Skip to content Skip to footer

Loading Results

Green hydrogen: a key part to play in Ireland's transition to a low-carbon economy

09 July, 2021

Ireland has committed to tackling climate change by reducing emissions to net zero by 2050. Overcoming this challenge will require a monumental shift throughout society, but solutions based on existing technologies are already available.

Renewables such as wind and solar are the primary tools we have to decarbonise our power system. However, the variability of renewables doesn't pair well with our need for on-demand energy. A complementary technology is therefore required to act as a buffer between human demand and the energy provided by nature. Green hydrogen is the leading candidate for addressing this, thereby unlocking the widespread adoption of renewables.

An illustrative graphic showing green-energy resources.

Traditionally, hydrogen has been produced via carbon-intensive processes. Electrolysis is a clean alternative, which produces hydrogen by splitting water into its constituent parts (hydrogen and oxygen), and is becoming increasingly affordable. When the electrolyser is powered by renewable energy sources, such as wind and solar power, a zero-carbon fuel is produced in the form of "green" hydrogen. This fuel can play a critical role in enabling the decarbonisation of Ireland's energy system as it produces zero GHG emissions.

Simplified green hydrogen production process

An illustrative graphic of the simplified production process of green hydrogen.

At present, Ireland relies heavily on carbon-based fuels, making up 86% of all energy consumed in 2019. The majority of these carbon-based fuels are used for electricity production, heat and transport. Each sector presents unique decarbonisation challenges; however, all of their pathways to net zero could be greatly aided by green hydrogen.


Ireland is uniquely positioned as an island in the Atlantic on the west coast of Europe and has significant renewable resources with its large coastal regions and strong winds. Amongst its European peers, Ireland is in a privileged position of holding some of the largest potential for renewable electricity, particularly with wind generation. However, as Ireland adds more renewable electricity generation capacity, other challenges arise with the reduction of "on-demand" fossil fuel generators. This is particularly challenging when it comes to the predictability, stability and consistency of renewable sources—both wind and solar—as they play a greater role in powering our economy. For example, on a windless cloudy day, wind and solar farms produce very little electricity, and zero-carbon power generation solutions are required.

Heat – Residential

Housing in Ireland is relatively low density with a significant portion of the population living in rural locations. Much of the housing is poorly insulated and is currently heated by fossil fuels. Coal, turf and oil are used extensively for home heating which produces significant emissions. While heating homes via electricity is a good solution, the upgrading of older homes to the required level of efficiency requires expensive and inconvenient retrofitting e.g., external insulation. Due to the cost and complexity of retrofitting the legacy housing stock, a multifaceted approach will be required.

Approximately one third of Irish households are on, or near, the natural gas grid. If the gas supply was decarbonised, for example, with biogas or green hydrogen, this would quickly address significant portions of the Irish heat-related carbon emissions. Interestingly hydrogen has been used for home heating and cooking in Ireland already. Hydrogen was a significant component of town gas used in Ireland up until the 1980s.

Heat – Industrial

Large scale and high-temperature industrial heating can be expensive to electrify (or, in certain cases, non-viable). At present, most high heat applications are powered by gas, including some of Ireland's largest emitters, such as steel and cement production. Decarbonising this sector while maintaining competitiveness and employment presents a significant challenge. Green hydrogen is a zero-carbon fuel that could be adopted quickly, requiring minimal changes to existing infrastructure.


Transport represents the largest category of emissions in Ireland and includes heavy vehicles (trains, buses, trucks), aviation, marine and light vehicles (passenger cars, light vans).

A light vehicle requires relatively little energy and is therefore well suited to electrification. Heavy vehicles, however, require significant energy. This high energy demand, paired with very heavy batteries and poor energy density (compared to liquid fuels), make the electrification of heavy vehicles unrealistic without major technological breakthroughs.

Molecular fuels such as hydrogen (and hydrogen derivatives such as ammonia or synthetic fuels) are well suited for these high energy-demand applications. As the cost of green hydrogen falls, it is likely to play a key role in decarbonising this sector, including Ireland's significant HGV fleet, agricultural vehicles, and marine and aviation transport – each of which plays a critical role in Ireland's economy.

Illustration of the potential role of green hydrogen in optimising renewable energy

An illustrative chart: green hydrogen production and usage.

Ireland's unique opportunities

Ireland's isolated island geography presents unique challenges and opportunities for the country. As Ireland shifts from an importer of fossil fuels to an independent energy producer, we become responsible for ensuring our own security, even when our new primary energy source of renewables is unavailable.

Opportunities in Ireland include:

  • Optimisation of our abundant renewable resources by creating a complementary hydrogen network and renewable electricity system
  • Becoming a leader in green hydrogen through the development of a Green Hydrogen Strategy as part of Ireland's Climate Action Plan
  • Development of partnerships with other countries. For example, there are public letters of intent for the sale of green hydrogen from Morocco to Germany or from Australia to Japan
  • Leveraging existing investments. For example, minimal repurposing of existing gas pipeline infrastructure is required to transport hydrogen, as the gas network was upgraded from lead to polypropylene a number of years ago

Examples of ongoing hydrogen projects on the island of Ireland in 2021

  • Belfast has launched the island's first zero-emission hydrogen-powered buses with the aim of reaching 145 buses
  • Gas Networks Ireland released their long-term Decarbonisation Strategy (Vision 2050), which envisions hydrogen as a natural gas replacement
  • Dublin will see a fleet of hydrogen buses following a successful trial as part of the Hydrogen Mobility Ireland initiative, in partnership with Bus Éireann, Dublin Bus, Dublin City University and Dublin Airport
  • Regional hydrogen production facilities have been backed by private companies across the country
  • ESB has announced ambitions for a green hydrogen production facility at Moneypoint
  • The EU-funded GENCOMM project is working on a hydrogen production and testing facility in Antrim

The key actions to take now

Ireland needs to start implementing pilot projects as soon as possible to gain practical experience and capitalise on efficiencies through learning curves and scale effects on production and distribution and equipment, such as electrolysers. Developing projects today is important to ensure continuous demand growth, which justifies the implementation of the required hydrogen infrastructure to meet future greenhouse gas (GHG) reduction targets. In addition, the regulatory framework, including subsidies, taxes and levies, has a huge impact on CapEx and OpEx, which can dramatically swing the economics of projects. It is essential that the government pursues supportive hydrogen policies and creates a suitable regulatory framework that encourages the required investments.

Priorities for management teams

  • Prepare for a decarbonised economy, which will see significant cost increases for carbon-emitting fuels
  • Identify new opportunities that arise with Ireland's shift towards energy independence, with the possibility of Ireland becoming a net energy exporter
  • Develop a company-specific hydrogen strategy including technological requirements, M&A activities and partnerships as part of the Environmental, Social and Governance (ESG) strategy
  • Identify pilot projects, analyse their technical and economic feasibility, and evaluate financing possibilities
  • Evaluate hydrogen use cases, taking account of the changing tax treatment of carbon-emitting fuels
  • Optimise the business case through measures such as identifying suitable funding initiatives and the use of by-products
  • Assess legal and regulatory implications on a national and international level
  • Identify suitable R&D as well as project subsidies worldwide
  • Develop and implement hydrogen procurement and trade strategies
  • Understand national and international certification models for green hydrogen and its derivatives
  • Integrate hydrogen-related projects into reporting

Priorities for the public sector

  • Incentivise the buildout and expansion of renewable energy projects
  • Form a national view or strategy on hydrogen, standards and government-backed applications
  • Partner with other countries to progress the case for hydrogen in decarbonisation
  • Support public infrastructure projects that support decarbonisation, including the grid (transmission and distribution), stability and security of supply

For further information on the cost development of renewable green hydrogen, read our global insight article 'The green hydrogen economy'.

We are here to help you

PwC's Energy and Utilities team can support you in your sustainability efforts. Contact us today.

Contact us

Kim McClenaghan

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6912

Karen Keeley

Director, PwC Ireland (Republic of)

Tel: +353 1 792 8790

Rebecca Greene

Director, PwC Ireland (Republic of)

Tel: +353 1 792 5059

Connor Mace

Manager, PwC Ireland (Republic of)

Tel: +353 1 792 8486

Follow PwC Ireland