Somewhere between 2021 and 2022, the energy world changed. It had a new intrusion: hydrogen. But the concept of hydrogen as a fuel source is not new. Within the transportation sector, hydrogen was seen as a viable long-term solution. In the meantime, electric vehicles (EVs) would act as an intermediate solution until hydrogen technology matured.

Push forward, and EV has risen to become the dominant ‘alternative’ paradigm to internal combustion engines, with hydrogen fuel cells coming a distant third. Meanwhile, the 2022 fraud charges against US-based hydrogen trucking company Nikola’s founder Trevor Milton derailed the global ‘hydrogen discourse.’ Trevor’s misadventures did not help the hydrogen sector’s development. And yet, in the space of a year since 2022, a veritable hydrogen arms race has broken out globally.

Given the new-found enthusiasm for the hydrogen economy, there are opportunities for Bangladesh to position itself with the hydrogen ecosystem. If its use is carefully implemented, hydrogen can steer energy security, reduce energy imports, reduce foreign currency spending and help meet environmental goals.

Hydrogen’s turning point

Until 2021, hydrogen played a peripheral part in the global energy ecosystem. Hydrogen already has its specific industrial uses within the agriculture (an additive for fertilisers) and industrial (a petrochemical input) sectors. But its usage as an energy source, whether for transportation or for thermal generation, is peripheral. That is not to say there haven’t been pilot projects and substantial research and development.

Trucking startup Nikola promised hydrogen trucks. The province of British Columbia in Canada ran a refuelling corridor for hydrogen-powered public buses. Toyota invested in hydrogen vehicles through its limited Mirai sedan models. But these pilots were never suggestive that hydrogen would become a dominant fuel source.

And yet, in the summer of 2022, Canadian Prime Minister Justin Trudeau and German premier Olaf Scholz stunned the world with the announcement that Canada would start supplying the energy-intensive German economy with ‘green hydrogen.’[1] For Germany, green hydrogen is an absolutely critical lynchpin in its goal to decarbonise its carbon-intensive manufacturing industries.

For green hydrogen, the German steel industry, which is currently locked by coal, will be an essential target. Tightened emissions standards have made decarbonisation a policy priority. For this, hydrogen remains the only viable replacement for coal.

The Canada–Germany announcement became the first hydrogen venture that internationalised the hydrogen economy. It was a warning shot that those who ignored it could be net economic losers. The transformation was most dramatically reflected by the United Nations 26th and 27th Conference of the Party (COP26 and COP27) negotiations: in 2021 hydrogen advocates couldn’t get any interest in ‘green hydrogen.’ By 2022, the scene had seen an about turn, with nobody able to stop talking about it.

The Canada–Germany announcement became the first hydrogen venture that internationalised the hydrogen economy.

Within the transportation sector, hydrogen’s biggest devotee is Toyota, which continues to manufacture its hydrogen-powered Mirai sedan. Meanwhile, many major transportation companies have provided lip service to supporting hydrogen vehicles. Within the heavy transportation sector, both China and Europe are testing out hydrogen-powered trains.

In the name of infrastructure development projects, billions of dollars of investment have been announced, with a global arms race to see who can take the ‘first mover’ advantage within 2030s. Major announcements have come from the governments of Australia, Egypt, India, Japan, Saudi Arabia and South Africa. After decades of false starts, it seems that hydrogen’s time has finally arrived.

The challenges of hydrogen

Before we go too far down the hydrogen rabbit hole, it is useful to note the challenges with it. Hydrogen is the lightest element in the periodic table, which also makes it challenging to work with. Given its small molecular size, it can easily leak if not transported using specialised pipelines, containers, trucks and ships. Transporting hydrogen in liquified format requires it to be at least 100° Fahrenheit (~38°C) colder than usual liquefied natural gas (LNG).

Hydrogen is extremely flammable. It can ignite in portions as small as 4% of the air, which makes its leakiness a safety hazard. Pure hydrogen can embrittle traditional steel pipelines, further exacerbating safety concerns. Hence, in its pure form it cannot be transported via traditional steel gas pipelines.

The critics of hydrogen claim that its energy density is low. This means that you volumetrically need more of it to get an equivalent amount of energy compared with other energy sources. Furthermore, the low energy density means that you would have to create and transport more of it to get an equivalent amount of energy compared with something like natural gas.

Finally, the critics of hydrogen claim that green hydrogen has very high loss factors.[2] Despite all of these technical criticisms, though, hydrogen still represents a unique opportunity for developing countries to get energy-independent.

Bangladesh’s ‘green hydrogen’ chances

Green hydrogen represents an opportunity for Bangladesh to develop energy independence. It can also make the country an energy exporter. One point to remember is that Bangladesh already has some hydrogen experience through its fertiliser industry. Making ammonia, a key fertiliser component, requires hydrogen processing facilities. Ammonia is considered a stable carrier for hydrogen, so much so that Japan’s hydrogen strategy is actually based on developing an ammonia economy rather than a pure hydrogen economy.

Green hydrogen represents an opportunity for Bangladesh to develop energy independence.

Most hydrogen that is produced for ammonia is classified as ‘grey’ hydrogen. It is produced via a mechanism called steam methane reformation. Here, steam and methane (essentially natural gas) is treated under high pressure to produce hydrogen. It is considered ‘grey’ (or dirty) hydrogen because the output of the process is carbon dioxide. Hence, it is a net contributor to climate change. In short, Bangladesh’s fertiliser manufacturing experience gives it a base knowledge for handling hydrogen.

Bangladesh can lean towards producing green hydrogen. This would be produced via electrolysis, using energy derived from renewables like solar or wind. Under the new rules of the EU, hydrogen is also considered green if produced from nuclear power.

Bangladesh is in an advantageous position to develop a green hydrogen system and also to reap the benefits of dependencies on foreign markets. Specifically, hydrogen represents an opportunity to develop energy independence. Hydrogen will reduce the country’s foreign currency spending from energy imports.

Bangladesh’s ‘hydrogen’ benefits

For Bangladesh, the benefits of a hydrogen energy pathway are many.

Geography and climate: Green hydrogen is often touted as a climate change solution. The great irony of green hydrogen is it is dependent on access to water at a time when climate change is limiting access to water. Bangladesh is a major outlier because it has ready access to fresh water via its extensive river systems, along with seasonal monsoons. This ready access to fresh water can act as the lynchpin in developing regionalised hydrogen ecosystems.

Not all countries have such water access. There are geography and climatic dependencies for who can (or cannot) produce green hydrogen. In this space, countries along tropical and subtropical belts are primed from a water access standpoint.

Energy independence: Bangladesh, like most countries, is a net energy importer and relies on international markets. The primary energy source is natural gas (over 60%) followed by oil and coal. Nuclear power will also be a substantial part of the energy mix. However, the dependencies on foreign energy markets have increased the susceptibility of the energy sector to price shocks stemming from international events.

The zoomed-out look at the ‘energy timeframe’ is important for Bangladeshi policy-makers. Since the outbreak of the Ukraine–Russia crisis in 2022, natural gas and other fuel prices have tripled as Europe has scrambled to find alternative energy sources to Russia. An additional factor is that Bangladesh has only 10 years’ worth of gas reserves, till the mid-2030s, before the existing fields are tapped out. At that point, the entirety of the production output would have to be procured from international markets.

Developing a domestic hydrogen economy will reduce dependencies on international markets. Depending on the state of Bangladesh’s existing pipeline infrastructure, it might be able to offset natural gas demand by approximately 15–20%, by replacing it with gas-hydrogen blends. The US state of Hawaii, for example, has been running 15% gas-hydrogen blends within its gas distribution system since the early 2010s.

Depending on the state of Bangladesh’s existing pipeline infrastructure, it might be able to offset natural gas demand by approximately 15–20%, by replacing it with gas-hydrogen blends.

The EU has just approved gas-hydrogen blends in excess of 20% within its existing pipeline systems. Replacing up to 20% of gas needs with domestically produced hydrogen represents a massive reduction in reliance on foreign markets for Bangladesh.

Price stability and foreign currency savings: The infraction of price stability and foreign currency is a critical feature of the hydrogen economy that is relevant to developing countries. It is not really a part of the energy calculus in the developed world. Most energy in international markets is bought and sold in international currencies. For developing countries, building foreign currency reserves is an integral part of their fiscal management. The sky-rocketing energy prices from Ukraine’s fallout took a sledgehammer to that plan. It quickly depleted foreign currency reserves, as scarce energy sources on the international markets were being procured.

In Bangladesh alone, by the end of 2022, foreign currency reserves had dropped from USD 38 billion to some USD 32 billion in a span of six months. This was enough money to pay for four months’ worth of imports, meaning the depletion could have rung the alarm bell for the economy.

The hit on the foreign currency was substantial enough that the government made a strategic decision to curtail energy purchases rather than risk depleting its currency reserves. This meant that Bangladesh had to adopt a policy of imposing ‘managed blackouts’ across the country. It was a wise move, in that the pain around blackouts allowed the policy-makers to ride out the temporary price inflation and protect its currency reserves.

A domestic hydrogen economy reduces the need to purchase gas internationally. Furthermore, for Bangladesh, domestically produced hydrogen could be purchased in the local currency (takas) rather than in US dollars or euros. It should be noted that producing hydrogen is very expensive. That being said, domestic hydrogen allows for a strategic trade-off. Specifically, it allows countries to produce their own (expensive) energy without the exposure to international shocks. Additionally, it can be done in local currency, thereby protecting foreign currency reserves and creating price certainty for the government.

Over the longer term, it is anticipated that the cost of electrolysing green hydrogen will drop dramatically. Some estimates state that by 2030 hydrogen will cost a little over USD 1 per tonne. If this comes true, having a strong hydrogen economy could reduce the cost of power in Bangladesh.

Economic development: As Bangladesh continues down its economic development pathway, the role of energy as an ‘economy-catalyser’ is one that remains crucial. Supporting the hydrogen economy will require developing new infrastructure, while ensuring that existing assets and pipelines are ‘fit for purpose.’ This may mean creating new skills training for professionals to work in the sector, both locally and globally. Bangladesh can seize the opportunity because currently there is a severe shortage of qualified hydrogen technicians globally.

In addition, a maturing hydrogen sector can lead to energy export on a regional basis, whereby geography, water access or skilled labour create a comparative advantage for Bangladesh. Here, for example, the eastern regions of India can be a target market. Opportunities to become net energy exporters are relatively rare and highly contingent on localised conditions. As such, hydrogen and renewables (e.g. offshore wind farms) are two self-sustaining energy opportunities.

…a maturing hydrogen sector can lead to energy export on a regional basis, whereby geography, water access or skilled labour create a comparative advantage for Bangladesh.

Over the longer term, as carbon-intensive fuels are retired, countries with mature hydrogen sectors and localised generation advantages (e.g. water access and pipelines) will play the role of a ‘hydrogen OPEC.’ Between the infrastructure spend, new skilling and export potential, hydrogen is a once-in-a-generation opportunity for Bangladesh to meet its economic development goals and credibly place itself within the global energy framework.


It will take a decade for the hydrogen economy to mature. Those with the ‘first mover’ advantage will have a competitive edge against newer entrants. A base of depreciated assets, efficiencies of scale and an experienced workforce will determine the beneficiaries of the sector.

To place Bangladesh within the competitive energy landscape, its policy-makers should take up some ‘no-regrets’ activities to lay the ground for a hydrogen economy. These include assessing the state of existing gas infrastructure for hydrogen blends, determining baseline codes and standards for future gaseous fuels and creating a stable regulatory framework for hydrogen development.

Over the midterm, Bangladesh can set smart targets. Strategies for hydrogen use in residential gas systems and bulk thermal generation units, as well as in the transportation sector, can be good starts. Hand in hand with this, Bangladesh can set minimum production goals and create a competitive ecosystem for trading hydrogen. A critical component could be the creation of a technical training programme for a steady stream of technicians who can work both locally and globally.

For Bangladesh, hydrogen represents an exciting, once-in-a-generation opportunity to take control of its energy destiny. It should not be squandered.


[1] Green hydrogen is essentially the hydrogen generated from renewable energy.

[2] High loss factors mean that, after factoring in the energy required to produce and transport hydrogen, the amount of energy that is actually extracted relative to the original input is very marginal.


Cover: A hydrogen tank on a Honda FCX platform at Honda Collection Hall, Tochigi, Japan, 23 May 2010 | Photo by Morio.

Photo ©️ Mahmud Hossain Opu

Nameer Rahman is Director of Policy at the Ontario Energy Association. He is an energy policy analyst. He was a senior advisor at the Strategic Policy Unit of the Ministry of Energy, Canada. He is a member of the Standards Council of Canada's Hydrogen Codes and Standards Working Group. He pursued his graduate studies at the University of Windsor, Canada.