Modelling Future Global Renewable Hydrogen Trade under Competitive and Cooperative Market Structures

Abstract

Renewable hydrogen trade is expected to play an important role in achieving deep decarbonisation by linking regions with abundant renewable energy resources to those with high demand and limited domestic supply potential. Despite its importance, significant uncertainty remains regarding the formation of global hydrogen markets, the scale of hydrogen trade, and the distribution of economic benefits among participating regions. This thesis advances knowledge by developing modelling frameworks to analyse global renewable hydrogen trade under three alternative market structures: perfect competition, strategic imperfect competition, and cooperative bargaining. These frameworks integrate renewable hydrogen supply and demand functions to endogenously determine prices, traded volumes, and economic surplus distribution in a fully decarbonised energy system.

The findings suggest that under perfect competition, global hydrogen demand from emerging end-use sectors could reach 234 Mt by 2050, with 31% met through international trade at average prices around USD 3.3/kg. Major trade corridors identified include North Africa to Europe, and South America to Japan and South Korea, revealing substantial economic benefits for importing regions when social welfare is maximized. When strategic imperfect competition is introduced, total demand in major import regions declines by up to 40% relative to perfect competition, and prices rise to a minimum of USD 4.5/kg, thereby significantly eroding consumer welfare. In contrast, cooperative behaviour can recover much of the efficiency lost under strategic competition, with all agents benefiting from cooperation. Prices decline across major import regions, while total hydrogen uptake increases by 63% relative to the non-cooperative baseline. Sensitivity analyses show that financing costs exert the strongest influence on global hydrogen trade compared with regional demand variation and import diversification policies.

Overall, the thesis provides new quantitative insights into global renewable hydrogen trade and develops novel modelling frameworks to simulate the development of future hydrogen markets that support climate change mitigation objectives.