A high-ranking half-day event with the German Embassy in Baku shed light on the potential green hydrogen offers for decarbonization and diversification in Azerbajian and how it can take Azerbaijan’s position as an energy exporter into the future.
The H2-diplo Decarbonization Dialogue took place on 25 June 2024 in Baku, Azerbajian with the title “Investing in Green Growth: Green Hydrogen’s Role in Azerbaijan’s Decarbonization“. On invitation of the German Embassy in Baku, key players from public, private and scientific institutions came together to discuss the potential and the necessary steps to facilitate a hydrogen market ramp-up in Azerbaijan. The event was supposed to show case the country which is in the center of attention of global climate and energy experts as the host of this year’s UN Climate Change Conference (COP) in Baku.
Sandra Schenke, Country Director for GIZ in South Caucasus, opened the event and welcomed the audience. In his subsequent opening speech, Mr. Heiko Schwarz, Deputy Head of Mission Embassy of the Federal Republic of Germany to Azerbaijan, emphasized that the timing of the event was chosen exactly right, as green hydrogen and the energy transition are moving more and more into the focus prior to COP29 in November. His speech was followed by the opening remarks of Mr. Elnur Soltanov, Deputy Energy Minister of Azerbaijan and CEO of the COP29 Presidency Team. He explained that the energy transition was already happening in Azerbaijan, but COP sped up the process and hydrogen and molecules in general are crucial to this transition, because electricity cannot solve all challenges. For the COP in Baku, he identified climate finance and Article 6 (referring to carbon markets) as two major topics.
The opening speeches were followed by two very interesting and panel discussions with high-ranking panelists. The first discussion round saw Mr. Soltanov debating the role of green hydrogen for the energy trade relationship between Azerbaijan and Europe with Peter Michalko (Ambassador of the European Union to the Republic of Azerbaijan), Teymur Guliyev (Deputy Vice-President, SOCAR), Hans-Joachim Polk (Member of the Executive Board, Infrastructure & Technical Affairs, VNG AG), Michael Hilmer (Vice President Supply and Origination South, Uniper SE) and Gulmira Rzayeva (Senior Research Fellow, Oxford Institute for Energy Studies). It showed that the relevance of Azerbaijan as an energy supplier has increased after the start of the Russian war of aggression against Ukraine, for which especially the Southern Gas Corridor played an important role. Hydrogen offers the opportunity to take this relationship into a decarbonized future. Major renewable energy projects are already implemented, and Azerbaijan is engaged in a fruitful exchange with a few countries in regional proximity about developing energy infrastructure. There is also already exchange with German companies on imports, but also knowledge transfer.
The second panel focused on the framework for the hydrogen market ramp-up and decarbonization efforts in general in Azerbaijan. This session brought together Rana Humbatova, (Head of Hydrogen and Green Technologies Department, AREA), Yashar Musayev (Senior Energy Expert), Florian Kitt (Senior Energy Specialist, World Bank) and Eugene Seah (Chief Operating Officer, Port of Baku). They assessed that currently, the Azerbaijani economy is highly dependent on fossil fuels and that the revenues from that will decrease with increasing global decarbonization efforts. Domestic decarbonization efforts must be regarded as an integrated and holistic approach as entities such as the Port of Baku depend on developments in the upstream chain but also in the field of technology to reach their decarbonization targets. Also, the regional integration of the energy sector must be improved. In general, the demand for hydrogen has to become clearer and needs more support, so production can develop, and financing of projects becomes easier.
