Hydrogen Outlook in Central and Eastern Europe

HYDROGEN OUTLOOK IN CENTRAL AND EASTERN EUROPE

EVENT REPORT | FEBRUARY 2021 https://eurac.tv/9SdC

With the support of HYDROGEN OUTLOOK IN CENTRAL AND EASTERN EUROPE

EVENT REPORT https://eurac.tv/9SdC

According to EU scenarios, the share of hydrogen in Europe’s energy mix is expected to grow from less than 2% today to 13-14% by 2050, as part of efforts to de- carbonise transport and heavy industries. Central and Eastern EU countries are now stepping up prepara- tions to be part of the game. Contents

Polish climate minister: ‘It is critical that EU legislation on hydrogen is colour-blind’ 4 Hydrogen – the case for Central and Eastern Europe 7 ‘Low hanging fruit’: Eastern EU states eye existing gas network for hydrogen 9 4 EVENT REPORT | HYDROGEN OUTLOOK IN CENTRAL AND EASTERN EUROPE | EURACTIV

INTERVIEW Polish climate minister: ‘It is critical that EU legislation on hydrogen is colour-blind’

By Frédéric Simon | EURACTIV.com

Michal Kurtyka during a press conference summing up the COP24 Climate Summit in Katowice, 16 December 2018. [EPA-EFE/ANDRZEJ GRYGIEL]

oland has welcomed the and Environment of Poland, which The Polish government adopted its inclusion of hydrogen currently holds the Presidency of the 2040 energy policy on 2 February. Pinfrastructure in the European Visegrad 4 group of countries comprising What is the place of hydrogen in the Commission’s recast regulation for the Czech Republic, Hungary, Poland country’s energy policy? Does Poland cross-border energy networks. “It and Slovakia. He answered EURACTIV’s have objectives in terms of scaling up is critical for our region that this questions in writing ahead of a virtual production capacity and infrastructure legislation is colour-blind and does not conference on the outlook for hydrogen in deployment? And what are the related discriminate between different ‘types’ Central and Eastern Europe taking place cost projections for this? of hydrogen,” says Michał Kurtyka. on Friday (12 February). The recent adoption of the Polish Michał Kurtyka is Minister of Climate 2040 energy policy is a milestone

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Continued from Page 4 towards future climate neutrality. by the first applications of innovative regional specificities when designing It sets a clear vision of our strategy production installations. the support instruments for energy for a low- and zero-emission energy transition. transition, which ensures energy Our ambition is to have 2GW of security and creates the basis for electrolyser capacity installed by Moreover, in the mid- and long- meeting economic needs resulting 2030, which will require investments term perspective, a stable increase from the recovery from the COVID-19 of over €2 billion. in share of the green gases (such as crisis. hydrogen and biomethane) in gas What are the main challenges networks, is expected. In this regard, The new energy policy recognises and opportunities related to the retrofitting of existing infrastructure the importance of innovation and development of hydrogen in central to enable blending of renewable paves the way for the application of and east European countries? How do and decarbonised gases, such as hydrogen as an alternative fuel, energy those differ from the rest of the EU? hydrogen, in the natural gas network carrier and energy storage device. should be considered as the most The role of hydrogen will increase CEE countries have made a big reliable option for greening the gas together with the implementation effort to overcome the historical networks and economies. of offshore wind and nuclear energy dependencies, but our energy mix into the Polish power system. still relies on coal. We plan to diversify Putting differences aside, we have our energy mix through nuclear plant something in common across the The adoption of our energy policy and offshore wind farms. It will give EU. Poland has a sizeable hydrogen gives a strong impetus for other us energy security. production – we are the 3rd producer energy and climate-related strategies. in the EU – but just like everywhere A draft Polish 2030 hydrogen Phasing out coal is a very costly else it is largely based on fossil fuels. strategy is currently under public process which has to be done with a We share the challenge of making consultation. Our proposal covers all due account of what our public and our hydrogen more sustainable. aspects of the hydrogen value chain, energy system can sustain. Not every including production, transmission, EU country has an excess of renewable The development of a European- storage and use. It presents hydrogen electricity in the system. Thus, the wide hydrogen market will rely first coexisting with other energy carriers key issue in hydrogen production on market integration at a regional to cover growing power demand and should be the level of CO2 emissions, level. What can be the contribution respond to the need of a secured and not the specific technology. In order of central and eastern European balanced energy system. to achieve emission reductions in a countries to this effort? cost effective manner and to prevent The expansion of the hydrogen creating permanent disproportions CEE countries can actively economy will support the increase in between the regions and member promote new opportunities for the share of renewable energy sources, states at the beginning hydrogen cooperation on low-carbon hydrogen give a new role to the gas sector in should be produced from all possible with neighbouring countries and terms of storage, transmission and low-emission sources. regions. Such cooperation can distribution of mixtures of natural contribute to their energy transition, gas and hydrogen and will be a way The CEE region needs in terms of sustainable growth and development. for climate neutrality of transport and gas infrastructure are significantly industry. different from those of member By 2030 the EU will aim at building states from North Western Europe. an open and competitive EU hydrogen The ambition of the Government In the case of Poland, we have market, with unhindered cross- of Poland is to develop strong identified gaps in gas transmission border trade and efficient allocation national and local competences in the and distribution infrastructure which of hydrogen supply among sectors. production of key components of the need to be filled in order to enable hydrogen technology value chain. In further transition towards low- Currently there is limited the short term, we aim at supporting carbon energy system. The EU policy infrastructure in place dedicated research and development followed needs to take into account these to transport and trade of hydrogen

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across borders. Development of excluding any other sectors at this adjustment of support schemes infrastructure is an important element stage. for investment, research and of the CEE cooperation. development activities. It is necessary We need more time to assess the to seize the opportunities for the We welcomed the inclusion economic and environmental aspects R&D&I in hydrogen created by the EU of hydrogen infrastructure in the of hydrogen deployment across Green Deal and policies that follow. Commission’s proposal on the TEN-E sectors. The market uptake will be regulation recast. It is critical for our a good indicator of what should be The European Commission’s hydrogen region that this legislation is colour- prioritised. strategy, published in July last year, blind and does not discriminate aims for 100% renewable hydrogen between different “types” of hydrogen. Today, most hydrogen production production from electrolysis. What While physical properties of hydrogen is fossil-based and the quantities will be Poland’s contribution to this are irrespective of its production available are small. How does Poland objective? mode, the infrastructure must be in intend to bridge the gap between fossil, place to support the development of low-carbon and renewable hydrogen? There is an important scientific the market. Will supply come mainly from locally- and research potential in the field sourced hydrogen or from imports? of hydrogen technologies in Poland. What are the industrial sectors that We have significant achievements in are expected to be the main users If hydrogen is to be an alternative designing functional materials for the of hydrogen in Poland and CEE for crude oil and coal, at the beginning production of fuel cells and hydrogen countries? Is it industry, heating, or it should be produced from all possible storage. We also have specialists in transport? By contrast, are there any sources, the overall CO2 emission of all aspects related to the construction sectors that Poland believes should not which is significantly lower than that of fuel cells. We intend to use these be prioritised? of oil’s and coal’s. talents to take the lead in this relatively new market which is being created in Currently we are working in the When we reach the point where Europe. Ministry of Climate and Environment low-carbon hydrogen meets a much on the Polish Hydrogen Strategy larger demand, more and more low- We are also planning to create a which is going to define our goals and carbon hydrogen from renewable comprehensive research program, measures necessary to introduce the sources can be included. Our ambition the ultimate goal of which will be the hydrogen economy. is to develop strong national and local development of the technology and competences in the production of key construction of electrolysers and fuel We want hydrogen to support components of hydrogen technology cells. This will allow a direct economic energy transition in three priority value chain. effect. areas: energy and heating, transport and industry. We are also The use of hydrogen will help Above all, however, the key to addressing hydrogen production and us achieving not only climate success in developing the hydrogen distribution, and the need to create a neutrality but also maintaining the economy is working together stable regulatory framework for the competitiveness of Polish economy. as governments, industries and future market. Developing local competencies will partnerships to improve the prepare us to become technologically technology, push the costs down The priority areas refer to the self-sufficient when there is enough and create a policy and regulatory concept of sector coupling, which will renewable power to scale-up environment that will encourage help securing the future renewables- electrolysis. innovation and attract investments. based system. While we identified transport as a “quick win” sector and The hydrogen market will be are already introducing legislation subject to development, supported and support schemes, we are not by successive regulatory work and EVENT REPORT | HYDROGEN OUTLOOK IN CENTRAL AND EASTERN EUROPE | EURACTIV 7

STAKEHOLDER OPINION

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network. Hydrogen – the case for Central and Eastern Europe

By Bartek Czyczerski | Business & Science Poland

Bartek Czyczerski, Managing Director of Business & Science Poland

est businesses thrive when on providing businesses and societies its low- and zero-emission production faced with challenges and with a clear and walkable path to get methods coupled with the ability to Bthe EU Green Deal offers an there. transform it into other carriers or abundance of them in the foreseeable types of energy – including electricity future. However, the potential to turn Bartek Czyczerski is the Managing or heat. Thus, hydrogen can play a challenge into an opportunity will Director of Business & Science Poland. an important role in the process rely on joint and coordinated efforts of achieving climate neutrality. Its of public and private actors. It is our Hydrogen has the potential to application may range from heavy shared objective to make a successful become the fuel of the XXI century. transport – where electrification is transition to a decarbonised economy Hydrogen is the simplest, lightest, very difficult – through the industrial and to the responsible future. We all and most abundant element in the use to the energy storage. agree that the question is not if but universe with many applicable uses. how to do it and success will depend Its main advantage is the possibility of And here comes the rub: it is crucial

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to realise that today only less than 0,1% Therefore, apart from the We reason from a particular of global production of H2 originates financing, it is essential to address perspective of the Central and Eastern from a zero-carbon process. Therefore, other tasks: the development of Europe region which has made a between the current situation and the the hydrogen market based on the successful transition to a market and vision of a 100% renewable hydrogen various low-emission technologies, a greener economy. Since 1990, the EU economy, there is a long and costly way at least until the renewable hydrogen has managed to reduce its total CO2 to go. market matures; the instruments emissions by 23%, largely thanks to stimulating the demand; finding the reductions in the Central European To give you one example: to put the way to cover the cost difference countries. Yet, despite these efforts, on the road 500 buses fueled with between the traditional and zero- the current regional energy mix is a green hydrogen accompanied by the carbon technologies; and finding a result of the past and overcoming this electrolysers of 50 MW of the necessary way to incentivize and support the heritage will take extra time and effort. production capacity and 30 refuelling innovation. It will also affect the way and pace of stations requires the investments of developing the hydrogen economy. ca. 450 mn EUR over a few years span. There are several ways to Poland today is the nr 3 producer of This amount does not cover the cost of boost the development of the hydrogen in the EU. Similarly, to the electricity necessary to produce green hydrogen economy. The list is open, rest of the EU, it is still predominantly hydrogen to fuel them. The current and some initial ideas include: based on fossil fuels. However, we are estimates suggest that the yearly cost familiar with this business and can difference between a traditional and • increasing the share for contribute to make the hydrogen the hydrogen fuel required to run those renewable energy from backbone of the sustainable energy buses will amount to ca. 19-23 mn EUR hydrogen for renewable transition of the XXI century. It may be in favour of a traditional one. energy sources (RES) a small step for some, but it will be a under the RED II Directive; giant leap for the CEE region towards We subscribe to the long-term the climate-neutral economy. priority to develop the renewable • financial support for innovative hydrogen market but for the moment projects aimed at obtaining the production of such hydrogen clean hydrogen in existing is neither sufficient in terms of installations – e.g., a hydrogen quantities nor cost-effective. We must purification to the quality that not forget that at the end of the value can be used in automotive chain there is an EU consumer who fuel cells – or in small-scale, will be confronted with the higher local power plants where costs of new technologies and without there is a need to compensate a customer willing to foot the bill there for higher production costs is no market. of zero-carbon hydrogen;

Clearly, the investments needs are • further, decreasing distribution significant and there is an urgency for fees for renewable energy the support in this regard. However, for hydrogen production; any business decision must consider not only the investment cost but also • last, but not least – the support long-term profitability which depends mechanisms for products on the sufficient demand. manufactured with the use of “renewable hydrogen”. EVENT REPORT | HYDROGEN OUTLOOK IN CENTRAL AND EASTERN EUROPE | EURACTIV 9 ‘Low hanging fruit’: Eastern EU states eye existing gas network for hydrogen

By Kira Taylor | EURACTIV.com

Michal Kurtyka at COP24 summit in Poland in December 2018 [WALDEMAR DESKA / EPA-EFE]

xisting gas networks should reliant Central and Eastern European capacity to be green by 2030. be repurposed to transport countries to shift their industry away Ehydrogen and help boost from fossil fuel. Analysis from the Poland has also launched a demand, said Michał Kurtyka, Polish European Commission shows that hydrogen strategy while Bulgaria has Minister of Climate and Environment every €1 billion of investment into announced it will develop a national at an online event about hydrogen in renewable hydrogen leads to around roadmap for hydrogen. Slovakia has Central and Eastern Europe on Friday 10,000 jobs along the supply chain, established a centre for hydrogen (12 February). said Kadri Simson, the EU’s energy technologies and Croatia is preparing commissioner who spoke at the a national programme for hydrogen “We need to adapt the networks. conference. market development. We need to make sure that the already existing gas infrastructure will be Poland is already the third largest “Already, we are seeing hydrogen adapted to also transport decarbonised producer of hydrogen in Europe and buses in Riga, and there are promising gases, including hydrogen,” he said. the fifth largest in the world. It has projects on the horizon for hydrogen just adopted its energy plan for 2040 applications in the maritime sector Hydrogen provides a way for coal- and wants one third of its electricity and even in aviation. So it’s clear the

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opportunities are there for Central FUTURE OF HYDROGEN IN 300 million has been made available and Eastern Europe,” Simson said. CENTRAL AND EASTERN for zero emission transport, with the EUROPE country aiming to have 500 hydrogen But the Commission needs to buses on the road by 2025. This would do their homework on regulatory According to Sedláček, there is no help cut down air pollution in one of aspects, said Milan Sedláček, head of doubt about the role that hydrogen Europe’s most polluted countries. EU affairs and strategy at Eustream, will play in decarbonising the EU the gas transmission system operator and the existing gas infrastructure Poland also aims to open its first in Slovakia. will play an important part in this. 50 MW cogeneration plant by 2030. However, he warned there is little This is a combination of natural gas “Please do not be too rigid from the money available for repurposing the and hydrogen, which lowers the very beginning. These blending and grid. amount of carbon emissions and is low carbon gases are a low hanging seen as a step away from coal and fruit and it has to be for the benefit of Gas pipelines already exist across towards greener energy. everybody,” he added. the EU, including Soviet-era networks in many Central and Eastern The Commission is hoping to boost Although it is important to European countries. In Slovakia, hydrogen production in Europe, with develop production for decarbonised there is currently a project looking at the hydrogen strategy introduced in hydrogen, the most important whether these could be repurposed to July last year and proposed revisions thing is to increase the volume carry hydrogen. to transnational networks put forward and drive down costs, said Adam in December, including on hydrogen Guibourgé-Czetwertyński, Poland’s But Sedláček highlighted issues pipelines and electrolysers. Undersecretary of State at the with public acceptance of hydrogen, Ministry of Climate and Environment. saying poverty, pricing and politics may prevent its uptake, particularly Speakers at the online event called where dirtier energy is cheaper. on policymakers in Europe to set aside the debate about the sources of “It demonstrates the problems hydrogen production – whether from with access to energy in post- natural gas or renewable electricity communist countries and low income – and focus instead on scaling up households especially. Those low production. That means moving away income households, of course, have a from referring to hydrogen by its tendency to switch to cheap and dirty colour – grey, blue or green depending energy carriers, which immediately on its source – and focusing more on run the countries, together with CO2 emissions. coal usage, into problems with air pollution,” Sedláček said. “We shouldn’t be looking at this colours definition, but we should be In Hungary, hydrogen’s role is seen looking at the CO2 content, which is as two-fold – as storage and as a fuel necessary for the production return,” mixed with natural gas. Projects there said Kurtyka, adding that the EU include research and development should adopt a technology neutral and transport and, crucially, blended approach which also embraces low- hydrogen. carbon hydrogen produced from nuclear electricity. In Poland, the equivalent of €250- THE DUTCH BID FOR EMA

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