As Iraq embarks on its first green hydrogen production project in the south of the country, it is imperative to underscore the significance of policymakers’, government bodies’, and the private sector’s willingness to prioritize this burgeoning industry in the Kurdistan Region Both the Kurdistan Region and Iraq grapple with substantial electricity shortages, with estimates suggesting the entity of said shortages is equal to three Gigawatts during peak seasons in Kurdistan and up to 13 Gigawatts across Iraq.
Green hydrogen not only offers a solution in terms of green electricity supply and redistribution but also holds the potential to decarbonize several key industries that are robustly established in the Kurdistan Region. Integrating green hydrogen into refineries, cement, and steel factories for example could revolutionize heavy industries in the region.
While green hydrogen production projects require substantial investment, both local and foreign companies, as well as financial entities, can leverage guarantees approved for renewable energy projects in Iraq's budget law for 2023-2025.
During the ninth Iraq International Energy Exhibition and Conference (IEE) held earlier this month, Iraq’s Minister of Oil, Hayan Abdul-Ghani, unveiled plans to initiate a green hydrogen project alongside a solar energy plant for the South Refineries Company. This signals Iraq's commitment to diversifying energy sources and reducing its carbon footprint. With a target annual production of 800 tons of green hydrogen through solar-powered electrolysis, Iraq aims to harness renewable resources for sustainable development.
Like many oil and gas-rich regions worldwide, the Kurdistan Region recognizes the imperative to diversify its economy, moving away from fossil fuels. Green hydrogen presents an important avenue to explore in order to develop new industries and reduce dependence on oil and gas revenues. Moreover, fostering a green hydrogen industry can create job opportunities, attract investment, and stimulate economic growth and diversification.
Christopher Anderson, CEO of Green Hydrogen Capital based in Erbil, highlighted that "There's a growing global demand for green hydrogen as countries and industries seek to decarbonize. Kurdistan could position itself as a key exporter in the green hydrogen market, especially considering its strategic geographical location."
Developing green hydrogen can benefit heavy industries in the Kurdistan Region, including high-capacity refineries, cement, and steel factories. It offers transformative benefits for such carbon-intensive sectors, significantly reducing carbon emissions, improving energy efficiency, and
contributing to a more sustainable and circular economy.
Though challenges such as legal, financial, infrastructure, technological, and regulatory issues persist, Iraq’s recently approved budget law for 2023-2025 resolved many hurdles. Dr. Jamal Kocher, Iraqi Parliament member participating in the finance committee assured that renewable energy projects would not face any legal or financial obstacles if deemed feasible.
Robert Colwell, Executive Director of Green Hydrogen Capital, emphasizes that establishing clear policies and regulatory frameworks to support green hydrogen investment and development is crucial for attracting private investment and ensuring environmental and safety standards.
In addition to the above-mentioned benefits, it is important to also underscore that the potential to earn carbon credits provides a financial incentive for companies to invest in green hydrogen technologies and transition to more sustainable practices.
Omar Ahmad is editor-in-chief of Rudaw Media Network's economic desk.
The views expressed in this article are those of the author and do not necessarily reflect the position of Rudaw.
