Russia will prioritize domestic hydrogen use over exports, according to deputy energy minister Pavel Sorokin, but some projects are still targeting overseas sales.

Russia's strategic focus has shifted towards supplying hydrogen to remote regions and bolstering the transport sector, according to Sorokin's statements as reported by the state news agency Tass. Although Russia's market size may not match that of larger countries like China, it still offers ample opportunities for testing and scaling up various hydrogen technologies.

Previously, Moscow had explored the potential of producing low-carbon hydrogen, created through processes like natural gas with carbon capture and storage, primarily for export markets in Europe, Japan, and South Korea. However, these markets are no longer a top priority in the current landscape, as Russia has faced boycotts from potential customers, particularly in Europe and Northeast Asia, following its involvement in Ukraine. While China remains a potential major purchaser, it is emphasizing the widespread production and utilization of renewable hydrogen, including the domestic production of blue hydrogen from natural gas, including imports from Russia under existing agreements.

Sorokin emphasized that exports are still a viable option and are likely to materialize in the future, as reported by Tass. He also expressed some skepticism about overly optimistic global hydrogen usage projections. These projections often assume the widespread adoption of renewable hydrogen, contingent on substantial expansion in renewable power generation and significant cost reductions. Sorokin referred to this as "wishful thinking," possibly alluding to rising global inflation and recent interest rate hikes.

Nonetheless, Sorokin did suggest that hydrogen could potentially constitute around 10% of the global energy mix by 2040-50, which is a notable share. In contrast, the International Renewable Energy Agency (Irena) estimated in its 2023 World Energy Transitions Outlook that hydrogen could account for 14% of final energy consumption by 2050, provided global warming is kept to a limit of 1.5°C. DNV, a Norwegian classification society and consultancy, forecasted hydrogen's share in the global energy mix for 2050 at just 5% in a previous assessment.

State-owned entities are actively advancing plans to construct low-carbon hydrogen facilities on Sakhalin Island. Subsidiaries of state-controlled nuclear corporation Rosatom and state-controlled gas company Gazprom have inked agreements with partners to develop a facility capable of producing 36,500 tons per year via steam methane reforming coupled with carbon capture and storage. Their target markets encompass both domestic consumption and exports to the Asia-Pacific region, with domestic hydrogen firm H2 Clean Energy overseeing long-term sales in export markets.

Rosatom separately disclosed its partnership with LS Group, a Chinese equipment manufacturer serving the oil, gas, and chemicals industries, to collaborate on a hydrogen project located on Sakhalin. It's worth noting that Rosatom had previously planned to establish a 100,000-ton-per-year low-carbon hydrogen facility on Sakhalin in partnership with French industrial gas firm Air Liquide, but all of Air Liquide's activities in Russia ceased following the commencement of the Ukraine conflict.