Green hydrogen has quickly risen to the top of global energy conversations, writes Zula Luvsandorj. For countries heavily reliant on coal, however, turning hydrogen from concept to reality is far more complex than installing electrolysers or drafting ambitious roadmaps. It is about reshaping economies, redefining livelihoods, and rebalancing political narratives that have been built on fossil fuels for generations.
Having worked on both the policy and finance sides of the energy transition, from advising the UK Government on hydrogen strategies to supporting Mongolia’s Deputy Prime Minister on sustainable investment, I have seen first-hand the challenges and opportunities of moving from coal dependency to clean energy leadership. Launching a credible hydrogen strategy in such an economy requires three critical ingredients: political agility, financial innovation, and cultural sensitivity.
Politics: turning resistance into resilience
Coal is not just an energy source, it is political power. In many nations, coal is tied to state-owned enterprises, unionised labour, and entire regional identities. Announcing a hydrogen transition without addressing these realities risks fuelling distrust and social unrest. To succeed, political leaders must position hydrogen as a national opportunity rather than an external imposition. This means communicating that hydrogen is not about shutting down industries, but about building the foundations of a more competitive economy. It requires inclusive dialogue with coal communities, ensuring that miners and plant operators see a role for themselves in the future, whether through reskilling, redeployment, or community reinvestment. In Mongolia, for example, coal is deeply tied to both exports and employment. Yet hydrogen offers the possibility of transforming the country into a clean energy hub for Northeast Asia. The political challenge is not only to adopt the technology, but to frame it as a pathway to prosperity and international relevance.
Economics: financing the leap
Hydrogen infrastructure is capital-intensive. Electrolysers, renewables, storage, and transport networks demand billions in upfront investment. For coal-reliant economies, which often face fiscal constraints, the economics can feel prohibitive. This is where innovative financing comes into play. Blended finance, combining multilateral development banks, sovereign funds, green bonds, and private capital, can de-risk projects and attract international investment. Clear policy frameworks and predictable regulation are just as important as subsidies or tax incentives. Investors will only commit if the rules of the game are stable.
Recent developments in Mongolia showcase this shift. ACWA Power’s entrance into the Mongolian market and the signing of a USD 1 billion Memorandum of Understanding with the European Investment Bank mark a significant step towards mobilising large-scale clean energy finance. The partnership aims to support green hydrogen development and catalyse private sector participation in the country’s transition. Such collaborations demonstrate how strategic international alliances can unlock the capital and confidence needed to scale emerging hydrogen markets.
Equally, the transition should be phased. Coal-reliant countries cannot and should not attempt an overnight shift. Pilot projects, particularly in industrial clusters or cross-border export corridors, are critical. They prove bankability, build technical expertise, and generate investor confidence.
Culture: winning hearts as well as minds
The hardest part of transition is often the least discussed: culture. In coal economies, livelihoods and identities have been tied to the industry for decades. Mines, plants, and supply chains are not just workplaces; they are the backbone of communities. For hydrogen to take root, governments and businesses must invest in public understanding. Education campaigns can help counter myths and showcase hydrogen’s benefits for health, environment, and employment. Retraining programmes need to offer tangible opportunities, not abstract promises. Most importantly, policymakers must demonstrate that communities will be carried into the clean future, not left behind.
A just and ambitious transition
Hydrogen is more than a technology, it is a test for whether nations can deliver a just and ambitious energy transition. For coal-dependent economies, the path forward is steep, but it is also an extraordinary opportunity to leapfrog into global clean energy leadership. Success will not come from technical blueprints alone. It will depend on political courage, innovative financing, and cultural empathy. Those who get it right will not only decarbonise their economies but also position themselves as exporters of the fuels, technologies, and ideas that will shape the next generation of global growth. The future of hydrogen in coal economies is not just about replacing one fuel with another, it is about redefining what national prosperity looks like in a low-carbon world.
Zula Luvsandorj is an energy strategist and global infrastructure finance expert with more than 15 years of international experience and over $20 billion in closed deals. She currently advises the Deputy Prime Minister of Mongolia on energy transition and sustainable investment strategy. An Oxford Saïd Executive MBA graduate and former Project Finance Advisor to the UK Government’s Cabinet Office, Zula has led major energy and hydrogen initiatives across EMEA. She is also Co-founder of Sunsteppe, a clean energy investment firm in Mongolia.
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