Europe Pushes for Clean Hydrogen to Achieve Climate Neutral. So, Will It Work?

24 Jan 2022

As the European Union begins work on climate targets aimed at encouraging companies and consumers to choose greener alternatives, the union and the energy industry are hedging their bets on hydrogen.

But could clean hydrogen be the answer to achieving climate neutrality?

Clean hydrogen, or green hydrogen, is made without fossil fuels and uses electricity from renewable energy technologies. But at the same time, the cost of producing gas is also an obstacle.

Currently, the most used way to produce the gas is through so-called 'grey hydrogen', but it is one of the most polluting methods. It operates using natural gas through steam methane reforming but does not capture emissions.

Clean hydrogen will be essential to help decarbonize sectors such as industry, heavy-duty transportation and seasonal storage, according to a report by Hydrogen4EU, a research partnership of international organizations and energy giants.

But the report makes clear that this is not the silver bullet to solving the entire climate problem. Rather, it is the missing link in sectors that cannot easily be decarbonized through electrification.

Oil and gas companies and governments also see clean hydrogen as the gas of the future, which could help Europe meet its goal of achieving net zero carbon emissions by 2050.

Europe's hydrogen plan

The European Commission unveiled its Fit for 55 climate package on July 14, which includes some of the bloc's most ambitious proposals to reduce carbon emissions and move the 27 EU countries away from fossil fuels.

I think we also recognize that the amount of infrastructure you need for this green hydrogen is really huge.

To achieve this, some of the draft proposals give significant support to the development of the European hydrogen industry.

A plan is being detailed for a 50 percent target share in hydrogen consumption in the industrial sector. It has also set an ambitious target of 10 million tonnes of renewable hydrogen produced in the EU by 2030, with hydrogen refueling stations becoming more widely available.

What will it cost to apply cleaner hydrogen?

The challenge for clean hydrogen is to reduce the cost to compete with fossil fuels.

“I think you can't make money on hydrogen projects, which is really important at the moment, because clean technologies are more expensive than dirty technologies,” Johannes Trüby, Director of Energy and Modeling at Deloitte Economic Consultancy, told Euronews Next.

“As soon as the regulations are ready for companies to deal with, hydrogen projects will come and then you will bring the costs down.”

Profits will come later, he said, but for now it is impossible to determine the value of the clean hydrogen industry.

"Green hydrogen absolutely plays a very important role in the transition to net zero," Trüby said.

Blue hydrogen

Even if it were more cost-effective to produce green hydrogen, the Hydrogen4EU report says this would not be enough to meet all future demand for clean hydrogen.

He notes that 1,000-1,700 GW of dedicated solar photovoltaics, a similar amount of wind energy and 680 to 1,500 GW of electrolyzers will be needed to meet Europe's hydrogen demand by 2050.

This will need to increase tenfold, as the EU has already installed 120 GW of photovoltaic and 170 GW of wind power in total.

It is estimated that the development of hydrogen structures could cost Europe around 1.3-1.5 trillion euros; This will include installations for hydrogen production, transportation, storage and pipelines.

Another way to increase clean hydrogen is to increase the production of blue hydrogen from natural gas followed by carbon capture and storage (CCS).

It is considered low carbon because it buries the relevant CO2 emissions underground. However, environmental groups and some EU members are hesitant because it is not as clean as green hydrogen.

The Commission and industry experts agree that blue hydrogen will be needed to grow the market.

The Hydrogen4EU report recommends that all options should be considered when it comes to hydrogen production and argues that a technologically diverse model would reduce the cost of creating a low-carbon hydrogen value chain by €2 trillion by 2050.

Noé van Hulst, Hydrogen Advisor at the International Energy Agency (IEA), states that Europe wants to become a world leader in the clean hydrogen market and is in a strong position to do so.

"We will need a policy where you will repurpose gas pipelines," Van Hulst told Euronews Next.

"Then you can transport clean hydrogen from supply sources to demand centers further away, but fortunately we can do this by redesigning gas pipelines."

He said that Europe has accepted this possibility and that European gas infrastructure companies have designed the hydrogen backbone plan, so that it can be done gradually over the next decade and 5-10 years.

"By 2040, hydrogen can basically be transported across Europe, from east to west, north to south and vice versa. That's what you need to build a truly integrated European clean hydrogen market, including storage."

Van Hulst predicts that clean hydrogen will likely be traded worldwide in the long term. But to do this, there is a need for clarity on which product is traded and what its carbon footprint is.

"There needs to be a reputable, robust and reliable certification market built on this foundation. Then clean hydrogen can become a new global commodity market."

The International Hydrogen and Fuel Cells Partnership is working on a methodology for how to calculate how much carbon is produced for different ways to produce hydrogen.

What is the future of hydrogen?

For now, the EU's plan to produce 10 million tonnes of renewable hydrogen by 2030 seems far off.

Trüby's Deloitte team monitors different hydrogen projects announced across Europe and calculates how much hydrogen they could produce when implemented.

In the last two and a half years, only a third of the EU's 10 million tonnes target was produced in 2020.

"The supply gap is still quite large. So, 2030 is still nine years away and you can see more projects coming," Trüby said.

"But if you leave this expectation from the Commission and compare it with the field, you will see that there is still a fairly significant supply gap."

However, since electric vehicles struggle to transport long distances and heavy loads, the use of clean hydrogen for heavy transport, especially trucks, is abundant. It can also be used on airplanes and ships.

Hydrogen is also useful for heavy industries such as steelmaking, cement and chemicals.

"This is an issue that concerns most stakeholders in the energy industry, and I think that's why we can expect it to be huge," Trüby said.

"How important it will be then is a different matter. But everyone is talking about hydrogen for exactly these reasons, because it affects everyone."

Source: Euronews Next

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