Korea Trade Insurance Corporation CEO Lee In-ho, second from left, and Etihad Credit Insurance CEO Massimo Falcioni, third from left, pose after signing their MOU on supporting the two countries’ green hydrogen businesses during a ceremony in Dubai, Jan. 16. Courtesy of ECI
Export insurance and finance will play a crucial role in safeguarding the world’s transition to a hydrogen economy and boosting the joint efforts between Korea and the United Arab Emirates (UAE) to take an early lead in the supply chain of the energy source, Etihad Credit Insurance (ECI) CEO Massimo Falcioni said.
“Since the green hydrogen projects are in the nascent stage, it is costlier than traditional production processes, and there might have more risks associated with its massive production,” Falcioni said during an email interview with The Korea Times.
“Hence, safeguarding those initiatives with adequate insurance solutions is essential as this form of renewable energy is poised to contribute substantially to the decarbonization process of the world.”
Falcioni did the interview during President Moon Jae-in’s trip to the UAE last week, during which Korea and the UAE signed a pack of MOUs to strengthen bilateral partnerships for the supply chain of the hydrogen economy.
Along with other companies directly involved in the supply chain, ECI and Korea’s official export credit agency, Korea Trade Insurance Corporation (K-SURE), signed an MOU to boost investments in sustainable green energy, with a focus on hydrogen production project developments.
“We will fully support the energy cooperation between the UAE and Korea into the hydrogen sector, a core energy resource in the age of carbon neutrality, by offering companies guarantees to reduce the cost of funding in medium- and long-term projects development into the production and distribution of both blue and green hydrogen,” Falcioni said.
Green hydrogen refers to hydrogen produced from 100 percent renewable energy sources. Blue hydrogen is produced by splitting hydrogen and carbon dioxide, but CO2 is captured and stored during the processing phase. Due to processes required to produce hydrogen, it is oftentimes called an “energy carrier,” enabling storage of renewable energies.
While Korea certainly possess technological expertise in transporting and using hydrogen as an energy source, such as hydrogen carrier vessels, fuel cells and hydrogen vehicles, the UAE and other Middle Eastern countries have potential in mass-producing hydrogen by exploiting geographic advantages and rich natural gas reserves for blue hydrogen.
“For ECI, this agreement comes as a natural progression of our various projects with regard to the UAE’s Energy Strategy 2050, which aims to allocate over 600 billion UAE dirhams ($163.35 billion) to meet its goal of increasing its contribution of clean energy sources in the total capacity mix to 50 percent ― 44 percent renewable and 6 percent nuclear ― by 2050,” Falcioni said.
“We believe it is a beginning of a new collaboration that will see more initiatives of this kind sooner than later, which not only bring about more economic prosperity into the nations but also help to create a healthier and happier world.”
Falcioni noted that the MOU between ECI and K-SURE and other hydrogen partnerships between Korea and the UAE will serve as a model case for other Middle Eastern countries to follow, and help Korea in the global competition to take a lead in the hydrogen market, given the Middle Eastern nations’ potential as hydrogen exporters.
“The association between the UAE and Korea on renewable energy to achieve net-zero emissions will certainly encourage other leading countries in the Middle East to follow suit,” the CEO said. “Although developed countries such as China and the U.S. are seeking to invest in green hydrogen, their export prospects are limited by great domestic demand that will probably consume most of their production. By contrast, the countries here can export much of their green hydrogen and still have ample, low-cost renewable energy.”
Source: The Korea Times