2Challenges inhibiting clean energy infrastructure development Deploying clean energy infrastructure requires navigating various interconnected challenges, including tackling the green premium and facilitating robust demand signals. Scaling clean energy infrastructure is vital for the energy transition, but it requires robust business cases to attract investment. Despite growing global interest, progress in clean fuel infrastructure development remains limited, as highlighted by the Mission Possible Partnership’s (MPP) Global Project Tracker22 and the IEA’s Global Hydrogen Review 2024.23 The green premium creates a challenging hurdle for scaling up investments When accounting for the infrastructure investments required, clean fuels often come at a higher price than their fossil fuel counterparts. The green premium for clean fuels varies based on several factors, such as the fuel itself, the method of production, storage and transport versus the conventional alternative. The IEA estimates that the production cost of green hydrogen is currently 1.5 to 6 times more than that of producing hydrogen from fossil fuels with unabated GHG emissions.24 Green ammonia production costs were nearly three times the average cost of production via fossil fuels in 2023. These production costs are only expected to decrease by 30-50% by 2030 in the IEA’s Net Zero Emissions by 2050 scenario.25 Lack of strong demand signals inhibits deployment of clean energy infrastructure Global demand for clean energy is increasing.26 However, this demand is fragmented, with little alignment between the industries and logistics across the clean energy value chain. Without stronger collaboration, achieving the necessary scale to meet climate goals will be unlikely. Uncertainty around demand is not only evident in the current number of clean fuel offtake agreements but is also reflected in disparate demand forecasts for various fuels over the next 25 years.27,28,29,30 Consequently, investing in clean energy infrastructure involves substantial risk, which can impact the business case, exerting pressure on expected returns and challenging the viability of the investment. Limited availability of clean power supply in the near future restricts clean fuel supply growth An additional challenge is access to clean power. This is because many clean fuel pathways rely on significant quantities of renewable power. According to the International Renewable Energy Agency’s (IRENA) 1.5°C Scenario, total global renewable power generation capacity will need to triple while energy efficiency improvements double by 2030.31 This challenge relates to both the availability and delivery (grid infrastructure) of clean power.32 Additionally, the current pace of clean energy infrastructure capital project delivery for electricity and gas,33 for example, is too slow to meet the timelines needed for the industrial energy transition and global climate goals. For instance, the planning and permitting of infrastructure have long lead times relative to the total development time for these projects.34 Fragmentation of standards, certifications and policies for clean fuels persist The rise of international clean fuel trade and its mass application also depends on the establishment of global standards and certifications. Different regions are developing varying standards and certification schemes, complicating a unified approach. Definitions of clean molecules across jurisdictions are still evolving, inhibiting international trade. For example, the EU has developed relatively strict standards for the definition of green hydrogen. To add to the complexity, there are 34 certification schemes for hydrogen and its derivatives (e.g. ammonia) globally, which vary on factors such as GHG intensity and the scope of emissions that should be included.35 The green premium for clean fuels varies based on several factors, such as the fuel itself, the method of production, storage and transport versus the conventional alternative. Unleashing the Full Potential of Industrial Clusters: Infrastructure Solutions for Clean Energies 8

Unleashing the Potential of Industrial Clusters 2025