On October 16, 2023, the Georgian representative office of the World Bank held a workshop in its office in Tbilisi, where they presented a report prepared on the topic of hydrogen

The Ministry of Economy and Sustainable Development of Georgia, members of the Georgian Hydrogen Committee, National Hydrogen Association, ADB, KFW, AFD, JICA, USAID, EBRD, EIB, Ilia State and Technical Universities of Georgia, private energy consultants and other energy community members were invited to listen to the report.  The meeting was chaired by World Bank Senior Energy Specialist Florian Keith.

Mrs. Margalita Arabidze gave a welcome speech on behalf of the Ministry of Economy and Sustainable Development. Shhe emphasized the importance of clean hydrogen energy in achieving Georgia’s energy security, decarbonization and countries compliance with international conventions. A hydrogen committee was established in the country under the auspices of the Ministry, where the work on the formation of the national hydrogen strategy is actively underway. The Ministry has once again expressed its willingness and strong desire to help the sector, the importance and necessity of supporting the sector, hearing new initiatives, and discussing them.

The meeting was opened by the spokesman of the World Bank, Stephan Gill, with an overview of the hydrogen market. The problem was emphasized – pure hydrogen has a rather small share in the market, about 2%, of which 1-1% is green hydrogen and blue. Therefore, in the total production and consumption, which is 100 megatons per year, 900 megatons of CO2 are emitted due to the large amount of gray hydrogen. According to the vision of the World Bank, the price of green hydrogen, which is about 5-6 times higher than the price of gray hydrogen, will be only 2 times higher by 2030, will level off in 2040, and will even be relatively cheap in 2050, which means that the competitiveness of clean hydrogen and the efficiency of its production will gradually increase. World Bank, as a result of its analysis of projects, shared the view that the production of 1 million tons of green hydrogen requires 10 GW of electrolyzers, 20 GW of renewable energy sources and an investment of 30 billion dollars, indicating the capital-intensity of its production. Currently, the list of projects until 2030 consists of more than 1000 projects (61% developed countries, 6% China) and their total value is 319 billion dollars.

The next speaker was Teona Elizbarashvili, representative of the World Bank, who presented a report focused on Georgia. The Government of Georgia has set a goal of increasing the share of renewable energy in final energy consumption to 27.4% by 2030.The country also committed to reduce greenhouse gas emissions by 35% compared to the 1990 baseline, while aiming for a 50-57% reduction in international financial and technological assistance. Despite active engagement in the sector, so far, there is no direct reference to hydrogen usage in any energy law or climate-related legislation within Georgia. The report highlighted the difficulties of hydrogen transportation for Georgia due to infrastructure and long distances to potential buyers, apart from this – limited industrial share in the economy, expensive plants, high costs of hydrogen vehicles and a shortage of skilled labor. However, it is also interesting to produce hydrogen to obtain the final product ammonium, which is currently being exported from Georgia to the international market, both in the Caucasus, as well as in Europe and South America. In conclusion, it can be said that according to the World Bank report, despite the ambiguity of the existence of a competitive advantage at this stage, there are indeed quite positive aspects in the development perspective of the sector, such as the possible construction of green ammonium plants and the kfw-funded project to switch municipal transport to hydrogen fuel. Therefore, in the direction of pure hydrogen production and export, the issue is relevant and requires deep study.

The meeting concluded with the presentation of the concept template of the national hydrogen strategy developed by the consulting company – GOPA Intec. Mr. Vakhtang Begashvili and Mr. Mumran Margvelashvili spoke about it. While creating the concept template, it was analyzed both global trends about the importance and development of green hydrogen, as well as, of course, the perspectives seen specifically considering the resources and natural environment of Georgia. It is worth noting the fact that the perspective of Georgia was discussed not only locally, within the country, but also as a regional subject, both of the Caucasus, as well as of Central Asia and Europe. For example, the agreements concluded between Azerbaijan and the European Union, as well as between Germany and Kazakhstan, where Georgia is considered as a transit country for green hydrogen and products produced from it, were mentioned. A part of the concept template is also an action plan, in the process of its formation, Georgia’s place in the world supply chain of green hydrogen will be gradually revealed. The template basically set out the team’s vision, principles and priorities to properly envision and analyze the hydrogen energy sector. During the creation of this document, Gopa Intec was consulted by the Ministry of Economy and Sustainable Development of Georgia, CSE, Oil and Gas Corporation and Semek, and they expressed their special gratitude to Professors from Hamburg University of Technology, Mr. Jachin Gorre (GRINIX Energy Solutions) and Ms. Ketevan Papashvili (Hydrogen National Association) for making a significant contribution to the preparation of the document.