrial policies in developing countries are important to support the creation of these capabilities.

What new insights do you hope to generate through your research at RIFS?
B. C. R.: I hope to identify the components in the new green hydrogen value chain that Latin American countries could and should specialize in. However, where specialization is not feasible, I aim to identify the related technologies that could enable the future production of these export goods. My goal is to provide actionable insights that can empower Latin American countries to strategically position themselves in the evolving hydrogen-driven global landscape.

 

Contact

Sabine Letz

Sabine Letz

Press Officer
sabine [dot] letz [at] rifs-potsdam [dot] de
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