Green Hydrogen Boom Faces Cost and Infrastructure Hurdles Amid Climate Push

Countries worldwide are pushing ahead with green hydrogen plans as part of broader climate change strategies. Since 2023, nations like Germany, Australia, and the US have outlined major investments, yet significant hurdles remain. Meanwhile, discussions on fiscal policies and governance structures continue in parallel, highlighting the complexity of balancing economic and environmental goals.

Green hydrogen has gained traction as a tool for decarbonising industries where direct electrification proves difficult. Unlike renewable energy sources such as wind or solar, it functions as an energy carrier rather than a primary power source. Countries including Saudi Arabia, Chile, and Morocco—alongside the European Union's REPowerEU initiative—have all unveiled national strategies to scale up production. Yet, despite this momentum, key challenges persist: high production costs, insufficient renewable energy capacity, and gaps in transport and storage infrastructure. Regulatory uncertainties and supply chain bottlenecks for electrolyzers further complicate progress.

The Global Stocktake under the Paris Agreement serves as a mechanism to assess collective climate change efforts and guide future action. This review process helps nations align their policies with long-term emissions targets. However, the transition to cleaner energy is not the only pressing issue on the agenda.

In fiscal policy, the debate around the Fiscal Responsibility and Budget Management (FRBM) framework allows for flexibility during economic crises. Experts note that fiscal consolidation does not always demand cuts to capital expenditure, though rising interest payments can limit financial manoeuvrability even when revenues grow. Separately, discussions on governance highlight that a Governor's veto in state legislation is not absolute and typically relies on the Council of Ministers' advice. Prolonged delays in granting assent, however, risk weakening federal principles.

On climate adaptation, Heat Action Plans have emerged as critical tools to mitigate the health and economic fallout from extreme heat. These measures form part of broader strategies to build resilience against worsening weather conditions.

Semiconductors also remain a strategic priority due to their indispensable role in both civilian and defence technologies. The concentration of their supply chains adds to their geopolitical significance, underscoring the need for diversified and secure production networks.

The push for green hydrogen faces practical barriers, from cost and infrastructure to regulatory gaps. Countries are moving forward with investment plans, but overcoming these obstacles will determine how quickly the technology can scale. At the same time, fiscal frameworks and governance structures must adapt to support economic stability and federal balance. The outcomes of these efforts will shape both climate change progress and broader policy resilience in the years ahead.