HYDROGEN in EUROPE 1000 Efficient Solutions to Protect the Environment in a Profitable Way

February - March 2021 - n°65

UNLOCKING THE FULL POTENTIAL OF HYDROGEN IN EUROPE 1000 efficient solutions to protect the environment in a profitable way.

Today, thousands of solutions exist that can boost economic growth while preserving nature, but they are often hidden in start-ups or research labs. “ They remain unknown to decision makers and are not implemented at industry level, so few people realize that everyone can use them and how profitable they have become. We need to embrace clean technologies and efficient solutions, because they are much more than ‘ecological, ’ they are ‘logical’. ” Dr. Bertrand Piccard, Initiator and Chairman of the Solar Impulse Foundation H

A VOICE TO ENCOURAGE THE A LABEL TO BRIDGE THE GAP TOWARD A PORFOLIO OF IMPLEMENTATION OF SOLUTIONS BETWEEN ECONOMY AND ECOLOGY 1000 LABELLED SOLUTIONS An influential thought leader on One of the first labels for positive To address environmental chal- progress and sustainability, impact businesses bringing together lenges while enabling economic Bertrand Piccard is now working to protection of the environment and growth, Bertrand Piccard has develop collaborations with financial viability. The “Solar Impulse launched, through the Solar governments, institutions and large Efficient Solution” Label is attributed Impulse Foundation, the challenge companies to give them practical following an assessment performed of selecting #1000solutions that can tools to reconcile ecology and by external independent experts. protect the environment in a profit- economy. Therefore, he aims to Solutions applying for the label must able way. His goal is to present them prove that solving climate change – go through a neutral methodology to decision-makers to fast-track rather than an expensive problem – based on verified standards. An their implementation. is a fantastic market opportunity. award for clean and profitable solutions.

BECOME A MEMBER OF THE WORLD ALLIANCE Submit your solution right now SIGNUP.SOLARIMPULSE.COM to have a chance to be listed in the #1000solutions Portfolio.

NEED MORE INFORMATION? Ask about our ecosystem of [email protected] innovators, seekers and investors. EDITORIAL UNLOCKING THE FULL POTENTIAL OF HYDROGEN IN EUROPE 1000 efficient solutions ydrogen is a highly abundant com- accelerate the deployment of hydrogen-based calling on the Commission to further ponent of the universe and is cur- applications. Two other important challenges elaborate and operationalise the EU Hydrogen to protect the environment H rently enjoying unparalleled mo- are to make clean hydrogen economically Strategy while the European Parliament is mentum in Europe and around the world. viable by lowering the costs of the electrolysis expected to adopt its position in Spring. This in a profitable way. With its ambition to achieve climate neutrality process and developing hydrogen transport may lead to intense – but interesting none- by 2050, Europe needs to speed up its energy infrastructure. theless – political debates. transition and reduce by at least 55% its greenhouse gas emissions over the coming Europe is at a turning point to make the In this edition of the European Files, we Today, thousands of solutions exist that can boost economic growth while decade. hydrogen economy a reality. With the pub- explore the potential for a hydrogen-powered preserving nature, but they are often hidden in start-ups or research labs. lication of its Strategy for Hydrogen last future in Europe through the perspective of They remain unknown to decision makers and are not implemented at industry The transition towards a low-carbon summer, the EU laid out its vision to support policymakers and businesses. Their contri- “ economy is both an imperative challenge and the growth of clean hydrogen, outlined a butions analyse the existing economic and level, so few people realize that everyone can use them and how profitable a great opportunity to build a better future number of key actions, and presented three political hurdles and recommend policy they have become. We need to embrace clean technologies and efficient solutions, for our society. Clean hydrogen, whether blue strategic phases in the timeline up to 2050. incentives that will enable the upscaling of because they are much more than ‘ecological, ’ they are ‘logical’. ” or green, can indeed play a critical role in the clean hydrogen technologies and support the decarbonisation path. Hydrogen, which currently accounts for less transition towards a low-carbon economy. Dr. Bertrand Piccard, Initiator and Chairman of the Solar Impulse Foundation H than 2% of Europe’s energy mix, is expected to Hydrogen can enable economic sectors, represent around 14% by 2050. The roadmap Editorial by Laurent Ulmann & Cyrille Mai Thanh in particular power generation, industries, aims at establishing a framework that will transport, and buildings to substantially enable a functioning hydrogen market. reduce their carbon footprint. Today, hydrogen Editor-in-Chief A VOICE TO ENCOURAGE THE A LABEL TO BRIDGE THE GAP TOWARD A PORFOLIO OF production has a high environmental footprint The launch of the Clean Hydrogen Alliance LAURENT ULMANN IMPLEMENTATION OF SOLUTIONS BETWEEN ECONOMY AND ECOLOGY 1000 LABELLED SOLUTIONS because it mostly comes from fossil fuels. which gathers together major players from An influential thought leader on One of the first labels for positive To address environmental chal- According to the International Energy Agency, the whole value chain – from production progress and sustainability, impact businesses bringing together lenges while enabling economic hydrogen is responsible for around 830 to application – will facilitate the necessary Bertrand Piccard is now working to protection of the environment and growth, Bertrand Piccard has million tonnes of carbon dioxide per year. investment to help the scaling up of hydrogen develop collaborations with financial viability. The “Solar Impulse launched, through the Solar technologies across the continent. governments, institutions and large Efficient Solution” Label is attributed Impulse Foundation, the challenge The challenge is to scale up clean hydrogen produced from zero-emission electricity Regarding the legislative process, the companies to give them practical following an assessment performed of selecting #1000solutions that can such as renewable and nuclear energy, and Council adopted its conclusion in December tools to reconcile ecology and by external independent experts. protect the environment in a profit- economy. Therefore, he aims to Solutions applying for the label must able way. His goal is to present them prove that solving climate change – go through a neutral methodology to decision-makers to fast-track rather than an expensive problem – based on verified standards. An their implementation. is a fantastic market opportunity. award for clean and profitable solutions.

BECOME A MEMBER OF THE WORLD ALLIANCE Submit your solution right now SIGNUP.SOLARIMPULSE.COM to have a chance to be listed in the #1000solutions Portfolio. Management: The European Files / Les Dossiers Européens - 19 rue Lincoln, 1180 Brussels www.europeanfiles.eu - ISSN 1636-6085 - email: [email protected] Publication Director and Editor-in-Chief: Laurent ULMANN NEED MORE INFORMATION? Layout & printing: Drifosett Printing - www.drifosett.com Ask about our ecosystem of [email protected] innovators, seekers and investors. Copyright: Shutterstock TABLE OF CONTENTS UNLOCKING THE FULL POTENTIAL OF HYDROGEN IN EUROPE

Renewable Hydrogen: Low-carbon electrolytic hydrogen: a win-win for A Key Driver for Europe’s Energy Transition 6 climate and energy system integration 22 Kadri Simson, European Commissioner for Energy Jean-Bernard Lévy, Chairman and CEO of EDF From Ambition to Action: Enabling Europe to Become a The switch from natural gas to green hydrogen, and its Global Leader in Hydrogen Technologies 7 importance for climate change promises 24 Thierry Breton, European Commissioner for Internal Market Morten Helveg Petersen, MEP (Renew Europe – Denmark), Vice-Chair ITRE Committee The New Decarbonised Hydrogen Economy: a Growth Engine in a Post-Covid Europe 8 A Danish perspective on a clever deployment of Hydrogen 25 Bruno Le Maire, French Minister of Economy, Kristoffer Böttzauw, Director General of the Finance and Recovery Danish Energy Agency

The Portuguese Hydrogen Strategy to Decarbonise its The International Dimensions of the Economy: The Project to Produce Green Hydrogen by European Hydrogen Strategy 26 Electrolysis 9 Hildegard Bentele, MEP (EPP Group), João Pedro Matos Fernandes, Portuguese Minister of Member of the ITRE Committee Environment & Climate Action Natural Gas and Hydrogen: Bridging the Regulatory Gap 27 How Renewable Hydrogen Will Help Descarbonise the Dr James Watson, Secretary General Eurogas European Economy The Case for Spain 10 Teresa Ribera, Vice-President Government of Spain and Towards greater hydrogen production capacity in Europe 28 Minister for the Ecological Transition and François-Régis Mouton de Lostalot-Lassalle, the Demographic Challenge International Association of Oil & Gas Producers, Regional Director Europe Global cooperation is essential for realising hydrogen’s Olav Aamlid Syversen, Vice President Political and Public huge potential 12 Affairs – Global Head of EU Affairs / Country Manager Belgium, Fatih Birol, Executive Director of the International Energy Agency Equinor Energy Belgium NV Building an investment case for hydrogen 14 Why Europe Needs Targets for Hydrogen Energy Ambroise Fayolle, Vice President of the European Investment Bank Infrastructure Rollout 30 Christian Ehler, MEP, EPP ITRE Coordinator Deploying Clean Hydrogen Energy for a climate-neutral Future 16 Hydrogen valleys driving growth and jobs 31 Jens Geier, MEP (S&D, Germany), Rapporteur on the Bart Biebuyck, Executive director of the Fuel Cells and Hydrogen Strategy, Member of the ITRE Committee, Hydrogen Joint Undertaking (FCH JU) European Parliament The scaling up of hydrogen, a European task 32 Hydrogen - Making Europe a leader in each segment Niels Fuglsang, MEP (S&D group), of this strategic value chain 18 Member of the ITRE committee Didier Holleaux, Executive Vice President ENGIE The future of Hydrogen under the Green Deal ambitions 33 Directing Public and Private Investments Towards Maria Spyraki, MEP (EPP – ND Greece) Member of ITRE Hydrogen Production 20 Committee, European Parliament Angelika Niebler, MEP (EPP Group), Shadow rapporteur on the Hydrogen Strategy, Member of the ITRE Committee UNLOCKING THE FULL POTENTIAL OF HYDROGEN IN EUROPE

Hydrogen : Time to scale up ! 34 When hydrogen partners with electrons: Matthieu Giard, Executive Vice-President clean heating for all 50 Member of the Executive Committee AIR LIQUIDE Maximilian Viessmann, Co-CEO Viessmann Group and CEO Viessmann Climate Solutions Changing the ground for a competitive hydrogen ecosystem in Europe 36 Hydrogen blending standards: is harmonisation needed? 52 Jorgo Chatzimarkakis, Secretary General of Hydrogen Europe Alberto Pototschnig, Florence School of Regulation - Robert Schuman Centre for Advanced Studies at the European Full speed ahead: University Institute Developing European Infrastructure for Hydrogen 38 Torben Brabo, Chief Executive Officer, Energinet Gas TSO Andris Piebalgs, Florence School of Regulation and President of Gas - Infrastructure Europe (GIE) Robert Schuman Centre for Advanced Studies at the European University Institute Towards a Continent Powered by Clean Electricity: Leading the Charge on Hydrogen 39 Clean Hydrogen as A Major Enabler for Kristian Ruby, Secretary General of Eurelectric Making Carbon-Free Ammonia and Fertilizers 54 Dr Antoine Hoxha, Technical Director, Fertilizers Europe Hydrogen Strategies and The Importance of Solving the Unlocking the Green Hydrogen Economy through Dual CO2 And Methane Performance Challenge 40 Nicolás González Casares, MEP (S&D, Spain), Business Model Innovation 56 Member of the ITRE Committee, European Parliament Diego Pavia, CEO of EIT InnoEnergy

Hydrogen’s role to decarbonise the European gas grid 42 EU Hydrogen at a crossroads: how to gear up? 58 Jan Ingwersen, General Director of ENTSOG Dominique Riquet, Vice-President of Renew Europe Co-chair of the intergroup on long-term & sustainable Hydrogen as One of the Solutions for the investments & Competitive European Industry Decarbonisation of Transport 44 Elsi Katainen, MEP (Renew Europe, Finland), Member of the Innovation – a key driver of the EU Hydrogen Economy 60 TRAN Committee, European Parliament Stephen Quest, Director-General Joint Research Centre, European Commission Green Hydrogen - The dream of energy transition or just a fade? What does it take to meet the high How can carbon-free hydrogen become more competitive? 61 expectations of a European hydrogen market? 45 Christophe Grudler, MEP (Renew Europe Group), Jan-Christoph Oetjen, MEP (Renew Europe Group), Member of the ITRE Committee Vice Chair of TRAN Committee Clean Hydrogen costs in 2030 and 2050: Hydrogen: a review of the known and the unknown 62 Promising Zero-Carbon Technologies for Future Aircraft 46 Piero Carlo dos Reis, Research Associate - Axel Krein, Executive Director - Clean Sky 2 Joint Undertaking Florence School of Regulation Jean-Michel Glachant, Director - Hydrogen – the Great Unifier? 48 Florence School of Regulation Bertrand Piccard, President of the Solar Impulse Foundation Hydrogen will not be the new oil of the XXI century 64 Green Hydrogen for a carbon neutral transport sector 49 Jean-Marc Jancovici, President - The Shift Project Ismail Ertug, MEP (S&D, Germany), Matthieu Auzanneau, Director - The Shift Project Member of TRAN & ITRE Committees, European Parliament 6 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Renewable Hydrogen: A Key Driver for Europe’s Energy Transition

KADRI SIMSON European Commissioner for Energy

he European Green Deal and achieving sustainable for the long-term. But if we can only need to scale up individual plants, but to carbon-neutrality by 2050 has been scale up renewable hydrogen, there is every develop the associated hydrogen ecosystem T the main priority of the von der Leyen chance it can make a significant contribution and supply chains for storing, transport, and Commission since taking office at the end of to the clean energy transition and strengthen delivering hydrogen to the end-consumers. 2019. Despite the challenges of the Covid-19 European industrial competitiveness at the Investments will be needed to transform pandemic, 2020 was the year of laying down same time. our industrial processes, to build larger elec- the path towards our 2050 target. To decarbonise our energy system, we need trolysers and to develop the hydrogen trucks, Perhaps the most significant step was the more energy efficiency, more renewables and boats and planes of the future. This creates an agreement by EU leaders that the EU should more electrification. However, we also need enormous industrial opportunity for the EU. reduce greenhouse gas emissions 55% by more renewable fuels and gases. In many Our Member States are already responding 2030 (relative to 1990 levels) – as proposed sectors of industry and transport, electrifi- to this challenge. National strategies have by the Commission. This is a political com- cation has the potential to respond to the been launched by France, Germany, Neth- mitment, which ties the EU into raising our challenge. However, there will be areas, such erlands, Portugal and Spain, with draft ambitions for the coming decade. Our services as long-distance and maritime transport as strategies in preparation by Austria, Italy, in the Commission are now preparing a range well as aviation - or certain industrial pro- Poland and others. Furthermore, 22 Member of proposals for this summer, so that the EU cesses (such as steel production) – where States have signed a collaboration agreement can be “fit for 55%”. electrification is simply not an option asit to jointly develop and support innovative At the same time, the Commission provided is not available or not cost effective. This is cross-border hydrogen projects. A recent a number of other key building blocks in 2020 where renewable fuels and gases are needed. agreement signed by Portugal and the Neth- aimed at achieving our medium and long- And this is why renewable hydrogen can erlands to transport renewable hydrogen term goals. Within the remit of energy policy, potentially hold the key to eliminate emissions from Portugal to the Netherlands shows the these include strategies on energy system in these hard-to-decarbonise sectors. Fur- commitment towards a common approach. integration, renovation, offshore renewable thermore, hydrogen will be important to At the same time, clean hydrogen offers energy, and methane emissions. In legislative help balance a renewables-based electricity new opportunities to re-design our energy terms, we also proposed a revision of the system by providing long-term storage and partnerships with our neighbouring countries rules for the trans-European networks for buffering of renewable energy. and regions, and as a way to contribute to energy and produced a detailed assessment I am frequently asked if I think Europe can their clean energy transition. In particular, of how Member States intend to meet their emerge as a leader in a global shift towards North Africa has great potential to supply targets in the coming decade through their clean hydrogen. I have no doubt that we can. cost-competitive renewable hydrogen to the respective national energy & climate plans Already today, the EU is leading in the devel- EU if the renewable power generation in these (NECPs). opment of electrolysers, a key technology countries accelerates. I am therefore pleased While all of these initiatives combine to set needed to convert renewable electricity into that the European Commission and Morocco us on the decarbonisation pathway, the most hydrogen. At the same time, the EU has the are jointly facilitating a new collaborative exciting element for many is the Hydrogen right policy framework in place to accelerate platform on renewable hydrogen under the Strategy, published last July. Its aim – to the large amount of low-cost renewables International Renewable Energy Agency. kickstart investments to scale up the pro- needed to produce hydrogen. The EU is also The European Green Deal provides us with duction and use of clean hydrogen and fulfil the first region with the objective of climate a holistic approach to tackle the climate its potential as one of the key drivers in the neutrality, which gives our industry the challenge. We are applying the same prin- green energy transition. market and investment certainty. ciples to our hydrogen strategy. Hydrogen Although hydrogen is already used in So where do we stand at present? Today, is part of our growth strategy, it fits within the EU, it is for the moment primarily around 60 MW of electrolysers have been a holistic vision of an integrated energy used as a feedstock and less in the energy tested and demonstrated in the EU. By the system, it is based on a collaborative and joint sector– accounting for only 2% of Europe’s end of 2024, we aim to have 6 GW of elec- approach among our Member States, and it present energy consumption – 96% of this trolysers – a hundred-fold increase, and provides an opportunity to shape the global hydrogen is produced with natural gas, 40 GW of electrolysers by 2030 with the aim energy transition. emitting significant amounts of CO2 in to produce 10 million tonnes of renewable For more information, see Commission the process. This form of hydrogen is not hydrogen. To achieve these objectives, we not webpage on hydrogen Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 7 From Ambition to Action: Enabling Europe to Become a Global Leader in Hydrogen THIERRY BRETON European Commissioner for Internal Market Technologies

e have the ambition to become meet 24% of world energy demand by 2050, responsible for the alliance’s operational the first climate-neutral continent with annual sales in the range of €630 billion. work. They are in charge of building a project W by 2050 and reduce emission And as investment cycles in many of the con- pipeline and an investment agenda in their by at least 55% by 2030. This will not be cerned industries and in the energy sector are area, while ensuring coherent implementation possible without a deep decarbonisation of around 20-30 years, and as the interest in along the clean hydrogen value chain. When our industry, our mobility ecosystem and our clean hydrogen is growing globally, we have relevant to their mission, they may also flag energy system. no time to lose. obstacles and bottlenecks for the upscaling of Renewable and low-carbon hydrogen can But most of all, we need to strengthen clean hydrogen, provide input to the work on help us to decarbonise the most polluting partnerships and collaboration among regulations, standardisation, and research and industries like steel, chemicals and heavy industry, EU, Member States and the relevant innovation priorities. transport e.g. trucks or aircrafts, where stakeholders. At the same time, it is clear that public reducing carbon emissions is both urgent and Europe has leading players at each support is necessary for large-scale hard to achieve. For instance, when conditions segment of the clean hydrogen value chain, investments to kick-start the clean hydrogen are right, clean hydrogen could help to reduce but the challenges of scaling up production value chain. The Commission has already emissions in the steel sector by almost 95%. and boosting demand require a systemic identified clean hydrogen and renewables Today, the amount of hydrogen used in the approach along the whole value chain. That as a flagship for the recovery, due to their EU remains limited, and is largely produced is why in July last year the Commission huge potential for energy transition, job from fossil fuels. The aim of the EU action is launched the European Clean Hydrogen creation and cross-border investment. We are to deploy mature clean hydrogen across all of Alliance, which brings together industry, encouraging Member States to do the nec- the most emitting sectors of our economy by national and local public authorities, civil essary investments and reforms as part of the middle of this century, and to become the society and other stakeholders. The Alliance their national Recovery and Resilience Plans. first fully fledged clean hydrogen market in has already attracted a lot of interest, with We also hope to see concrete projects the world. That is the main message sent by more than 1000 organisations - majority of resulting from the manifesto on Important the Hydrogen Strategy for a climate neutral them companies, joining since its launch. Projects of Common European Interest on Europe, which the Commission published last Together with the few thousand participants hydrogen, prepared by the German Presidency year. of the European Hydrogen Forum organised and signed in December by 23 European What is needed however is to create in November, this points to a very big interest countries, which makes clean hydrogen a scale to bring down the costs, especially by from the hydrogen ecosystem. In my dis- truly European endeavour. building a competitive clean hydrogen value cussions with CEOs at the European Hydrogen The EU has supported research and inno- chain in Europe. This of course requires Forum, leading EU companies confirmed solid vation on hydrogen for many years, giving big investments for the scaling up the commitment to objectives of the Alliance. it a head start on the development of clean production of renewable and low-carbon Industrial alliances are built to transform hydrogen and establishing EU leadership for hydrogen, boosting its applications in industry this type of commitment into real action. technologies such as electrolysers, hydrogen and mobility as well as in the necessary The European Clean Hydrogen Alliance will refuelling stations and large fuel cells. infrastructure. establish an investment agenda and support By supporting the development of clean Cumulative investments in renewable the scaling up of the hydrogen value chain hydrogen, we have shown that we are hydrogen in Europe could be up to €180-470 across Europe. It will play a crucial role in serious about decarbonising our industry and billion by 2030, and in the range of €3-18 facilitating and implementing the European attaining our climate neutrality ambitions. billion for low-carbon fossil-based hydrogen. Hydrogen Strategy. It is also a political signal Now we need to consolidate this EU lead- Combined with EU’s leadership in renewables of EU’s commitment to invest in technologies ership to ensure this technology benefits our technologies, the emergence of a hydrogen enabling climate neutrality. economy and society at large. value chain serving a multitude of industrial The work of the European Clean Hydrogen sectors and other end uses could employ Alliance is entering a new phase. Following an up to 1 million people, directly and indirectly. open call for applications, we are now kicking- Analysts estimate that clean hydrogen could off the work of the six thematic roundtables 8 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe The New Decarbonised Hydrogen Economy: a Growth Engine in a Post-Covid Europe BRUNO LE MAIRE French Minister of Economy, Finance and Recovery

2020 has witnessed growing interest for the Fairer the innovation race for the development of tiniest and lightest atom: hydrogen. Hydrogen The economic crisis is also an oppor- hydrogen technologies and its uses, but we technologies and uses have found their way tunity for us to rethink our economic model need massive investments for that. In France, in European Recovery Plans, and hydrogen and the kind of society we call for. Beyond we have earmarked EUR 7 bn for the decarboni- strategies are at the heart of many Member the question of sovereignty, relocation of sation of hydrogen production and the design of States’ decarbonation path. industrial production is also a matter of a hydrogen industry. EUR 2 bn of them are to be preserving jobs in our regions. We have the invested in 2021 and 2022 already, in the frame Why is it the right time? expertise and the talents required in Europe of our stimulus plan “France Relance”. In the wake of the COVID-19 crisis, our top to develop new technologies; we need to priority is to get back on our feet swiftly. Indu- invest in them. Massive public intervention Why should we have a European bitably, bouncing back will require fortitude and support will provide the right impetus for approach? and innovation. It also requires that we invest, businesses to move forward. This battle must be fought together with already now, in our future – and that we have our European partners, in order to compete a clear idea of the future we call for. We want Why should we support hydrogen? with the American and Chinese powers, which to come out of the crisis stronger, cleaner and Decarbonised hydrogen technologies support can rely on substantial domestic markets fairer. all three goals. They offer the opportunity to and a single leadership. The European Single create, on the European soil, an industrial eco- Market is a powerful asset to establish a com- Stronger system key to the continent’s future economic petitive economic area and attract necessary We need a more competitive economy. sovereignty. They contribute to shape a investments. But we need investments on a The Covid-19 crisis proved that we depend competitive and fair economy: we expect the scale that no single Member States can match. too heavily on imports in certain market hydrogen sector will create 50 000 to 150 000 I was very proud to sign, on December 17th segments. It can undermine our ability to direct and indirect jobs in France over the next and along with 22 other Member States, the address major societal issues by our own ten years. Decarbonised hydrogen technologies Manifesto on Hydrogen. We agreed to work on means, such as protecting the health of our also give us tools to tackle the great challenge large-scale joint investment projects in order citizens, disposing of the means to defend of the 21st century: the decarbonation of our to support the development and deployment ourselves, or securing our ability to undertake economies. of hydrogen technologies and systems, and the green transition. We should not rely on In France, we have set for ourselves a clear, to grasp the possibility to shape together massive equipment imports to decarbonize unifying goal: to launch a green hydrogen an Important Project of Common European our economy – unlike what we previously did aircraft by 2035. I trust it can be reached. Interest (IPCEI) that would support the rise with photovoltaic panels. I believe in break- However, applications for hydrogen tech- of our industries in hydrogen technologies through technologies as a leverage to deepen nologies are manifold. Hydrogen is an alter- throughout the value chain. The IPCEI is a our economic sovereignty. native to fossil fuels for vehicles (terrestrial, unique opportunity for Member States to coor- airborne, waterborne), and hydrogen tech- dinate their efforts to foster both economic Cleaner nologies can be seen as complementary to the investments and the green transition, and share In Europe, we have made a commitment battery technology. Hydrogen can also be used the benefits of their cooperation. to tackle climate and environmental-related as a feedstock for industries, such as refining, Yet this is only the beginning of the hydrogen challenges. We have already started to mod- ammonia or steel making. Eventually, hydrogen path. The IPCEI scheme must be complemented ernize and transform the economy with the could also serve as energy storage and facilitate by an ambitious European industrial strategy, aim of reaching climate neutrality by 2050. the integration of renewable energy in our elec- a long-term framework for supercharging We have agreed on a 55% GHG emissions tricity mixes. the twin green and digital transition and rein- reduction intermediary target for 2030. We It is now up to public authorities to share forcing industrial value chains for technologies now need to accelerate the pace on environ- the risks with researchers and industrialists key to our strategic autonomy. I stand ready mental issues. We should move swiftly to in order to come up with new and innovative to implement it together with our European give momentum to our stimulus plans and solutions. I am convinced that the EU has the partners. foster new investments in clean technologies. potential to place itself at the forefront of Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 9 The Portuguese Hydrogen Strategy to Decarbonise its Economy: The Project to Produce Green JOÃO PEDRO MATOS FERNANDES Portuguese Minister of Environment & Hydrogen by Electrolysis Climate Action

ortugal was the first country in the share of renewables in gross final energy The environmental ambition of the EU world to assume the goal of being consumption. During the next decade we aim Green Deal will not be accomplished if Europe P carbon neutral in 2050. Working to achieve 2 to 2,5 GW of installed capacity acts isolated. Climate change is global and is towards that objective our last coal-fired to produce hydrogen, to have between 10% to not limited by national borders. All EU actions power station will be closed this year. We 15% of hydrogen injected into the natural gas and policies will have to contribute to the believe 2021 will be a decisive one in driving grid and build between 50 to 100 hydrogen achievement of the objectives. The challenges the European economy towards recovery refuelling stations. These objectives amount are complex and interconnected. and growth, preparing for the future, namely to an investment of around 7 to 9 billion euros. through the two-fold – green and digital - tran- We believe that a country from southern sition and strengthening society’s resilience. The hydrogen production in Portugal will Europe like Portugal can have an active role Within the Portuguese Presidency of the reduce imports and energy dependency, and push forward the broad use of hydrogen, Council of the EU we look forward to conclude strengthening ours and European Union’s particularly green hydrogen, becoming a the negotiation of the European Climate Law energy security. This will strengthen the key element in accomplishing Europe’s with the European Parliament, enshrining position Portugal as an exporter of green decarbonization goals. As an ambitious and climate neutrality and an ambitious emission energy while decarbonising the industry, innovative country with a robust track-record reduction target for 2030 of at least 55% transport and heating. It stimulates industry in renewables, we bring forward our com- when compared to 1990. and gives new uses to the natural gas infra- mitment and our current state of play in the structure that the country already has in hydrogen field and contribute to the global Hydrogen will play a very important role in place. This will be not only a major industrial market. decarbonization. It will be key, particularly to project, but also an economic and social devel- transform the more “hard to abate” sectors. To opment project which will create or re-qualify achieve its full potential, it is very important existing jobs by calling for new skills and to make progress, taking the necessary steps increase research and development – namely to make its price competitive and create a on electrolysis with waste and salt water. The market, while maintaining investment in green hydrogen production project is focused research and innovation, to develop the on leveraging solar energy, but also wind essential infrastructures and implement energy, on-shore and off-shore, as factors of measures of certification of origin. Fur- competitiveness, industrial transformation thermore, following up on the excellent work and opportunity to increase exports. done by the German Presidency, Portugal will strive to keep hydrogen as a central priority in Decentralising production is one of Por- the energy sector. tugal’s priorities. With that in mind, the Por- tuguese green hydrogen production plans Portugal aims to start the green hydrogen are not limited to the Sines region and there production project on an industrial scale as will be projects of different scale, scattered soon as possible. We are in a good position to throughout the territory. Together with the do so, considering our strategic advantages: new legislation on energy communities, a well-equipped deep-water harbour in Sines; decentralized hydrogen production is an a solar power price among the lowest in the opportunity to attract investment to the world; public land available to install the interior of the country, allowing each ter- hydrogen industrial complex and a modern ritory to make the best use of its endogenous natural gas supply network. We will combine resources and actively participate in the these advantages with our ambitious decar- energy transition, showing - as we have bonization targets for 2030: a 55% reduction always said - that decarbonization, while chal- in greenhouse gas emissions and a 47% lenging, is above all an opportunity. 10 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe How Renewable Hydrogen Will Help Descarbonise the European Economy TERESA RIBERA Vice-President Government of Spain and Minister for the Ecological Transition and The Case for Spain the Demographic Challenge

nergy efficiency and renewable- If renewable hydrogen is the best tech- at a time key international actors such as based electrification are long since nology available for the 2050-horizon, China, South Korea and Japan are solidly E the cornerstone of global action it seems important we concentrate our committing to climate neutrality and the towards decarbonisation. While the Inter- financial and regulatory resources on U.S. Biden administration has made a strong governmental Panel on Climate Change has renewable hydrogen, swiftly and decisively, pledge for the energy transition. These made remarkably clear the need to focus from the very start. We must avoid investing countries are in the works of releasing on reducing greenhouse gas emissions, a in non-renewable technologies that risk ambitious national hydrogen strategies, in number of institutions have filled in the becoming stranded assets in the medium- which they show their clear determination details regarding which technologies can term. We cannot afford squandering our to become leaders on cutting-edge tech- support on this endeavour. For example – the resources on technologies that will not be nologies such as electrolysers or fuel-cell International Renewable Energy Agency has with us in thirty years. components. If the EU intends to become estimated that renewable energy and energy a global frontrunner in this strategic, clean efficiency solutions together offer over 90% The international competition on industrial ecosystem, which will be essential of the mitigation measures needed to reduce renewable hydrogen is expected to be fierce, for our future climate-neutral energy energy-related emissions.

Completing this picture, hydrogen has been widely acknowledged as a key energy carrier to decarbonise those sectors of the economy where electrification is not feasible or cost-effective. Examples of these sectors are parts of the energy-intensive industry, long-haul high load transport, maritime shipping or aviation. Its potential to storing energy and contributing to balancing out our power system is also extraordinary. Hydrogen can certainly play a pivotal role in helping the world – and the EU – achieve climate neutrality by 2050, only if we make sure hydrogen is developed in line with this objective.

The European Commission published in July 2020 the excellent EU Hydrogen Strategy, which made a giant step in moving towards achieving EU climate and energy objectives. This Strategy set the development of renewable hydrogen – produced through electrolysis from renewable sources – as the unquestionable priority for the EU, recog- nising it is the most compatible option with the EU’s climate neutrality and zero pollution goal in the long term and the most coherent with an integrated energy system. Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 11

system, every minute counts. There is no fossil-based hydrogen production – which should plan no new additional investments in time for transition solutions. amounts to 500,000 tonnes per year in natural gas infrastructure, as they risk locking Spain – by renewable hydrogen production. us into fossil fuels for decades, diverting us Fully harnessing the potential for Refining, fertilisers and other chemical from climate neutrality. The geography of renewable hydrogen production within the products are good candidates for such a thing. hydrogen is likely to be significantly different EU, while building a strong, competitive EU Simultaneously, high-temperature industrial from existing natural gas corridors. value chain, must be our priority. For one processes in steel or construction-material reason – the EU has the capacity to succeed manufacturing have a significant potential to Following this vision, Spain has recently in it. According to the International Energy abate emissions by shifting in the short-term approved a National Hydrogen Roadmap, Agency, only between 2020 and 2025, the to renewable hydrogen. Likewise, we see reinforcing Spain’s commitment to renewable increase in renewables-based generation valuable opportunities in the mobility sector, hydrogen. The Roadmap foresees an installed in Europe is expected to be more than nine for example in maritime shipping, aviation or capacity of at least 4GW electrolysers times the rise in electricity demand. Also hard-to-electrify railways. by 2030 – 10% of what expected by the importantly, strategic autonomy and energy European Commission throughout the UE self-sufficiency are valuable assets the EU is In a first stage, Spain is devising the pro- by that year – for which 8.9 billion EURO are in a position to guarantee for the future if we motion of renewable hydrogen clusters, which expected to be mobilised, while foreseeing an make the right decisions now. can bring closer producers and consumers intermediate milestone of 300-600 MW by while creating a synergies-fuelled ecosystem 2024. Spain’s rich renewable resources and R&D&i is going to be an important pillar to kick-start the market. Building renewable solid value chains will be the warrants of this across the whole renewable hydrogen value hydrogen production capacity back-to-back development. Indeed, together with our Por- chain, most particularly for reducing costs to existing hydrogen demand will prevent tuguese friends, we have the potential to build and making renewable hydrogen a cheap, unnecessary transmission and distribution a strong Iberian hub of renewable hydrogen viable alternative to fossil-based hydrogen. infrastructure, reducing investment costs in the medium- and long-term, while first To that end, an Important Project of Common and carbon footprint. In a later stage, we prioritising domestic production and demand, European Interest (IPCEI) on renewable will promote a more distributed production expanding renewable hydrogen clusters and hydrogen can be crucial to facilitate chan- by using electrolysers to facilitate the inte- minimizing carbon footprint and transport nelling the necessary public funds to swiftly gration of increasing shares of renewable costs. achieving technology maturity for renewable electricity, following the guidance provided hydrogen production, while strengthening by the EU Energy System Integration Strategy The post-COVID19 recovery is an excep- cross-border cooperation and creating a and, namely, the principle of energy efficiency tional opportunity. Let us harness it as a genuine EU value chain. first. Before designing any new infrastructure catalyser to inject the impetus renewable or repurposing existing gas infrastructure hydrogen needs to develop its full potential The vision of Spain is to develop the for dedicated renewable hydrogen, we and significant benefits. industrial ecosystem of renewable hydrogen should ensure the existence of sustainable by focusing first on replacing existing and reliable demand. Notwithstanding, we 12 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Global cooperation is essential for realising hydrogen’s huge potential FATIH BIROL Executive Director of the International Energy Agency

ydrogen has for too long been its data and policy expertise to support gov- own choices for this important technology ignored by the energy sector, despite ernments in this critical phase. opportunity. As we pointed in our 2019 H the important role it can play in report, the coming decade will be critical for addressing our environmental challenges Hydrogen technologies are not the only hydrogen’s long-term success. like climate change and air pollution – and ones we need to reach our energy and in enhancing energy security. Momentum climate goals. We will need a wide range of To help the world keep track of progress behind it continues to grow, but IEA analysis clean energy technologies – from renewables, on this front, the IEA will start publishing a shows there is still a huge amount of work nuclear power and energy efficiency to bat- new Global Hydrogen Review this year. This to be done for it to reach a scale that would teries, carbon capture and bioenergy. But report will serve as hydrogen’s North Star, make a key difference to efforts to reach hydrogen is a critical part of any ambitious assessing the impact of all government and international energy and climate goals. clean energy transition strategy. industry plans. It will examine how actual on- the-ground progress compares with stated Much has happened since the IEA released The use of hydrogen will need to expand ambitions from around the world, and help our landmark report on hydrogen at the across many parts of the global energy decision-makers to fine-tune their strategies G20 Energy Ministers Meeting in Japan in sector – from road transport to shipping and to drive real progress in investment. June 2019. Over the past two years, around aviation, from iron and steel production to the 80 megawatts (MW) of electrolysers, which power sector. In fact, if the world is to reach And I am very pleased that Noé van Hulst, produce hydrogen from electricity, were net-zero emissions as outlined in the IEA’s the former Hydrogen Envoy of the Neth- installed worldwide, boosting global capacity Sustainable Development Scenario, hydrogen erlands and now the Chair of the International to around 250 MW. The largest electrolyser could account for as much as 13% of total Partnership for Hydrogen and Fuel Cells in plant to date was opened last year in final energy consumption.And practically all the Economy (IPHE), has agreed to act as a Fukushima, Japan. And two large projects hydrogen production by then would need to special adviser to the IEA on hydrogen-related to produce hydrogen from natural gas with be low carbon, either through the use of fossil matters and ensure that we work with all carbon capture became operational in 2020. fuels with carbon capture, utilisation and hydrogen stakeholders to advance the cause.

They will capture 1.5 million tonnes of CO2 per storage – or through the use of electrolysers. year. In 2019, 12 500 fuel cell vehicles were Around 3 300 gigawatts of electrolysers The time for hydrogen may have finally sold, double the amount of 2018. would be needed. In practical terms, this come, and countries around the world have to requires bringing the equivalent of today’s be ready to seize the opportunity. The IEA is Governments around the world are largest electrolyser into operation every hour ready to do all it can to support this. stepping up their efforts. Since early 2019, for the next few decades. 12 countries and the European Commission have set out ambitious hydrogen strategies or This is why the IEA is deepening and roadmaps. And at least another nine are due expanding its work on hydrogen to support its to be released very soon. continued development. This includes closely collaborating with the Japanese government These encouraging trends show the energy on the Hydrogen Energy Ministerial Meeting world’s high expectations for hydrogen. But this year. The IEA is proud to be able to con- the progress gives us no cause for com- tribute its expertise and convening power to placency – much more has to be done. The the event, since international cooperation ambition of the strategies that governments will be essential for successfully tapping into are setting out is impressive. The challenge hydrogen’s huge clean energy potential now is to design and implement the policies, regulations and investment plans that will Hydrogen is a big opportunity for many turn those ambitions into reality. The IEA is countries. The IEA is committed to help gov- ready to play a significant role by providing ernments and industries in making their very Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 13

Hydrogen – a key pillar for reaching energy & climate goals

Global hydrogen use by sector in the Sustainable Development Scenario, 2019-2070

600 Ammonia production /yr 2

MtH Synfuel production 450

Transport

300 Other

Transport 150

Refining

0 2019 2030 2040 2050 2060 2070

Global hydrogen use grows sevenfold by 2070 compared to today in the Sustainable Development Scenario, with demand growth almost completely met by low-carbon hydrogen.

Renewables hydrogen costs are set to decline

Long-term hydrogen production costs from solar & wind systems

USD/kgH2

The declining costs of solar PV and wind could make them a low-cost source for hydrogen production in regions with favourable resource conditions.

AMBROISE FAYOLLE Vice President of the European Investment Bank

ow-carbon hydrogen could be the Hydrogen’s moment To some extent, hydrogen produced from missing piece needed finally to wean While low-carbon hydrogen’s potential has natural gas is already used in industries such L our energy systems off fossil fuels. been talked about for over 20 years now, the as steel and ammonia production, but the Like oil and gas, low-carbon hydrogen can be ticking clock of climate change – and a need production processes entail significant carbon stored and used when needed. Low-carbon for new energy sources – has renewed the emissions. Renewable energy, such as wind hydrogen can also be used in hard-to-abate focus. To keep the rise in temperature below and solar power, however, can be tapped to industries like steel and ammonia production, 1.5 degrees Celsius, the European Union (EU) produce green hydrogen. The falling prices of and it can decarbonise long-haul transport has pledged to cut its carbon emissions by at renewable energy are making the economic vehicles like buses, trucks, ferries that are dif- least 55% by 2030, compared to 1990 levels, case for hydrogen more clear. ficult to electrify. and aims to become climate neutral by mid- century. In this context, the implementation of Seeing low-carbon hydrogen’s potential, Getting low-carbon hydrogen usage to the the European Green Deal that the European the EU has made low-carbon hydrogen a level of oil or gas requires building large-scale Commission has put forward at the end of core part of the European Green Deal and of production, storage and transport networks – 2019 will be crucial. While existing renewable Europe’s efforts to secure its energy future. investments expected to range from €200 to energy can get us part of the way, hydrogen €500 billion by 2030. Low-carbon hydrogen will be important for the decarbonisation of As a result, political will is coalescing also needs to be competitive with the fossil high emitting and hard to abate industrial around hydrogen. In July 2020, the EU fuels currently used in industry and transport, sectors (for example, steel) which cannot be announced an ambitious Hydrogen Strategy as well as with natural gas, which creates electrified, as well as for transport where bat- that calls for: hydrogen using a steam methane process. teries are suboptimal or not suitable (such as › Scaling up supply and demand for green Whereas hydrogen electrolyser and fuel cell long-distance freight, marine or air). hydrogen; technologies hold big potential for innovation, economies of scale and expanded production will be crucial to bringing down prices for low-carbon hydrogen – as will continued low prices for electricity from renewable energy. In most cases, a higher carbon price on fossil fuels will also be needed to ensure low-carbon hydrogen’s competitiveness. In addition, the regulation governing hydrogen transport and storage may need some adaptation to incentivise investment in the needed infrastructure.

So far, the European Investment Bank (EIB) has focused on financing research and development (R&D) in hydrogen transformation and application technologies, as well as public transport schemes deploying hydrogen buses and rolling stock, and supply or refuelling infrastructure. In the future, we also wish to support projects that expand the supply and use of hydrogen at larger scale, and we hope Ambroise Fayolle, EIB Vice-President and Pierre-Etienne Franc, Hydrogen Council Co-Secretary, that we will be able to do that with the right sign advisory agreement to address climate change with increased investment in hydrogen policy and regulatory framework in place at ©Cyrille Lachèvre/EIB the EU and Member State levels. Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 15

for projects based on business models that promise an adequate risk-return ratio. Hydrogen fuel cell technology may be a good alternative to batteries for buses, trains, ships and potentially planes.

Knowing this, we have funded a number of hydrogen projects in transport, such as hydrogen buses in Riga and hydrogen refuelling stations for buses in Denmark. The H2 Corridor project in France, which received a €40 million loan from the EIB, is building the production, transport and distribution infrastructure needed for a hydrogen-powered transport corridor in the Occitanie region in France.

We need to act together Active coordination, among the EU institutions, national governments and industry, › Supporting the development of new mar- them in sorting through the various financial is essential if the hydrogen dream is to kets and infrastructure; tools – debt products, guarantees or equity become reality. Europe’s transitioning of its › Establishing Europe as a leader in the instruments – that can reduce investor risks, energy systems from high-emitting fossil hydrogen industry, a creator of highly particularly for new technologies or new fuels to low-carbon hydrogen will require skilled jobs. industries trying to scale up. Our support goes massive investment and monumental beyond financial tools, however, to include coordination. In this context, we welcome the European market research and constructing new Commission’s recent proposal to update the business models. Launching initiatives to support EU member Trans-European Networks for Energy (TEN-E) countries’ national strategies and to develop regulation, to include battery and green An example is our support for the HyDeal new financing mechanisms could help. At hydrogen energy storage. initiative. It involves a number of industrial the same time, however, we need to build players – including gas transmission systems hydrogen production, storage and distribution The enthusiasm for clean hydrogen extends operators, electrolyser manufacturers and links across EU member states. Those cross- to the national level, where EU members solar photovoltaic developers – that are border projects will require specific coordi- such as Germany, France, Portugal and the coming together to build a large-scale, inte- nation and an alignment of public resources. Netherlands have crafted their own hydrogen grated hydrogen ecosystem designed to strategies. Germany has even promised to deliver low-cost green hydrogen for industrial In November 2020, following on the back hydrogen development with a public clients. The hydrogen produced will come good experience with the European Battery budget of €9 billion. from solar-powered electrolysis and will Alliance, the European Commission launched be transported via pipelines to a number of the European Clean Hydrogen Alliance, which Providing a catalyst storage and delivery hubs. brings together the industry, public authorities In the last eight years, the EIB has invested and civil society to identify a pipeline of €2 billion euros in hydrogen projects – plowing A public push hydrogen investments. Hydrogen projects are money into electrolysers, catalysts, fuel cells, Building the low-carbon hydrogen eco- being included in the list of Important Projects electric trains, hydrogen bus fleets, refueling system up to the point that it could con- of Common European Interest (IPCEI), which infrastructure and industrial applications. tribute to replacing fossil fuels would require allows them to receive public support. Today, we have approximately €1 billion of enormous investments in renewable energy hydrogen-related projects in our pipeline, such as wind and solar or substantial new The EIB, which cooperates with the and we are looking for more innovators to capacity for carbon capture and storage. The European Battery Alliance, is looking forward finance. At the same time, our new energy EIB has experience in these kinds of projects. to doing the same with the hydrogen industry. lending policy focuses on decarbonisation Higher-risk financing instruments, developed and the potential of low-carbon gases like There is also need and scope for further together with the European Commission, have hydrogen. We have also forged partnerships technological progress in hydrogen con- proved helpful in addressing projects in this with the Hydrogen Council, a group of leading version technologies – from low-carbon sector, which entail significant technical and energy, transport, industry and investment electricity to hydrogen (electrolysers) and to market risk. In addition, EIB advisory services companies, and France Hydrogène, the French electricity (fuel cells). This is an area, where can play a key role to help not-yet mature association for hydrogen and fuel cell devel- the Bank has already accompanied multiple projects to develop. opment, to identify promising projects and companies – small and large – in their R&D innovation. and innovation activities. The Bank remains committed to continue its support for investments in clean hydrogen – in We have the technical experience, through In addition, investment in hydrogen line with the indications of the EU Taxonomy our Advisory Services, in helping innovators transport and storage and re-fuelling – which could range from R&D investments and governments put together projects in (for transport) infrastructure is needed. to demonstration projects, as well as the a way that can attract financing. We guide Investment and finance can be mobilised building of the necessary infrastructure. 16 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Deploying Clean Hydrogen Energy for a climate-neutral Future JENS GEIER MEP (S&D, Germany), Rapporteur on the Hydrogen Strategy, Member of the ITRE Committee, European Parliament

he European Union has endorsed the However, hydrogen is not the silver bullet hydrogen and to establish a functioning and Paris Agreement and has committed solution to decarbonisation. Instead, direct predictable clean hydrogen market that T with the European Green Deal to electrification should be considered the pref- attracts investments, a comprehensive regu- achieve climate neutrality by 2050 through erable option for decarbonisation. In addition, latory framework for hydrogen needs to be a just transition. This transition implies the the EU needs to base its hydrogen economy put in place. The EU gas market regulatory decarbonisation of the entire economy, on clean hydrogen, as only clean hydrogen framework could serve as a blueprint, due to including hard-to-decarbonise sectors. This is sustainable in the long term. To ramp up the common features of hydrogen and gas, transition towards a clean energy system clean hydrogen production and establish the together with the Clean Energy Package, due also needs to ensure security of supply hydrogen economy fast enough to achieve to its holistic approach to reviewing the func- and affordability of energy. As hydrogen our climate goals, low-carbon hydrogen can tioning of the energy market. produced through electrolysis with electricity play a transitional role, as clean hydrogen from renewable energy sources is a clean is not yet sufficiently abundant and com- To ramp up clean hydrogen production alternative to fossil fuels and can be used petitive. However, the European Commission and to prevent diverting renewable energy for various purposes, including feedstock for should continuously assess for how long, for from other use cases to hydrogen production, industrial processes, fuel cells and energy which purposes and how much low-carbon the EU also needs to create sufficient addi- storage, it can make a valuable contribution to hydrogen is needed. I am furthermore con- tional renewable energy production. This this transition. However, hydrogen represents vinced that it is important that fossil-based goes hand in hand with providing the nec- only a small part of the European energy hydrogen is phased out as soon as possible. essary infrastructure for renewable energy, mix and 95% of our hydrogen production is including transporting renewable energy to currently based on fossil fuels1. Furthermore, Hydrogen Classification and Standards hydrogen production sites. The Commission clean hydrogen is not yet competitive. Due In order to create an ecosystem for and Member States should ensure that the to the currently limited availability of low- investments, a single European classifi- missing infrastructure is provided as soon as carbon and clean hydrogen, its use should be cation for the different types of hydrogen is possible. In addition, as renewable electricity concentrated on sectors that operate close to needed. I support the Commission’s proposed is responsible for a significant part of clean competitiveness of hydrogen or that currently classification based on the carbon content hydrogen production costs, it is important to cannot be decarbonised by other means. of hydrogen and stepping away from the reduce costs by abolishing taxes and levies Examples are the steel and chemical industry commonly used colour-based approach. on renewable electricity in order to achieve and aviation and maritime transport. In addition, we need to be able to clearly competitiveness. identify clean hydrogen. For this purpose, I Thus, the EU needs to develop a sustainable suggest the development of standards and Hydrogen Infrastructure hydrogen economy that aims at making clean a European certification and labelling system The EU should avoid a chicken and egg hydrogen competitive as soon as possible. based on an independent, science based problem between hydrogen infrastructure, For this, a hydrogen strategy that covers the review of the lifecycle emissions of hydrogen production facilities and demand. We need whole hydrogen value chain, includes demand production. As clean hydrogen production to develop all elements from the start. The and supply sectors and is coordinated with is based on renewable electricity, we also EU should incentivise infrastructure devel- national efforts, is necessary. The European need guarantees of origin for hydrogen and opment, e.g. through the revision of the Commission has made a first step in this renewable electricity. These elements are TEN-E regulation. I support the Commission’s direction by adopting “A hydrogen strategy for important for hydrogen consumers to be approach to start planning the medium range a climate-neutral Europe” in July 2020. able to invest consciously in clean hydrogen and backbone transmission infrastructure options. from the start to develop a fully-fledged internal hydrogen market as soon as possible. 1 European Commission: Hydrogen generation in Ramping up Hydrogen Production Europe: Overview of key costs and benefits, July To achieve the ambitious goals set in As cost-efficiency is always important, the 2020, https://op.europa.eu/en/publication-detail/-/ publication/7e4afa7d-d077-11ea-adf7-01aa75ed71a1/ the Commission proposal for a Hydrogen existing gas infrastructure could be retrofitted language-en strategy, to scale up the production of clean for pure hydrogen use, which could reduce Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 17

investment costs and levelise the costs of role. Especially, NextGenerationEU, Horizon energy supply and demand. This solution is transmission. Hence, this possibility should be Europe, the Connecting Europe Facility, not competitive yet and the EU needs further assessed on a European and national level. InvestEU and the ETS Innovation Fund can help investments for this purpose. Therefore, I financing clean hydrogen projects and attract welcome the alignment of the hydrogen and Hydrogen Demand additional public and private investments The the energy system integration strategies. The hydrogen demand side is a crucial European Parliament shall continue to push I am now waiting for the Commission’s aspect for developing a clean hydrogen to provide these programmes with sufficient concrete legislative proposals and revisions market and can contribute to decarbonisation. financial resources in the annual budget circle. of relevant existing legislation to set the Therefore, clean hydrogen needs to become regulatory framework for a competitive and a more attractive business case for hard-to- The Role of Hydrogen in an Integrated clean hydrogen market to see if all the afore- abate sectors than investments into fossil- Energy System mentioned priorities will be reflected. In the based solutions. Only then, the EU would be Furthermore, I underline the importance meantime, I am excited to continue the nego- able to prevent carbon lock-ins and to achieve of an integrated energy system to promote tiations for the European Parliament’s own decarbonisation in time. renewable energy. The gas, electricity and initiative report on the European hydrogen hydrogen grids should be coordinated. Here, strategy as Rapporteur. I believe that it can In order to have a better oversight of the hydrogen can play a key role as energy be a valuable input for the legislation to clean and low-carbon hydrogen needed, I storage to balance intermittent renewable come. suggest sector roadmaps that lay out the development of hydrogen demand and investment and research needs for the different demand sectors. These roadmaps should be drafted on a European level in close cooperation between stakeholders and European institutions.

Due to the current lack of competitiveness of clean hydrogen, we should also consider putting in place targeted demand-side policies such as quotas for the use of clean hydrogen in the focus sectors. Innovative measures such as carbon contracts for difference should also be taken into account. The Commission needs to detail, however, how such measures could be financed and implemented.

Research, Development, Innovation and Financing Furthermore, development and innovation along the whole value chain of clean hydrogen remains of paramount importance. We need demonstration projects of industrial scale to be able to implement hydrogen solutions in demand sectors. Here, the European institutions have to ensure the full involvement of SMEs: Some can deliver innovative solutions, while the bulk of them may have limited resources to implement clean hydrogen solutions for their own decarbonisation.

In order to meet the high investment needs to establish a clean hydrogen economy, European programmes can play an important 18 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen - Making Europe a leader in each segment of this strategic value chain DIDIER HOLLEAUX Executive Vice President ENGIE

urope is striving to become the first It is however crucial that hydrogen is solar in our portfolio over the last year. Fur- carbon-neutral continent by 2050 produced from renewable or decarbonized thermore we will almost double the share of Eand as a key milestone on this path, sources in order to make a real contribution renewables in our power generation mix (31 the European Commission proposes to to GHG reduction. GW which makes up 30% today) to 58% by raise the greenhouse gas (GHG) reduction 2030. And at the same time, we are investing target for 2030 to at least 55%. In this regard, ENGIE is convinced that in R&I and industrial pilot projects, in order to during transition both renewable and non- demonstrate the huge potential of renewable ENGIE supports this highly ambitious renewable low-carbon hydrogen are needed hydrogen. Of course, renewable hydrogen is objective which requires a strong accel- to achieve Europe’s ambitious climate targets. currently more costly to produce than non- eration of decarbonization and activation However, hydrogen from renewable sources renewable hydrogen. However, its costs will of all levers. In particular, energy efficiency should be the dominant long-term solution decrease sharply in the future with a competi- and a substantial and rapid increase of all due to its specific benefits. tiveness convergence with other technologies types of renewable energies production is when the carbon price is included. Such a required. Electrification will surely play a In fact, hydrogen helps to better integrate convergence is expected in the early 2030’s. key role but will not be sufficient. Devel- renewable power; converting wind and Therefore, it needs to be developed right now, opment of renewable electricity will have solar electricity into hydrogen allows these with the support of various mechanisms, to to be complemented by renewable and variable energy sources to be stored and/or ensure its deployment at scale. low-carbon gases and liquid fuels as well transported in a cost-efficient way, if needed as renewable (district) heating and cooling over long distances, before reconverting back ENGIE is active in hydrogen production, solutions. Moreover, efficient planning into power or using the hydrogen directly in transport, storage and uses, comprising and utilization of new and existing infra- end-use sectors. Hydrogen produced from almost the whole hydrogen value chain structures both for electrons and molecules renewable power, i.e. inexhaustible sources, is a fundamental pillar of a more integrated also has a better environmental footprint than ENGIE already has a full portfolio of energy system, indispensable to achieve other options. The development of territorial large-scale European projects covering the decarbonization objectives in the most energy hubs offering renewable hydrogen and whole spectrum of the upcoming hydrogen cost-efficient way while ensuring security combining several uses (industry, mobility, economy in Europe and other regions. Few of supply. Renewable and low carbon other final uses), would foster the creation examples: Masshylia, led in cooperation with hydrogen will play a key role to decarbonize of local ecosystems. Moreover, renewable Total near Marseille, aims to supply renewable the energy system. hydrogen has the potential to become a hydrogen, produced locally by dedicated large European strategic value chain capable to scale solar farms, to the Total Biorefinery. The The role of hydrogen in an integrated, generate significant economic growth, jobs HyGreen Provence project developed with the increasingly decarbonized energy and competitiveness, not least due to the deep Durance-Luberon-Verdon region (DLVA) and system technological knowledge present in Europe Air Liquide, comprises green H2 production, and the leading role of European companies a dedicated H2 pipe & large scale under- Hydrogen is a very versatile energy for instance in electrolysis manufacturing and ground storage. ENGIE is also involved in, carrier, which can be used in fuel cell renewable development. We strongly believe respectively, the development of a disruptive vehicles (such as fuel cell trains, trucks and hydrogen can be part of an EU industrial hydrogen liquefaction technology for heavy busses), heating installations (e.g. fuel cell renaissance, that both European public and and long distance mobility (ELHySE project micro CHPs), in hydrogen-ready gas turbines private stakeholders aim at making happen. with ArianeGroup), the deployment of green for electricity production or as a basis for H2 refueling stations in France (RHyZomes e-fuels. It is also an indispensable feedstock At ENGIE, we are working on both sides; project), the HyNetherland project in in numerous chemical and industrial pro- we are investing massively in renewable cooperation with Gasunie, the production

cesses, e.g. in the production of ammonia, energies and we have kept that direction in of methanol with captured CO2 (North-C- methanol or in refineries. Hydrogen is a spite of the sanitary and economic conditions Methanol project), or E-methane production

promising feedstock to produce steel. we have faced, by adding 3 GW of wind, (combination of green H2 and captured CO2 Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 19

like Methycentre project). Let’s mention too (estimated to be twice less expensive than Levers to enable the emergence of a the H2 SINES project in Portugal, where ENGIE new ones). In France, by the same token, Hydrogen market join forces with key national players EDP, Galp GRDF and GRTgaz also invest in R&D and and REN, to develop a renewable hydrogen equipment to adapt their grid for the blending As any “not yet mature” technology, integrated value chain starting with a 100 MW of methane and hydrogen, if and when it Hydrogen – especially the renewable one – electrolysis capacity to supply Galp’s refinery is necessary before a 100% H2 network is needs support. ENGIE welcomes the positive and blend into REN’s Natural Gas network developed. Interconnections between Member messages passed by the European Com- and scaling up to 1 GW for export to Northern states are considered as well; GRTgaz, in coop- mission in its hydrogen strategy issued in Europe. And the list is not exhaustive. eration with CREOS, is developing the first H2 July 2020. We are fully involved in the Clean interconnection between France, Germany Hydrogen Alliance launched by Commis- Additionally, infrastructure companies are and Luxembourg by retrofitting existing gas sioner Breton, with the support of Hydrogen getting ready for the scaled use of hydrogen pipes (MosaHYc project). And all production Europe. and other renewable gases. Indeed, by 2030, means are analyzed: Elengy is assessing the renewable hydrogen production capacity only decarbonized hydrogen production through In addition to the direct investments ENGIE is expected to reach 40 GW, the ambition pyrolysis and use of solid carbon, and the is already making, unleashing the huge stated in the European Hydrogen Strategy. management of the CO2 value chain in the potential of a hydrogen economy requires: Given the hydrogen production potential in LNG terminals. On its side, Storengy works different countries, hydrogen will need to on dedicated H2 storage, based on the large 1. Setting the appropriate regulatory be transported across the EU. To that end, potential to create new salt caverns and framework in the “Fit-for-55%” package the European Backbone Study authored by to convert existing natural gas caverns. It expected by June 2021 to cover renew- eleven gas infrastructure companies provides has just begun a 3 years project (Hypster) able hydrogen, and the complementary a possible map of approximately 6,800 km which will test a pilot cavern for H2 with the “gas” package. These are unique oppor- of H2 pipelines by 2030, consisting mainly financial support of the Fuel Cell & Hydrogen tunities to create the right conditions for of “repurposed” existing natural gas pipelines Joint Undertaking. the rapid growth of renewable and low carbon hydrogen. Those levers should enable a level playing field between all types of hydrogen, to ensure the development of both renewable and low- carbon hydrogen. This starts with a clear terminology and certification schemes, for both of them, On this basis, market tools such as Guarantees of Origin can be developed, as well as market-based support mechanisms and underlying third- parties access to H2 infrastructures;

2. Providing public financial support, at national, transnational and European levels. National plans are announced by a growing number of Member States, sending a strong signal to private stakeholders. The use of the IPCEI frame in the hydrogen sector, which makes countries work together and unleashes public funding, is very welcome, as well as the priority given to hydrogen in the Recovery and Resilience Plans. These crucial commitments by Member States will be complemented by European instruments: Horizon Europe, the Innovation and Modernisation Funds, will help a lot in financing demonstration projects. We expect from the public authorities a stable and long-term support, especially for renewable hydrogen. Eems Haven Power plant As a conclusion, ENGIE is a strong believer (CCGT; 5 units, in the future of hydrogen, and the role that the land next the European Union shall play in that sector. to the last unit We are committed, together with industrial is designated for the 100 partners and policy makers, to make the MW hydrogen EU the champion of the highly promising plant). hydrogen economy. 20 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Directing Public and Private Investments Towards Hydrogen Production ANGELIKA NIEBLER MEP (EPP Group), Shadow rapporteur on the Hydrogen Strategy, Member of the ITRE Committee

The vision for renewable hydrogen (CCS) technologies need to play a significant plants to produce low-carbon hydrogen from The Green Deal sets ambitious targets role to significantly cut emissions in the natural gas using CCS technologies, might be for the reduction of emissions. European short and medium term. up to 18 billion Euro. From now on to 2030, industries work hard to achieve climate investments in electrolyser capacity could neutrality by 2050 and renewable and low- Where do we need to invest - and how range between 24 and 42 billion Euro. And carbon hydrogen will play an important role much? there will be further costs for infrastructure on the way towards this goal. Especially The European Commission estimates to store, transport and distribute renewable for energy-intensive sectors, such as the that cumulative investments for renewable and low-carbon hydrogen. As regards chemical industry, cement, steel or heavy hydrogen could be up to 470 billion Euro transport, existing gas infrastructure should vehicle transport hydrogen is a real option until 2050, taking into account the costs for a be made hydrogen-ready which also requires for reducing carbon emissions. Further, necessary scale up of solar and wind energy. investments. hydrogen can serve as an energy carrier to Investments into the retrofitting of existing transport renewable energy to production sites or other distant demand centres. Addi- tionally, blending renewable hydrogen with natural gas decreases the carbon content, while allowing renewable energy producers to access the gas market.

The Challenge Currently hydrogen from renewable sources is available only at a small scale. It accounts for just around five percent of the world’s hydrogen production and its price is far from competitive. Low-carbon and renewable hydrogen will only contribute to the reduction of emissions all over Europe, if we arrange for ramping up the production of both, low-carbon and renewable hydrogen and, thus creating a market which provides at the end renewable hydrogen at a competitive price. According to a recent analysis of the European Commission, the share of hydrogen in Europe’s energy mix is expected to increase from currently less than 2% to 13 or 14% by 2050. Thus, the necessary installation capacity for hydrogen production from renewable energy is set to be 40 GW of electrolysers within the EU and another 40 GW in neighbouring countries by 2030, compared to a capacity of currently only 1 GW. Having these figures in mind, it is obvious that hydrogen from renewable sources alone will not help to quickly decarbonise industrial production, but carbon capture and storage Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 21

The strategic dimension of building up will also play an important role in research the possibility to account for hydrogen or a hydrogen market - Why we need a and development on renewable and low- synthetic fuels towards renewable targets roadmap carbon hydrogen. Its renewal under Horizon or emission reduction thresholds in specific As set out, creating a hydrogen market Europe was very important but it needs an sectors, could help to increase demand. demands huge investments and a medium increased budget to ensure sufficient funding Carbon Contracts for Difference could also be and long term planning. Thus, we have to for hydrogen R&D. In cooperation with considered for a transitional period. think in milestones and go from low-carbon the FCH JU, the European Clean Hydrogen hydrogen to renewable hydrogen. To achieve Alliance must provide an investment agenda 3. Taxonomy carbon neutrality by 2050, we need a clear and a project pipeline, coordinated between roadmap setting out the necessary steps industry, national authorities and civil society, Taxonomy plays an important role in to be taken and the respective investments as soon as possible. Hydrogen could also be directing future private investments. Thus, required in order to build up a competitive considered in the general objectives of the applying taxonomy rules, it is of utmost hydrogen economy. Partnership for Research and Innovation in importance that private investment in low the Mediterranean Area (PRIMA), given the carbon infrastructure and projects is equally Necessary Investments importance of the Mediterranean area in supported as investments in renewable the scale-up of renewable energy sources. hydrogen projects. Only by a taxonomy 1. Public Investments Investments into gas infrastructure should framework that allows for both investments, also be supported under the framework of we can rapidly move towards a functioning Public and private investment is needed the Important Projects of Common European hydrogen market. for ramping-up a hydrogen economy. To this Interest. end, it is essential that hydrogen is covered in Summary the scope of existing financial EU instruments 2. Private Investments Competitors on the global level, like China, like the ETS Innovation Fund, dedicated to are already stepping up to compete with the funding of innovative low-carbon tech- Apart from public investments, it will be Europe for leadership in hydrogen technologies. The Innovation Fund focus on CCS crucial to also activate private funding. This nology. But Europe is also well prepared to and Carbon Capture and Utilisation tech- means we need to create incentives for compete globally if we arrange for the right nologies and makes it therefore the perfect investments. To do so, it might be necessary political setting: The successful implemen- instrument for ramping-up the low-carbon to evaluate demand-side policies but we need tation of Europe’s hydrogen strategy has the hydrogen market, while it could also con- to avoid the creation of artificial needs and potential to show that the Green Deal can be tribute to achieving market maturity for undue market distortions, wherever possible a driver of economic success and a promoter renewable hydrogen technologies. The Fuel and should preferably stick to market based of European leadership in an emerging global Cells and Hydrogen Joint Undertaking (FCH JU) solutions. Regulatory incentives, such as market. 22 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Low-carbon electrolytic hydrogen: a win-win for climate and energy system integration JEAN-BERNARD LÉVY Chairman and CEO of EDF

3 n these times of uncertainty, where one 11.5 Mt of CO2, i.e. 3% of national emissions . challenging, but we believe that the EU, with emergency chases another, a necessity It is high time to replace it by low carbon its strong industrial basis, has what it takes to remains: CO emissions must be dras- hydrogen. In line with our ‘raison d’être’ build a thriving hydrogen industry by creating I 2 tically reduced. The energy sector is at the in support of a CO₂-neutral future, EDF is joint investment projects throughout the crossroads of climate mitigation, economic developing a new ally to electrification: low- value chain. Europe is already a leading elec- recovery and technological innovation. In this carbon hydrogen produced by electrolysis. trolyser producer with 25–30% of the global perspective, low carbon hydrogen produced market share. EDF wants to support further by electrolysis is a needed complement As soon as electricity emits less than growth in this area and that is the reason why

of direct electrification and is essential to 200 gCO2/kWh, electrolysis reduces the group invested in McPhy, a leading elec- decarbonise key segments of transport and emissions compared to fossil hydrogen. trolyser manufacturer aiming at deploying a

industry. Nevertheless, electricity-based H2 is cur- giga factory in the EU. In addition, the cost of rently 2.5 times more expensive than fossil electrolysis will decrease dramatically and, at Indeed hydrogen could play a major role in hydrogen. Closing this price gap will require the end of the day, we won’t need dedicated achieving carbon neutrality of the continent financial support in the first years on both the funds anymore if we plan a phase-out of all by 2050. Since it is expensive and not easy production side and on the demand side. It is fossil fuels and have a direct substitution of

to produce in a way that does not emit CO2, it clean H2 in place of fossil H2. should be primarily used in sectors where no other solutions are available, such as hard-to- I am truly convinced that it is possible to 3 French Ministry of Ecological and Solidarity abate industrial and transport sectors. Transition – Plan de déploiement de l’hydrogène bring industrial partners around the table pour la transition énergétique https://www.actu- to identify barriers and solutions, to kick off environnement.com/media/pdf/news-31396-plan- Hydrogen is widely regarded as a cutting- hydrogene-ministere-transition-energetique.pdf projects in the field of hydrogen, with an edge technology and the EU leads the way. 50 to 60% of the ecosystem of hydrogen start-ups are based in Europe1. Not only has the European Commission presented an ambitious European Hydrogen Strategy (in July 2020) but many Member States, such as France, Germany, Spain and the Netherlands, aim at integrating hydrogen into their energy future.

However, less than 0.1% of the hydrogen produced in Europe today comes from renewable or low-carbon electricity. At odds with the enhanced EU climate targets2, 95% of this hydrogen is of fossil origin and emits

10Kg of CO2 per Kg of hydrogen produced. In France, the manufacture of fossil fuel-based hydrogen is responsible for the emission of

1 Material economics (2020), Mainstreaming green hydrogen in Europe, commissioned by Breakthrough Energy 2 At least 55% less greenhouse gas emissions by 2030, compared to 1990.

The EDF EIFER publicly funded H2Bus project in Offenburg (Germany) Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 23

open discussion with policy makers. This is the reason why EDF actively participates in the industrial committee of the European Hydrogen Council and in the new European Clean Hydrogen Alliance which is currently being launched by the European Commission. With my fellow co-chairs of the round table on hydrogen production, we aim at identifying the bottlenecks which slow down projects with a view to contributing to a robust EU policy framework. .

With a sound yet flexible regulatory framework and sufficient financial support to kick start this nascent industry, hydrogen growth, technology innovation and ample employment opportunities can be unleashed. This can contribute to the EU post-Covid recovery by locating major parts of the supply chain in Europe rather than betting extensively on imports. What is at stake here is the development of large amounts of low carbon hydrogen. It is indeed crucial that CO2 emissions guide policy making and upcoming support measures. CO2 emissions across the production life cycle must give clarity and transparency to both investors and consumers.

To swiftly deliver significant volumes in a cost-effective way, we also see a key role for electrolysers set up close to the consumption areas and connected to low carbon power grids as this allows the swift deployment of projects and a high number of production hours while reducing transport costs. Imports can be part of the picture but when walking away from fossil fuels the EU should seize the opportunity of reinforcing its energy sovereignty and resilience. To enable this grid connected production of hydrogen, it is critical that the EU policy frameworks enables traceability and transparency, for instance the system of guarantees of origin could be strengthened/ improved to enable the certification of both renewable and low-carbon hydrogen. For this purpose, the EU funded Certif’HY project is a GO system readily scalable.

As the first producer of renewables in Europe, EDF supports the key role of green hydrogen produced with renewable electricity which is at the core of the EU Hydrogen Strategy. Betting on the massive deployment of electrolysis projects is a unique opportunity to find synergies, flexibility and to enhance energy system integration. I am personally convinced that low-carbon and renewable electrolytic hydrogen is a win-win for decarbonisation. Not only does it contribute to fight against climate change, but it can also boost economic recovery while putting the European industry at the forefront of a major technological deployment. 24 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe The switch from natural gas to green hydrogen, and its importance for climate MORTEN HELVEG PETERSEN MEP (Renew Europe – Denmark), Vice-Chair ITRE Committee change promises

he fuel of the future will be green electricity - here hydrogen, either in pure or transporting hydrogen. An obvious solution renewable hydrogen - but for that to concerted form, will be much needed. is to use existing gas infrastructure and pipes T be a reality there is a long but exciting – repurposing them form transporting gas road ahead. We are taking the first steeps Further hydrogen has the potential to to hydrogen. However, one major problem is now, with the Hydrogen Strategy, but we are increase the overall effectiveness of the that we do not know the future demand and going to step up the work in the coming years whole electricity system by using the excess use of hydrogen. both in Parliament, the Commission and the supply in the grid and avoiding that the power member states. production is curtailed. Here hydrogen pro- Many gas pipes are built in areas that are duction can be intensified at night or in the being electrified and does not necessary run In Brussels, some talk highly of natural gas holidays, when electricity demand is lower, by areas with large renewable energy pro- as a transition fuel that can power the green and it is cheaper - thereby using the excess duction. Further we cannot be sure that the transition in the coming years. However, the supply. This means that we need also need to capacity necessary for the hydrogen demand is no long-term future in natural gas but look at the regulation of the power grids, such will meet the gas capacity which the pipes only the risk of a lock-in. The ETS system will that the production of hydrogen will never be are built for. This means that the potential increase the cost of natural gas, while the regulated or taxed in such a way that it will for using existing gas pipes are unknown. prices of electricity and thereby the power of put a damper on the production of it. It is therefore essential, that we start by green hydrogen is expected to fall intensely. assessing the demand for hydrogen and That is why we need to make the transition However, in the long run the need for where it is needed. Further we need to figure to green hydrogen as smooth as possible, green hydrogen and thereby the electricity to out where the hydrogen will be produced and because there is no doubt that we need a power it, will be at such a level, that we need start building the production facilities before complete renewable fuel to reach climate dedicated production facilities to power the we create the infrastructure. Otherwise we neutrality in 2050. electrolysis process. This means that we have risk throwing huge amounts of money after to build solar power facilities, offshore wind infrastructure project we won’t need in the Instead, we should take a long-term per- farms and other renewable energy sources future - instead of spending it on developing spective and secure the funds needed for that directly can power an electrolysis facility the renewable energy required for producing investments in the infrastructure and tech- and thereby be dedicated to hydrogen. the huge amounts of green hydrogen that is nology required to create the green hydrogen necessary for the climate goals. of the future. We need to support large scaled This is why both the Commissions’ Sector electrolysis project, so we can ramp up the Integration Strategy and Offshore Strategy So, there is no doubt the next big project is production form MW to GW of energy. But we are of such an importance. Just to take one green hydrogen when we have met our elec- also need to look at how we produce the elec- angle, the offshore potential is enormous trification limits. We just need to figure out tricity required for the hydrogen production. – wind, wave and tide energy that can be how we get there - starting with developing created at sea and converted to hydrogen the renewable energy needed, ramping up The is no doubt that the most efficient either at old oil platforms or separate energy the electrolysis facilities and figuring out pre- energy source is pure electricity and we must islands before sent to shore. Hereby we can cisely what infrastructure we need to make prioritize to electrify the union - powering it convert massive amounts of renewable hydrogen accessible where it is required. with renewable energy sources. But there will energy directly to green hydrogen, that can be sectors that cannot be electrified where we be used to fuel the mentioned sectors which need an alternative – this is where hydrogen cannot be electrified. comes into the picture. Fueling parts of the heavy industry together with heavy transport, Another important step is to look at the airplanes and ships with green hydrogen infrastructure. There is no doubt that a will create a huge demand. For transport Europe running on green hydrogen, to power the weight of batteries will probably make it heavy transport and heavy industry, will need impossible or inefficient to make them run on large investments in the infrastructure for Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 25 A Danish perspective on a clever deployment of Hydrogen

KRISTOFFER BÖTTZAUW Director General of the Danish Energy Agency

s we welcomed 2021, the first wind difficult to electrify, and change the fuels our the demand at the same time, for instance in turbines was in place in what will trucks, ships and airplanes run on. shipping and other means of transport. The A be the largest offshore wind farm in Danish government is working on a strategy Denmark. The 600 MW offshore wind farm at Next step: a clever introduction of for hydrogen-fuels, which will address some of Kriegers Flak will generate enough electricity green hydrogen in the energy system the core challenges. As was the case with wind to supply 600.000 Danish households. But Denmark has come a long way with phasing energy in the early days of that technology, Kriegers Flak will not be the largest for long. out fossil fuels in the electricity production. In production of hydrogen needs a helping hand The first steps have already been taken to fact, the transition of electricity production to get started and bring the technologies to establish even bigger offshore wind farms in away from fossil fuels is almost completed. full scale. Therefore, one of the very first Danish waters, and while almost half of the The next challenge in the green transition is to +100 MW tenders globally on hydrogen and electricity in Denmark is generated by wind reduce emissions in transport, in agriculture, related technologies is underway. The tender energy today, projections show that in 2027, in industry and in individual heating. However, is financed by the Netherlands in exchange all electricity in Denmark will be based on hydrogen and e-fuels are energy intensive for statistical transfer of renewable energy renewables, with about 75% wind energy. to produce, and thus currently rather in the Danish energy system. The agreement We need wind energy to fulfill our climate expensive. That means that they should be is an example of how hydrogen is a shared targets in the long run. And to do so, Denmark used in sectors with otherwise hard-to-abate priority in both Danish and Dutch energy have decided to use the wind energy to emissions such as heavy transport. politics. With a number of Danish companies produce green hydrogen and to focus on the In a Danish context, green hydrogen is having expertise in hydrogen and related tech- so-called Power-to-X technologies in the hard- not only regarded as a fuel component, nologies, and with a myriad of projects already to-abate sectors. hydrogen is also regarded as a way to thriving, we are looking forward to this tender balance the electricity production and the with great enthusiasm. Two energy islands will serve as energy electricity consumption. In fact, production Denmark has come a long way with phasing hubs and produce e-fuels of green hydrogen enables a higher share out fossil fuels, deploying renewable energy A broad majority of political parties in of renewables in the system. In other words, at scale in the electricity sector, and has taken Denmark have recently set a target of 70% renewable energy and green hydrogen beau- the first steps to electrify what can be elec- reduction of CO2 in 2030 compared to the tifully complement each other. As we see it, trified in transport, heating and in the industry. 1990 levels, and one of the first decisions conditions in Denmark are great for hydrogen The next steps in the green transition may made, was to expand offshore wind energy in production. First Danish waters provide for well be production of green hydrogen to be Denmark even further. This will be done by, ample wind resources and wind technologies used in hard-to-abate sectors. We expect to among other things, establishing two energy are available at prices that are much more have challenges, but with dedication and with islands. The energy islands will be serving attractive than just a few years ago. Fur- the right amount of technology development, as hubs for electricity generation from the thermore, the widespread Danish central hopes are high for a new adventure. surrounding wind farms by collecting and heating system allows for synergy effects distributing the electricity between countries with excess heat being used in the conversion connected by an electricity grid. The intention processes, e.g. from electricity to hydrogen. is to connect the energy islands to neigh- Denmark therefore has the right conditions boring countries, step-by-step, along with to become future exporters of hydrogen and increased energy demand. other e-fuels. The energy islands combined will have 5 GW of wind energy, potentially up to 12 GW Tender on hydrogen and related and not only will the energy islands generate technologies is underway electricity, eventually they will produce This said, however, the introduction of e-fuels based on green electricity. The e-fuel hydrogen and e-fuels into the energy system will serve to enable a green transition of represents a number of challenges. One of the sectors such as heavy transport, which is challenges is to stimulate the production and 26 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe The International Dimensions of the European Hydrogen Strategy HILDEGARD BENTELE MEP (EPP Group), Member of the ITRE Committee

t is at the same time a chance and a burden about 16% of the total patents concerning offers opportunities which should be strate- for industry to adapt their processes to the hydrogen, the three Asian countries alone gically seized at the European level in terms I ambitious climate goals of the EU and to account for more than 55% of all worldwide of a “Common European external energy reduce greenhouse gas emissions. One way patents regarding fuel cells and over 65% of policy”. Studies and projects, for example by could be to replace fossil fuels and feedstock all hydrogen-related patents. Consequently, the German development aid implementing in hard-to-decarbonise sectors with clean the EU has to take fast action to establish a agency, are showing that one option might hydrogen. Hydrogen is for a variety of actors conducive framework which allows for the be to establish an “intermediary European the Holy Grail to reach the ambitious climate full development of its strong international buyer” to grant purchase commitments and goals of the EU and the European Commission brands and by that secure future-proof jobs. by that spur extension of renewable energy and EU Member States support the idea to production and establish long-term delivery establish a “hydrogen economy” to boost At the same time, hydrogen provides relationships. In addition, North Africa and demand and to reach economies of scale. Europe with the chance to re-design its Europa are already connected by several energy partnerships and to promote actively existing natural gas pipelines being the most Until now, the production of clean hydrogen new opportunities for cooperation based cost-effectively and environmental-friendly is not yet competitive in comparison to fossil- on the production of clean hydrogen with way to transport hydrogen. The same is true based hydrogen. Besides the need to speed both neighbouring countries and regions, for Ukraine that has good wind resources up and enhance renewable energy production but also on an international level. The together with a large potential for biomass in Europe, it will be necessary to tap the German government – in the context of its and is already connected to the European potential of renewable energy worldwide, national hydrogen strategy - is one of the natural gas grid. Repurposing for hydrogen first and foremost in regions where due to front-runners in entering new hydrogen could become “the” new task for gas suppliers. their geography renewable energy and sub- partnerships, for example with Marocco, The characteristic of hydrogen as an energy sequently clean hydrogen can be produced Chile or Australia. Co-operation with North carriers and storage allows for optimal usage more cost-efficiently. Africa, with its solar energy resources and its of renewable energy worldwide – Let’s build average of 3.600 hours of sunshine yearly, up a global hydrogen economy! The European Hydrogen Strategy gives us the windy Sahara desert and hydropower the chance to pave the way for these international co-operations. As a prerequisite, to establish a worldwide market for hydrogen, we have to set and promote standards to establish a rules-based market that contributes to a secure and competitive supply of hydrogen for the EU market.

The interest in clean hydrogen is growing globally and the European Union should be ambitious to become a world leader in not only the production of clean hydrogen and the use of clean hydrogen, but also to pay attention to keep its current good position as technology. Competition is strong: countries like China, Japan and South Korea are pursuing ambitious plans for hydrogen and fuel cell technologies and have already established national plans for the development of markets and an industry. While EU countries issue only Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 27 Natural Gas and Hydrogen: Bridging the Regulatory Gap

DR JAMES WATSON Secretary General Eurogas

atural gas currently represents a sig- Natural gas has a key part to play in deployed at scale. There is 33 bcm/year of nificant pillar for our energy system. reducing EU emissions, and has been since grey hydrogen produced in Europe and, if we N In 2018, important coal-to-gas 1990. By 2030, in parts of Europe, using were to work that into blue hydrogen quickly, switching took place in the power sector and, natural gas will displace coal and oil thereby it could already be a big win. by 2019, natural gas accounted for 23% of improving air quality and reducing carbon total EU primary energy consumption. Natural emissions contributing to increased ambition In this respect, and according to all credible Gas accounts for more than 20% of electricity for GHG reduction. More quick wins could be studies from the European Commission to generation, and more than 40% of it is being achieved by replacing oil with LNG in maritime International Energy Agency, the Intergovern- consumed in buildings. transport, or using gas as a transportation mental Panel on Climate Change and our own,

fuel which would require CO2-emission mea- Carbon Capture and Storage is a necessity if Today, the European Commission is com- surement to occur via the well-to-wheel we are to reach carbon neutrality by 2050. The mitted to delivering a long-term vision on approach rather than the tailpipe one. chemicals industry, for example, considers climate neutrality by 2050, with a target of natural gas with CCS and later Carbon Capture at least 55% reduction in greenhouse gas Despite this, however, natural gas will have and Utilization to be a promising pathway to emissions by 2030. This will hinge upon a to ultimately decarbonise itself in order to transition their operations towards climate host of new initiatives such as the renewable help deliver on a bona fide carbon-neutral neutrality. While the large-scale realisation of energy directive and energy efficiency economy, and several options to achieve this CCS has been met with challenges in the EU, a directive, expected during the second quarter are being produced today such as biomethane positive, stable regulatory environment would of 2021, so as to address system integration and hydrogen (both blue and green). Many of enable the sector to play its part fully on the and the hydrogen strategy. Further legislation our members are developing both blue and path to carbon neutrality. due in the fourth quarter will provide an green hydrogen projects and biomethane, opportunity for the gas sector to demonstrate which contribute to Europe’s leading role on Renewable hydrogen will be key to its commitment to fighting climate change, clean gas technologies, providing jobs and achieving the EU’s 2030 climate ambitions as will the new market rules, by focusing on securing economic growth. and climate neutrality by 2050. This will decarbonising gas. be driven by the massive build out of inter- Kickstarting the hydrogen economy needs mittent renewables and the difficulty to store This new climate ambition is a driving force to take place as soon as possible therefore, electricity will result in the need for seasonal for change and Eurogas, which represents with a homogenous regulatory framework to storage through hydrogen production, which more than 50 companies and industry back it including: a binding EU-level target for in turn will help renewable developers to groups from 24 countries in the European renewable and decarbonised gas consistent realise profits from their parks. gas wholesale, retail and distribution sectors, with the existing targets; a harmonised stands committed in supporting the transition. framework for Guarantees of Origin to ensure Ultimately, the bridge lies in a cohesive, Hence, we undertook a study with DNV GL – transparency and tradability; fostering the single policy framework. This is needed to an independent risk management and quality blending of hydrogen and methane so as to enable the development of new value chains assurance consultancy – to determine how drive market uptake and ensure infrastructure for renewable and decarbonised gases. All the EU could deliver on its climate ambitions. interoperability. options must be considered. In parallel, clear The study assesses a pathway to a carbon- technical rules will facilitate hydrogen’s inte- neutral future, comparing it to the European If we do not build now, we will miss out on gration. Over time, this will allow the steady Commission’s 1.5TECH scenario, outlined in the chance of achieving carbon neutrality in growth in final demand for pure hydrogen, in the 2050 long-term decarbonisation strategy. any cost-effective way. Many EU countries sync with the development of infrastructure, What we see is that we could achieve the EU’s recognise that hydrogen will be part of the ensuring the transition to the clean energy climate goals at significantly lower costs than future energy mix. There are projects in economy. European Commission estimates, as long as Germany, France, The Netherlands, Belgium, we develop the hydrogen economy in the Spain, Portugal, to name just a few. Eurogas 2020s. will be working on making sure hydrogen is 28 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Towards greater hydrogen production capacity in Europe

FRANÇOIS-RÉGIS OLAV AAMLID MOUTON de SYVERSEN LOSTALOT-LASSALLE Vice President Political and International Association Public Affairs – of Oil & Gas Producers, Global Head of EU Affairs / Regional Director Europe Country Manager Belgium Equinor Energy Belgium NV

s the EU works to implement the even negative-carbon hydrogen in the long project manager. The study will highlight the historical stimulus and recovery term. technological and financial implications of A plan agreed last year, European The strategy thus seems somewhat various pathways, and inform policy makers leaders rightfully want to make sure success incomplete. In fact, to rely solely on mol- about the types of projects likely required to in delivering not just for today, but for a ecules of renewable-based hydrogen would scale up a hydrogen market and industrial stronger, more resilient Europe in the future. require more electricity generation than if hydrogen value chains in Europe. In the early days of the pandemic in 2020, the entire economy was to be ‘simply’ directly many feared the freshly announced Green electrified. As one senior German government Decarbonizing Heating Deal would be stillborn, sacrificed on the official recently remarked, “it took us 15 years All the while the policy framework is altar of economic recovery at all costs. But to realise we couldn’t electrify everything, still debated, industrial actors are already bold choices were made: to look at the EU’s let’s not wait another 15 to realise we’ll need pursuing a wide range of hydrogen production 2050 climate neutrality objective not as a more than just renewable hydrogen”. projects across Europe. In the UK, around the constraint to the recovery, but as an oppor- city of Leeds, industrial actors have partnered tunity and driver for a more prosperous and An inclusive approach to open up in a regional and multi-sector effort, the “H21 sustainable Union. options Project”, to showcase how 3.7 million homes Truth is, the challenge to produce and and 40,000 businesses, currently heated by Molecules are back in the game deliver meaningful amounts of sustainable natural gas, could become emission-free by The recovery has now become an hydrogen to drive the decarbonisation of the 2034. unequivocal commitment to the twin tran- European economy is not simply one of tech- The pillar of this effort is combining sitions: decarbonising our energy system nology choices. It is also one of safeguarding 12.15 GW of natural gas-based hydrogen pro- and expand Europe’s digital backbone. At the and evolving a competitive internal energy duction facilities with CCS and make smart same time, through analysis presented by the market that delivers affordable energy use of existing gas pipelines and some new

European Commission, the understanding of options for consumers. build to transport hydrogen and CO2. In six what it takes has evolved. Most policymakers Indeed, a technology-inclusive regulatory further phases, it is envisaged to convert, now realize that an ‘all-electric’ mantra will framework, incentivizing GHG emission by 2050, 12 million more homes across the not materialise due to technological and cost reductions, that works for producers and con- rest of the UK alongside other sectors to limitations. Molecules will continue to play an sumers alike, will be essential for European hydrogen sourced from multiple technologies essential role in the transition and can do so global competitiveness, economic prosperity and lowering GHG emissions with 0.25 GtCO2 without compromising on climate ambitions and environmental resilience. equivalent per year. and hydrogen is likely to be central to such Rather than a technology-narrow strategy a future. based on overly optimistic assumptions as Cancelling industrial emissions The European Commission’s Hydrogen a starting point, EU Member States are best Based on this vision, several at-scale Strategy offers us a glimpse of a possible served by a strategy leading them to deploy decarbonisation projects promising to kick direction of travel envisaged for the EU a mix of sustainable hydrogen manufacturing start decarbonisation of industry and power, energy system, setting out ambitions and a technologies. This will better reflect their are now being pursued in this region of the legislative agenda for the years ahead. industrial and technological strengths and UK1. One such example is the “H2H Saltend” Driven by the commendable willingness to allow their industries to thrive in a competitive project2 (Fig. 1) with at its core a natural gas- succeed for the long term, it seems however internal market for hydrogen and contribute based hydrogen project at Saltend Chemicals that the Commission has put most of its eggs to its deployment. in one basket. With a strategy that seeks to To help understand Europe’s hydrogen design policy support and channel finance to potential and inform future policy choices, 1 https://www.drax.com/wp-content/ specific, chosen technologies – in this case IOGP and its Partners will in March this year uploads/2019/11/Capture-for-Growth-Zero-Carbon- Humber-V4.9-Digital.pdf electrolysers using renewable electricity – publish the ‘Hydrogen for Europe’ study com- 2 https://www.zerocarbonhumber.co.uk/ doors are shut for options that can deliver missioned to Norwegian and French research wp-content/uploads/2020/07/equinor-H2H-saltend- low-carbon hydrogen in the near term and centres SINTEF and IFPEN, with Deloitte as brochure-2020.pdf Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 29

Park near the city of Hull. The planned 600 MW autothermal reformer plant to convert natural gas to hydrogen and fitted with CCS would be the largest of its kind in the world. From first production, H2H Saltend will reduce industrial CO2emissions by nearly 900,000 tonnes per year.

In a second step, hydrogen and CO2 pipeline infrastructure will be extended further to other industrial sites in the Humber region, enabling them in turn to fuel switch to hydrogen or capture their emissions. These sites include Drax Power station3, SSE Thermal’s Keadby site, Uniper’s Killingholme site and British Steel at Scunthorpe. Through smart use of a variety of tech- Fig.1: Smart decarbonisation of nologies and network design the region industrial clusters – could come to host a large-scale sustainable H2H Saltend, UK hydrogen demonstrator by the mid-2020s; integrating carbon negative power from bioenergy carbon capture and storage (BECCS) and demonstrate the role of hydrogen in Fig. 2: Partnering for clean cleaning steel production. steel, H2omorrow In the process, not only will the region’s 55.000 workplaces in manufacturing continue to thrive, but a significant contribution will also be made to create an estimated 43,000 new job opportunities that a switch to hydrogen in energy-intensive industrial sectors across the UK could bring. Combined, the regional projects now pursued in the North of England/Humber region would allow for the decarbonisation of nearly 50% of the UK’s industrial emissions!

Clean Steel Similar industrial scale project of manufacturing of sustainable hydrogen is ongoing in the EU. In the border region of the Neth- erlands and Germany, the “H2morrow” project partners are maturing a suitable concept for the generation and transport of natural gas- based hydrogen combined with CCS to the largest German steelworks in Duisburg. or other storage options, e.g. the Porthos are testimony to the prowess and ingenuity The concept involves transport of natural project5 offshore of Rotterdam. of European industry in creating symbiotic gas from Norway via the existing transport The “H2morrow” steel project would allow hydrogen-based decarbonisation clusters network to an autothermal reforming plant for 7 million metric tonnes of climate neutral across sectors, technologies and borders, (ATR) fitted with CCS on the German or Dutch steel per year. Moreover, it would singularly while preserving and creating industrial jobs.

North Sea coast. The ATR plant would have a enable up to 11 million tons of CO2 savings European leaders must encourage the hydrogen reforming capacity of up to 800,000 annually corresponding to close to 20% of deployment of many more such projects by

Nm³/h (2.7 GW), of which 600,000 Nm³/h of German steel industry’s total CO2 emissions encouraging collaboration and partnering hydrogen (2.1 GW) for Thyssenkrupp Steel and more than 5% of total German industrial – which also mitigate risks related to infra- Europe and 200,000 Nm³/h to be provided to emissions! structure investments – rather than pushing third parties. technologies by ideology or decree. Not

The CO2 captured at the ATR plant is Synergy is how we win only will they deliver substantial emission planned to be transported, either by ships or These projects, alongside the large size reductions, they will also secure Europe’s 6 pipelines, to safe CO2 storage at sites such natural gas and CCS-based “H-vision” project economic resilience and growth. as the Northern Lights4 project in Norway and Europe’s largest renewables-only A Europe that successfully leads large scale

hydrogen production project, the “NorthH2“ industrial decarbonisation will inspire global project, both planned in the Netherlands, partners and accelerate emission reductions beyond its own borders. Implementing the 3 https://www.drax.com/energy-policy/capturing- carbon-at-drax-delivering-jobs-clean-growth-and- Hydrogen Strategy through technology levelling-up-the-humber/ 5 https://www.porthosco2.nl/en/ inclusive rather than narrow legislation is an 4 https://northernlightsccs.com/en/about 6 https://www.h-vision.nl/en important first step in that regard. 30 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Why Europe Needs Targets for Hydrogen Energy Infrastructure Rollout CHRISTIAN EHLER MEP, EPP ITRE Coordinator

s part of the European Green Deal, There is also a need to set targets to create technologies, different potential for inno- the Commission adopted on 8 July the necessary energy infrastructure as well vation and a varying demand for hydrogen by 2020 a new dedicated strategy as to provide an appropriate capacity building different industries in each member state. The Aon hydrogen in Europe, in parallel with the to have hydrogen available sufficiently as building of a competitive hydrogen market strategy on energy system integration. It an important bridge technology to decar- that contributes in a time and cost-efficient will bring together different strands of action, bonise energy-intensive energy sectors. The manner to the Union’s climate-neutrality from research and innovation over pro- European Clean Hydrogen Alliance will help objective for 2050 requires well developed duction and infrastructure to the international build up a robust pipeline of investments. transmission infrastructure to distribute effi- dimension. Hydrogen is an essential element Together with Important Projects of Common ciently hydrogen efficiently from production in the energy transition and can account for European Interest (IPCEIs) we have important sites to consumption areas across the Union 24% of final energy demand and 5.4m jobs by means to enhance investment in clean, which may be achieved based on repurposing 2050, says a study by the FCH JU from 2019. decarbonised, and low carbon hydrogen. of existing gas grids and building dedicated The so-called renewable hydrogen (also called The Alliance must be encouraged to come hydrogen transmission infrastructure. green hydrogen) is expected to play a key up with an investment agenda and a project role in the decarbonisation of sectors where pipeline, in cooperation with the Fuel Cells and Fourthly, the Commission must streamline other alternatives might not be feasible or be Hydrogen Joint Undertaking that can ensure its approach on hydrogen with the industrial more expensive. This includes heavy-duty and the implementation of the hydrogen goals strategy and make it part of a coherent long-range transport and energy-intensive set by the Commission as soon as possible. industrial policy. We should call on the industrial processes. I welcome the renewal of the Fuel Cells and Commission to provide a technology-neutral Hydrogen Joint Undertaking (FCH JU) under emissions threshold standard for hydrogen First, the EU Hydrogen Strategy will give Horizon Europe. The Commission should use and a regulatory framework that ensures a boost to clean hydrogen production in it as a competence centre for clean and low guarantees of origin, tradability across Europe. The production of clean hydrogen carbon hydrogen and make use of the expe- member states and is consistent with the needs to be increased by creating a sus- riences gained in the Joint Undertakings, espe- ETS as early as possible in 2021. We need to tainable industrial value chain. We should cially on Hydrogen fuel cells, and to incentivise stress that one core criteria for the standards, boost the demand for clean hydrogen further research into these technologies. I certification and labelling systems should be coming from industrial applications and would suggest to include the deployment of the CO2 footprint rather than the production mobility technologies. Clean hydrogen needs hydrogen in the general objectives of PRIMA method to respect technology neutrality. a supportive framework, well-functioning in line with the priorities of Horizon Europe markets, and clear rules, as well as dedicated in order to strengthen research and inno- Finally, there is a timely need for hydrogen infrastructure and a logistical network. To vation capacities and to develop knowledge production, storage and transport, and distri- target support at the cleanest available and common innovative solutions across the bution infrastructure and the parallel devel- technologies, the Commission must work to PRIMA region. opment of demand and supply. Despite the introduce a comprehensive terminology and concentration on industrial clusters in the first certification, to define renewable and other Thirdly, the transition to a net-zero phase, the progressive reconversion of distri- forms of hydrogen. It must be based on life- greenhouse gas economy requires a clean bution grids and the planning of infrastructure cycle carbon emissions, anchored in existing energy transition that ensures sustainability, for transmission over longer distances and climate and energy legislation, and in line with technology neutrality, security of supply, its regulation should already be undertaken. the EU taxonomy for sustainable investments. and affordability of energy and competi- The synergy benefits of integrating hydrogen tiveness of energy prices. The development production and infrastructure with other parts Secondly, promoting research and inno- of hydrogen systems might be addressed of flexible, multi-energy systems, such as vation in clean hydrogen technologies is differently by Member States, considering waste heat recovery for district heating grids. crucial. If there are 2030/2050 targets on CO2 differences in the topology of their existing Interoperability with the gas system and inter- reduction, they must be reflected in Horizon gas infrastructure, their capacity to develop connection of hydrogen infrastructure within Europe and the related Joint Undertakings. different ways of hydrogen production the EU must be assured. Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 31 Hydrogen valleys driving growth and jobs

BART BIEBUYCK Executive director of the Fuel Cells and Hydrogen Joint Undertaking (FCH JU)

ydrogen Valleys have recently amount of hydrogen, improving the eco- especially concerning business cases and become a global phenomenon, nomics behind the project. It covers the entire regulation. H with integrated, complex projects hydrogen value chain: production, storage, In line with the EU Hydrogen Strategy, the emerging across the world in a drive to distribution and final use. As such, “hydrogen FCH JU has supported and will continue to accelerate the development of the hydrogen- valleys” offer a pathway for scaling up and support the development of hydrogen valleys driven economy. making this technology a viable solution. in Europe both in the mainland and in the In her SOTEU1 address of 16 September This comes as the result of a sustained islands. Last year, we awarded 10 million EUR 2020, European Commission President von process, which started in 2017 with our for the project Green Hysland, which aims to der Leyen pointed to the role of Next Gen- Regions and Cities Initiative, and continues create a ‘green hydrogen ecosystem’ in the eration EU to help deliver hydrogen valleys with the Project Development Assistance Balearic Islands. “to bring life to rural areas”. More recently, in through which we are supporting 11 local Green Hysland will generate, distribute and a speech to the Hydrogen Council, she men- authorities from across the European Union to use at least 300 tonnes of renewable hydrogen tioned their role in creating a “true European develop their concepts for regional hydrogen locally per year, produced from solar energy clean hydrogen market” as they will allow projects into detailed work plans. Hydrogen on the island of Mallorca. Mallorca is ideally Europe to produce hydrogen where it is valleys are also the topic of a Smart Speciali- positioned to develop the first hydrogen hub most economical and build the infrastructure sation Platform3 for industrial modernisation - in Southern Europe, while becoming Europe’s needed to distribute it, while creating growth which aims to support EU regions committed first example of an integrated island economy and jobs. Indeed, this is exactly what Hydrogen to generate a pipeline of industrial investment based on green hydrogen. The project will also Valleys and Hydrogen Islands are: “Places projects following a bottom-up approach. include the development of business models where clean hydrogen creates growth and The H2V platform is undoubtedly an for replicating the project to other EU islands jobs in full respect of the environment”2. important initiative to take the hydrogen and beyond. As the project progresses, it will It does not come as surprise then that valley concept to the next level – and see develop local expertise and new employment more than 1000 participants from across the how is represented at a global level. It is a opportunities in the sustainable energy sector world gathered on 19 January for the online very useful tool for project developers and on the Balearic island, which will come as a launch of the Hydrogen Valley Platform (H2V. not only. Policy makers, local and regional breath of fresh air to the hard-hit economy of eu). This platform was developed by the FCH authorities and many others can benefit from Mallorca. JU, on behalf of the European Commission, its findings. Other previous initiatives supported by the under the umbrella of Mission Innovation The platform will increases the visibility FCH JU are the projects Heavenn (in 2019) “Renewable and Clean Hydrogen” Innovation of Hydrogen Valleys in the industry, among and BigHit (2018). HEAVENN is a large-scale Challenge. policy makers and funding entities and boost demo project brings together production, The platform presents and connects the the uptake of the hydrogen economy. It is a distribution, storage and local end-use of existing regional clusters, with 32 hydrogen great example to show how international hydrogen into a fully-integrated and func- valleys from 18 countries already featured on collaboration on hydrogen can boost the tioning hydrogen valley in the Northern Neth- the platform. hydrogen economy, and we are happy to see erlands, with a total initial investment of 88 The FCH JU coined the concept of “hydrogen so many countries involved and on the track M EUR. At a smaller scale, BIG HIT created a valley” as a way to designate a geographical for developing such projects. hydrogen territory in the Orkney Islands in area – a city, a region, an island or an industrial So far, the global analysis of hydrogen Scotland, benefiting communities and busi- cluster - where several hydrogen applications valleys we undertook for the launch nesses who want to use more locally gen- come together into an integrated hydrogen of the platform shows clear signs of a erated renewable energy. ecosystem that consumes a significant maturing market, but also highlights that I strongly believe that hydrogen valleys the developers face common challenges, will play an integral part in building further momentum in the market and driving

1 State of the Union Speech, 16 September 2020 economic recovery and growth. I would like to 2 Speech by President von der Leyen to the 3 https://s3platform.jrc.ec.europa.eu/ invite all those interested to have a look at the Hydrogen Council, 19 January 2021 hydrogen-valleys platform and to get involved. 32 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe The scaling up of hydrogen, a European task

NIELS FUGLSANG MEP (S&D group), Member of the ITRE committee

2021 marks the 30th anniversary of the must find the most promising projects and utilise excess wind power for the hours where launching of the first offshore wind park invest heavily in them. The EU should be ready production exceeds consumption. “Vindeby”. The wind park consisted of 11 to support Member States and make sure turbines that altogether had a capacity of that state aid rules effectively supports the Let us take the clean way from the 5 MW. Today, one single offshore turbine needed subsidiaries to clean hydrogen. Part- beginning can have a capacity of more than 8 MW. The nerships across the value chain also have to The revision of the TEN-E also highlights world’s largest wind park in operation, the be established. The real climate effect will not another important issue: European funds Hornsea 1, can power 1 million homes and as be reached until clean hydrogen is effectively should only be available for projects that a next step, whole energy islands are under utilised in transportation, freight and industry. are 100 percent carbon free. We do not development. No buyer, no producers, and vice versa. As have the time for transitional experiments such, governments hold an important role in that keep fossil fuels artificially alive. The Today, wind energy successfully brings us stimulating the demand side as well. purpose is to decarbonise the sector, create clean and affordable energy on a large scale. a green economy and eventually eliminate We are now laying the foundation for another Scaling up hydrogen takes a shared carbon dioxide from our energy consumption. vision. A vision where we will create not only effort Therefore, we must put all our effort into green electrification in huge amounts, but In the 1980’s, Danish wind turbine fabricants clean hydrogen products if we are serious also huge amounts of green fuels for heavy used the Danish market as a laboratory while about scaling up the technology. transportation, freight and industry. However, increased export required a rapid scaling up we do not have another 30 years this time. and fast accommodation to mass production. Keep public support Scaling up of clean hydrogen requires both Hydrogen could eventually bring cleaner The need to scale up green energy tech- technological development and a large air to our cities and a healthier planet when nologies is of utmost urgency if we are to market to stimulate growth. The prospects replacing oil and gasoline in heavy freight reach our climate goals. Everything that we of a huge European hydrogen market is vehicles or ships. This will benefit us all. have achieved in the wind industry has to be therefore a necessity for local developers to However, many local societies still do not achieved with in every sector simultaneously strive for speedy innovation and increased applaud the necessary infrastructure projects. at a speed never seen before. According to production. This is understandable: The prospect of the International Energy Agency, 45 percent having large construction sites and energy of carbon dioxide reductions in 2050 has A shared market requires shared infra- plants next door is not something that most to come from technologies that is not even structure. The revision of the trans-European people wish for. But most of their worries can commercialised on a smaller scale at this energy networks (TEN-E) regulation is an be accommodated, for instance through early moment. important step to make sure that the EU public participation, by enabling local com- actively supports clean hydrogen such as munities to engage, to participate financially Clean hydrogen is a major pillar in this electrolysis powered by renewable energy or to compensate nearby communities, while transformation. A known technology with like wind or solar. The support of hydrogen we ensure close cooperation between sectors. little impact today, yet with a huge potential. storage facilities will be an essential part in I believe that if we choose the right approach So how can we overcome its main challenges order to take advantage of the enormous and explain our purposes, we can achieve the and move forward? wind power resources in Europe and at practical implementation of our hydrogen the same time make Europe less energy vision. Public-private partnerships are dependent. Hence, due to the commitment essential to become carbon neutral by 2050, we need Hydrogen has to be scaled up at a massive increase of storage capacity to an enormous speed. This will require guarantee the security of energy supply. At investments from both public and private the same time, the storage perspective of actors. Governments have to keep the risk hydrogen is a major driver in the business of investments low, whereas private actors case as advanced storage is necessary to Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 33 The future of Hydrogen under the Green Deal ambitions

MARIA SPYRAKI MEP (EPP – ND Greece) Member of ITRE Committee, European Parliament

ydrogen is a central element of the 2. Are we prepared to work with a realistic Our first priority is to include hydrogen as EU plans in meeting the net-zero approach based on complementarity and tran- a key part in our energy mix and therefore, H emissions target by mid-century. It sitional technology? we have to provide adequate infrastructure. is not the “silver bullet” for the decarboni- The Council conclusions on December 11th on Investing now in low-carbon gas infrastructure sation of our energy mix, but it is the energy hydrogen underline that emphasis should be will help to avoid a lock-in effect into fossil carrier that we have to invest more heavily. given to hydrogen from renewable sources and assets that otherwise will become stranded as Hydrogen can be used as a feedstock, a fuel that additional renewable energy demand from Europe moves towards net-zero emissions. or an energy carrier and storage, and has hydrogen will have to be taken into account In order to reach the target of at least many possible applications across industry, in the future deployment of clean power gen- 55% decarbonisation by 2030, more upfront transport, power and buildings sectors” as eration capacity. It also acknowledges however, investments are needed to lower the overall the Commission underline on its relevant that the role that low-carbon hydrogen will cost during the lifetime of these investments. Communication. have in an initial phase to ramp up production Before we start building new infrastructure However, before we welcome the new in parallel with blue hydrogen made from we have to repurpose the existing gas infra- hydrogen decade, we have to become very natural gas with carbon capture technology. structure into hydrogen-proper as fast as we well prepared on the following fundamental Since at the same date the European Council can. aspects, which will finally affect the success adapts the conclusions on climate law, it is now Earlier this year, a group of eleven European of the strategy. time for speed action. “The European Council gas infrastructure companies presented plans acknowledges the need to ensure intercon- to create a dedicated “hydrogen backbone” to 1. Do we have the capacity to produce the nections, energy security for all Member connect future hydrogen supply and demand quantity of green hydrogen we need in the EU States, energy at a price that is affordable for centres across Europe. According to those as soon as possible? households and companies, and to respect the plans, 75% of the network will consist of retro- According to the Strategy “in the first phase, right of the Member States to decide on their fitted natural gas pipelines, which are gradually from 2020 up to 2024, the strategic objective energy mix and to choose the most appropriate expected to become redundant as volumes of is to install at least 6 GW of renewable technologies to achieve collectively the 2030 natural gas decrease in the future. hydrogen electrolysers in the EU and the pro- climate target, including transitional tech- duction of up to 1 million tonnes of renewable nologies such as gas”. 4. How can we secure and provide affordable hydrogen”, and “in a second phase, from The translation of this decision depends on energy for our citizens without leaving anyone 2025 to 2030, hydrogen needs to become an the political will of the governments in the behind? intrinsic part of an integrated energy system Member States. However, the update of legis- Under the new ambitions of the Green with a strategic objective to install at least 40 lation in batteries, focusing on a whole life-circle Deal, we proceed to the revision of the TEN-E GW of renewable hydrogen electrolysers by approach, the renovation wave of buildings, the regulation. 2030 and the production of up to 10 million sustainable transports and a number of addi- The objective of the future TEN-E is to tonnes of renewable hydrogen in the EU.” tional EU initiatives consisting the parameters support the implementation of the European Are we ready to proceed so fast in order of the European Green Deal, constitute a Green Deal through the decarbonisation of to address the 2024 target? Shall we invest road map in order to transform not only our energy, transport, industry and buildings, by intensively by all means on technology economy, but also our life model. In order to fostering the deployment of innovative tech- innovation and green hydrogen production achieve this transformation, we need to use all nologies and infrastructure, while keeping the by transforming former coal regions into the available instruments complementary and energy transition socially sustainable. hydrogen valleys and incentivize and facilitate to take into account that big changes are suc- However, we have to be realistic and to our industry to transform itself into green cessful since having people on board. bridge the gap between our ambition of not energy consumer? The milestone of 2024 relaying on fossil fuels, in general, and at the is tomorrow. We have also to be prepared 3. Are we ready to Repurpose our infra- same time to provide affordable energy in the for green hydrogen massive import, par- structure before building new ones? Important market, for our citizens and the industry. In ticularly from Africa, which means additional European Projects of Common Interest are addition, we have to take into account the sta- investments in infrastructure. needed. bility of the system and the security of supply. 34 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen : Time to scale up !

MATTHIEU GIARD Executive Vice-President Member of the Executive Committee AIR LIQUIDE

The development of low-carbon hydrogen is As a world leader in gases, technologies and committed to achieve 100% low-carbon or key for the decarbonization of our society. services for Industry and Health, Air Liquide renewable hydrogen supplied by 2030. Hydrogen is a central pillar of the energy is present in 80 countries with approximately To achieve this objective, it is necessary to transformation required to limit global 67,000 employees and serves more than 3.7 combine amongst other biogas reforming, warming to 2°C. To achieve this scenario, the million customers and patients. With more than the (access and) use of renewable energies, 50 years of experience in the entire hydrogen through water electrolysis as well as the use world will need to decrease energy-related CO2 emissions by 60% by 20501. Hydrogen can play value chain from production to storage, trans- of technologies for the capture and storage of a major role in this transition. In 18 applications portation and end-uses, it is our ambition to carbon emitted during the process of producing in the sectors of transportation, heating and play a world leading role in hydrogen solutions, hydrogen from natural gas. feedstock for the industry, hydrogen could as well as in processes and technologies nec- become the low-carbon solution the most com- essary to decarbonize industries and energy Over the last years, our Group has accel- petitive in 20302. use. In order to open up a new chapter, we have erated its investments in clean hydrogen. A few recently adapted our internal organization to recent announcements: › In the context of the Covid crisis, many steer the way in the hydrogen world. together with the Port of Rotterdam Authority, launch of a jointly created countries have released recovery plans Air Liquide is committed to further develop initiative, which aims at enabling 1,000 rightfully putting hydrogen at the center of the hydrogen markets in Asia, the Middle East, hydrogen-powered zero-emission trucks economic recovery. In 2020, several Member the US and Europe, in industry to decarbonize, States such as Germany, France, Portugal and steelmaking processes, electronics, chemistry, Spain published their hydrogen strategies in refineries as well as the mobility market. Also order to develop the sector by allocating each in the space sector Air liquide has been pre- several billions to it. Most recently, the French paring, testing, and optimizing the installation government created the National Hydrogen and connections of cryogenic lines for launch Council (co-chaired by two CEOs, Patrick Koller pads since the 1980s, including liquid hydrogen from Faurecia and Benoît Potier from Air for the Ariane rocket. Liquide), to structure the relation between the industry and the government in the hydrogen Air Liquide is convinced that it is necessary sector. On its side, the European Union has set, to develop global industrialisation programs in its ambitious hydrogen strategy presented to finance series and deployment at scale in July, a production target of up to 10 million or a support program focusing on key value tonnes of renewable hydrogen in the EU by chains. According to the FCHJU, the projected 2030, for which large investments are needed. deployment of hydrogen would create an These will be discussed in the European estimated EUR 820 billion industry for the fuel Alliance for Clean Hydrogen. and associated equipment for EU companies by 2050. At the same time, the EU hydrogen Air Liquide has been supporting for a long industry could provide employment for about time of Hydrogen and has therefore warmly 5.4 million highly skilled workers3. welcomed all these initiatives. We think that now is the time to scale-up and accelerate. One of our main targets is to gradually decarbonize the production of hydrogen. For mobility applications as an exemple, are

1 IEA Report “Energy Technology Perspective” With a charging time of less than 5 minutes and (2017) a range in excess of 500 km, hydrogen-powered 2 Study “Path to hydrogen competitiveness”, from 3 Report “Hydrogen Roadmap Europe’, FCHJU cars are an efficient alternative in the fight against the Hydrogen Council (2020) (2019). CO2 emissions in the transportation sector. Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 35

on the roads connecting the Netherlands, or Norway and address regulatory enable the development of hydrogen infra- Belgium, and western Germany by 2025 ; obstacles. We already manage a Carbon structure in all EU countries with ambitious › 40% stake acquisition in the capital of the Capture unit in Port-Jerome in France, con- deployment targets. French company H2V Normandy, which vinced that all renewable and low-carbon 5. In order to address the production cost aims to build a large-scale electrolyzer hydrogen production means should be gap of clean hydrogen with conventional complex of up to 200 MW for the pro- considered and largely deployed to reduce hydrogen, setting a carbon contracts for duction of renewable and low-carbon costs and optimise carbon emission reduc- difference (CCfD) scheme in which the EU hydrogen in France ; tions. It is therefore paramount to secure could pay the difference between a strike › inauguration (in January 2021), of the a level playing field between users and price and CO2 market price in the ETS pro- world’s largest electrolyser - 20 MW PEM producers for access to renewable energy gram would be a solution that Air Liquide

unit - based on renewable electricity in and CO2 storage. supports. Becancour, Canada ; 2. Also, a Guarantee of Origins system dedi- › a Franco-German cooperation with cated to hydrogen and relying on what the Along with the right legal framework, the Siemens Energy to lay the ground for CertifHy European project has developed, EU has to continue to financially support large mass manufacturing of electrolyzers that would help attesting the evolution towards scale projects of hydrogen production and will produce green hydrogen. carbon neutral hydrogen production and uses to facilitate the large scale deployment It is crucial to keep in mind that the success giving an appropriate market value. and uptake of clean hydrogen to help decar- of hydrogen requires a systemic approach, 3. Concerning usages, we could distin- bonize downstream uses. It is necessary that from upstream decarbonisation pathways to guish between the main applications the various existing funding instruments (CEF, downstream user segments. The EU will have of hydrogen in order to tailor the policy Horizon 2020, the ETS-Innovation Fund, etc.) the opportunity to set a favourable landscape framework and trigger markets uptake. are designed and combined to finance the for the development of hydrogen this year, Some of these markets might need a step- whole hydrogen value chain. The on-going notably through the ‘Fit to 55’ package and the stone approach for regulation, however, setting of the EU Taxonomy must make it review of the gas package. H2 for industrial application and their asso- possible to direct funding towards renewable ciated infrastructure could remain driven hydrogen and low-carbon projects in line with Putting in place the right instruments by the existing and functional market. the Certifhy approach. and dedicated legal frameworks will allow 4. On the other hand, mobility applications hydrogen to become the second leg of the should be at first and highly supported We believe that, with these policy and energy transition alongside renewable elec- considering the impact on air quality and financial support measures, our European tricity by replacing coal, oil and gas across dif- therefore public health, the maturity of the continent holds unique conditions which can ferent markets of the economy. technologies and their spillover effects on facilitate clean hydrogen markets growth in the other segments. Each country needs to the coming years. It is time for the sector to 1. In order to be successful in the transition foster the scaling-up of distribution infra- scale-up and for companies to play their towards green hydrogen, it is necessary structures in the transportation sector to role on the international scene. Air Liquide is to foster low carbon hydrogen as well, in prepare the users’ shift towards zero ready to lead the way with its strong industrial particular through to support the develop- emission mobility. The Alternative Fuel know-how and expertise in this field. ment of CCS projects as in the Netherlands Infrastructure Directive revision should

On 26th January 2021, Air Liquide inaugurated Port-Jerôme (in Normandy, France) is one of the few sites in the world’s largest electrolyser - 20 MW Europe capable of producing certified low-carbon hydrogen. PEM unit - based on renewable electricity in The Cryocap™ technology can capture up to 100,000 metric

Becancour, Canada. tons of CO2 a year. 36 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Changing the ground for a competitive hydrogen ecosystem in Europe JORGO CHATZIMARKAKIS Secretary General of Hydrogen Europe

he decision of the European Council at for energy to be supported with European called "Important Projects of Common its December summit to fully instruments. The proposal encompasses European Interest" (IPCEI). EU Energy Ministers T support the EU Hydrogen Strategy two new categories for the production and dis- signed a Manifesto under the leadership of marks another highlight in the historical tribution of hydrogen. This legislative proposal the EU Presidency and in presence of EU- year 2020 for the energy transition and represents a first steppingstone towards the Commissioners Vestager and Breton as well for hydrogen. The Council elaborates in realisation of the European Union’s ambition as EIB President Hoyer. In their declaration its conclusions on steps to be taken towards to develop a hydrogen economy and firmly they ”recognise the importance of promoting creating a hydrogen market for Europe and position the EU as a global frontrunner on cross-border collaboration and of working on hence to help the European Union to meet hydrogen. All future infrastructure investments large-scale joint investment projects in order its commitment regarding carbon neu- must be fit-for-purpose and fully aligned with to support the development and deployment trality in 2050. With this the Council gives the objectives of the European Green Deal. The of hydrogen technologies and systems, partic- a clear political guidance to implement the deployment of clean hydrogen at large scale is ularly in hard-to-abate sectors where hydrogen EU Hydrogen Strategy and by asking the contingent on the availability of an appropriate and its derivatives are either the only available Commission to further elaborate and opera- infrastructure to transport hydrogen from its or the most cost-efficient decarbonisation tionalise the objectives thereof notably in point of production to demand centres locally, solution, and of fostering a liquid, sustainable terms of the upscale of electrolysers and regionally and internationally and contestable European hydrogen market in other hydrogen technologies. Additionally, the near future as well as supporting export the Council asks the Commission to Finally, member states launched this same industries.“ The joint projects shall include support a dedicated hydrogen grid devel- week a process to allow more state aid flex- sectors along the whole hydrogen value chain opment in the upcoming revision of the TEN-E ibility with regards to hydrogen projects and the corresponding project pipeline needs regulation whilst supporting the creation of hydrogen clusters across the EU.

Concretely the European Union now heads for the scale up of electrolyser technology up to 6 GW in 2024 and subsequently 40 GW in 2030. This corresponds to one million tons of renewably produced hydrogen in four years and 10 million tons in 10 years. This strategy comes along with earmarked funding by the member states which has already surpassed the 40 billion threshold summing up the different hydrogen strategies of European Member States. At the same time the financial framework Next Gen- eration EU foresees clear instruments to enhance a faster deployment of the strategy. This is backed by the minus 55 percent target to reduce CO2 emissions until 2030 compared to the reference year 1990.

Energy Commissioner Kadri Simson presented a few days after this historical decision by the European Council the new TEN-E regulation on the infrastructure Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 37

to be finalised until March 2021 in order to be available in the post pandemic era. In order put into a legal framework allowing member to frame the conditions for the infrastructure states to fund these projects up to hundred and the hydrogen markets of the future we percent under certain circumstances. might look into the adoption of an overarching legal umbrella guiding all the different ini- The door to let Hydrogen technologies tiatives and activities in the field of clean contribute to a massive and immediate hydrogen. That’s why we should enter into a decarbonisation of different sectors is wide debate about a "Clean Hydrogen Act“ which open now. The course has been set in order allows us to overcome the current situation of a to kickstart the deployment of these tech- scattered landscape with regards to hydrogen nologies by large demonstrators and pilot relevant legislation. The Clean Hydrogen Act projects until 2024. As of 2025 the EU needs would streamline the activities in order to to be ready to adopt elements of market fulfil the ambition of both, the European Com- incentivisation for the use of clean hydrogen mission and the European Council to make and the rollout of a dedicated infrastructure Europe the leading marketplace for clean in order to become the principal global mar- hydrogen in the world. ketplace for clean hydrogen. This includes the idea of decarbonising the current big customers of hydrogen namely industrial clusters using hydrogen as a feedstock already today.

In this context the import of renewably produced or decarbonised hydrogen from destinations that can cheaply produce hydrogen will lead to the establishment of hydrogen hubs, especially via ports like Rot- terdam, Antwerp or Hamburg. Connecting the hubs and the clusters via dedicated hydrogen pipelines will be the first step to build up a dedicated hydrogen infrastructure and backbone all over Europe. Importing hydrogen will be one of the major elements of the European strategy as this creates resilience and establishes new value chains between the EU and its neighbours. Setting the right course is a start but by far not enough. If we are to be successful, the next 4 to 5 years will be characterised by relaxing state aid rules and making use of the financial instruments 38 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Full speed ahead: Developing European Infrastructure for Hydrogen TORBEN BRABO Chief Executive Officer, Energinet Gas TSO and President of Gas - Infrastructure Europe (GIE)

he next vital stage of the energy tran- electricity production is step 1, but the grander serve as feedstock into all processes. Carbon sition in the EU has begun. The 2030 step 2, must secure molecules and liquids dioxide need to be captured and stored or T goal has been defined and the direction being partly replaced by direct electrification, utilized in production of synthetic fuels in com- toward a fully decarbonised Europe for 2050 or indirect electrification via hydrogen. This is a bination with renewable hydrogen. Access to is set. The Commission has come forward with real volume challenge. and transport of CO2 need infrastructure. Gas/ ambitious strategies on system integration and molecule transmission and storage is also here hydrogen. Now action is needed. Being in the Balancing the energy system and linking ready to play new roles. gas sector we feel the change and welcome it. to supplier countries The development of hydrogen in the energy The European gas infrastructure companies On top of this – the intermittent renewable mix will happen along multiple pathways. have the competences and experience that will electricity production and hydrogen production Some EU Member States already use hydrogen help the EU to reach the climate targets. We are – need flexible balancing options, as well as a and can quickly go for large scale clusters developing new value chains; using new tech- possibility for storing large energy/hydrogen and backbone. Other countries have abundant nologies and digital tools; changing the markets volumes over seasons. And electrification in renewable resources, which needs to be further – fitting them to the future needs. Transition on new sectors further increases the seasonal developed in order to support the hydrogen all levels. variations in demand. Again, gas storages can economy. A third group of countries can include easily take the flexibility role in hydrogen. Other blending of hydrogen into the methane gas Developing hydrogen infrastructure types of flexibility and storage will naturally systems. Green electrons and molecules will together also play a role. Gas Infrastructure Europe (GIE) be the main components in the energy is currently preparing a report on the role of Need for clear regulation system. Sun and wind will provide the primary storages in the European Hydrogen Backbone. There is a continued need for gas infra- renewable source for hydrogen. But transport Hydrogen will also be produced outside structure in the European energy system. The from the often remote production sites to the EU: Abundant sun and wind in Northern sector is undergoing a huge transformation. the main consumption centers requires cost Africa. Possibilities for blue hydrogen from But speed is currently affected by uncertainty effective transmission over long distances. Norway or Russia must be included in the EU and ambiguity from the (missing) regulatory This is the key competence for the gas infra- scenarios. These energy sources might provide framework. Roles and responsibilities on structure operators. The recent European cheap hydrogen and could help facilitate the hydrogen should be defined; Clarity on reg- Hydrogen Backbone study shows how the development of new hydrogen infrastructure. ulated services and requirements should be future backbone of hydrogen transmission can Existing (LNG) terminals and pipelines will have decided; Need for joint network planning – gas, develop across Europe in order to facilitate a a role to play here. electricity and hydrogen; Network development green energy system. plans (TYNDP) for these joint projects at the In parallel, smaller and decentral hydrogen Projects are being developed across ENTSO’s; Markets to sector couple (electricity projects are being developed across Europe in Europe to hydrogen, being stored and transported, and clusters. The smaller projects have less financial Hydrogen projects increase exponentially sup- used); Clear value chains – remuneration along risk, can be developed faster; can be closer to porting the climate goals. The Clean Hydrogen the value chains; Securing pilots and Sandboxes; the end-users and rely on local wind and sun. Alliance with its roundtables and matchmaking Guarantees of Origin across sectors and borders Many of these projects need storage facilities. of project promoters with investors will be key and time; Push for renewable energy targets. Some projects need the flexibility to balance instruments in realizing additional projects. A The need for speed, the immense complexity demand and supply, while other projects aim balance between new infrastructure projects and uncertainty shouldn’t hinder progress. at selling the hydrogen for peak power. It is and repurposing of existing assets will be key A dynamic regulatory approach is important expected that these cluster projects will grow for a cost-efficient transition. Huge time- and for the energy transition: Allowing for short and be connected into hubs; which again could cost-savings arises from using the existing term developments to happen, providing the be interlinked by transmission systems. assets. While in other cases, new transmission certainty needed, without picking the winners Size matters. Electricity consumption is and storage infrastructure is needed. and with the possibility for developing the around 2500 TWh in the EU, while molecules Beyond hydrogen is step 3 in full decar- regulatory setup. It’s exciting times and the and liquids (gasses and oil) provided approx. bonization. Full decarbonization of molecules, gas sector will continue to contribute towards 4500 and 6000 TWh of the primary EU energy liquids and solids (natural gas, oil and coal) reaching our climate goals. demand. The decarbonization of existing will need other types of building blocks to Get set – GO! Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 39 Towards a Continent Powered by Clean Electricity: Leading the Charge on Hydrogen KRISTIAN RUBY Secretary General of Eurelectric

he tide is turning in the energy Despite the economic hardship caused by or nuclear power would cut this industry’s sector. The transition to decar- the COVID-19 pandemic, every 10th new pas- emissions. This clean hydrogen, could become T bonised sources of energy to power senger car bought by Europeans was either a a decarbonised source for the production of our mobility, heating and cooling, as well as pure electric or a plug-in hybrid. novel maritime fuels, such as ammonia, or industries is in full swing. If only few years The growing demand for EVs shows a be used as feedstock for other industrial ago this transformation was considered positive trend spurred by the introduction of processes. almost utopian, it is now quickly becoming a EU and national targets for CO2 emissions 50% of the total energy used by industrial reality. But an acceleration of this process and reductions, support schemes for buyers, processes can be directly electrified. Electric strong partnerships across different sectors diversity of models, as well as an increased arc furnaces are progressively replacing the of the economy are urgently needed to win awareness around the reliability of these fossil-fuelled furnaces for the production of the race against climate change, and bring the vehicles. But an extra push is needed to get steel. What’s more, pilot projects that explore greenhouse gas emissions to zero. 40 million EVs on Europe’s road by 2030. the use of green hydrogen instead of carbon- The European electricity sector is speeding The maritime transport, which still relies based feedstock in the steel industry are up on decarbonisation. In 2019, renewable on highly polluting fossil fuels, is another already showing promising signs. energies and nuclear covered 59 % of the segment that urgently needs a credible The price of clean hydrogen is one mix. In 2020 their share rose to 63%. The decarbonisation pathway. In several countries, stumbling block for scaling up its industrial wider penetration of renewables coupled with electric ferries and boats are being introduced use. Re-thinking the taxes and levies applied a progressive phase out of coal capacities for short distances, thanks to numerous inno- to electricity could bring down the cost of have led to a 29% decrease of power sector’s vations that have made batteries cheaper and production, thus making it competitive with

CO2 emissions during the third phase of the better. Moreover, clean electricity is starting fossil fuels. A clear reliable system for clas- Emissions Trading System. to replace the use of on-board oil-powered sifying different types of gases based on This trend is set to continue. As much as generators, while the vessels are docked. their production process will also be a critical 80% of EU’s electricity could be fossil-free This process, known as shore-to-ship or tool to establish trust and transparency for by the end of the decade, putting the power cold ironing, is contributing to the reduction customers. industry in prime position to support other of emissions from one of the most energy sectors in their decarbonisation efforts via intensive port activities. The next frontier: stepping up the direct and indirect electrification. sector integration Indirect electrification – a carbon Europe can make the best use of its clean Electricity – the fuel of choice for the neutral and cost efficient solution power supply to efficiently decarbonise zero-emissions economy While electricity is by far the most efficient transport, heating and cooling, as well as a Today, approximately 70% of greenhouse decarbonisation vector, hydrogen is emerging number of industrial application, by fostering gas emissions in Europe come from energy as an alternative for those sectors, such as strong synergies between these sectors. A use across economic sectors. This being heavy industry or long-haul transportation, more integrated way of working would result caused by their heavy reliance on pollution which cannot directly run on clean electricity. in a more efficient and sustainable system; fossil fuels. As the power sector decarbonises But the production of hydrogen needs to in optimised energy infrastructures able its generation, the electrification of transport be carefully observed, and clean methods to integrate increased amounts of variable segments, industries, heating and cooling will should always be prioritised. With over 95% renewables and support the flexibility needs; put Europe’s carbon-reduction targets within of Europe’s hydrogen produced using fossil and in decarbonising the electrified energy reach. fuels, this industry’s CO2 emissions levels demand. The potential is huge: 63 % of the energy are worryingly high. In 2017, the hydrogen use in transport and in buildings, and 50% of production equalled the emissions stemming that used by industries, can be electrified. from the entire German economy. The road transport sector is already Opting for clean hydrogen, extracted from moving in this direction. A landmark one water through electrolysers powered by million electric vehicles were sold in 2020. the abundant renewable-based electricity 40 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen Strategies and The Importance of Solving the Dual CO And Methane NICOLÁS GONZÁLEZ CASARES 2 MEP (S&D, Spain), Member of the ITRE Committee, European Parliament Performance Challenge

rom the European Union’s (EU) as Energy System Integration, Hydrogen, goal of reducing emissions by 2030, and to inception, energy policy has been at the Renovation Wave, and the Methane strategy. achieve climate neutrality by 2050. F heart of the political activity addressing These strategies will help to reform the our greatest challenges. Given that climate policies and regulations related to energy and Energy efficiency, together with electrifi- change and energy are two sides of the same the transition to a climate neutral economy. cation through renewable and sustainable coin, the need to achieve a carbon-neutral The work to develop the EU Green Deal has energy sources, is the basis of the future economy is one of the most significant chal- not slowed despite the unexpected COVID-19 energy system. However, as renewable elec- lenges of our time. The European Green Deal pandemic. On the contrary, it has accelerated. tricity is unlikely to cover all energy demand is our answer to this challenge, and it will lead The European Green Deal should guide our in the next decades, additional energy carriers us to climate neutrality by 2050 at the latest. steps towards recovery. will of course be required. Therefore, clean It offers us an opportunity to maximize the gas has an important role to play and also a benefits of quality of life, health, resilience, As a shadow rapporteur of the Energy significant place in our discussions. and competitiveness. Sector Integration report, I believe that it is essential to take into account the synergies In the different impact assessments and We are currently discussing how to achieve between energy carriers, infrastructures, and reports we can see that there is significant the Green Deal’s ambitious goals in the most sectors to address the necessary acceleration potential for renewable gases, and most equitable and cost-effective way. Several of Union decarbonization, implementation notably renewable hydrogen, to decarbonize strategies and plans included in the deal have of renewable energies, and improvement of those sectors where cutting emissions is oth- been presented over the last months, such energy efficiency to the levels required by the erwise difficult. The gas sector, amongst other Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 41

sustainable energy carriers, should engage projected to increase by around four times climate-neutrality. We must prevent the in decarbonization, replacing as much as today’s consumption. The methane strategy promotion of demand from having perverse natural gas as possible with clean gases like also proposes to promote the production effects such as increased grey hydrogen. The renewable hydrogen, biogas, and synthetic of sustainable biogas to avoid methane ultimate goal must be clean and sustainable fuels. emissions from waste. This is a win-win gases. Therefore, the Commission’s objective solution, which can also generate addi- to increase the capacity of electrolysers go in For the decarbonisation of our economy in tional revenue streams for farmers and the right direction. It is necessary to prioritize general, and of the gas sector in particular, provide opportunities for development and gases produced with renewable energy (green we must look beyond CO2 emissions. Methane investment in rural areas. However, it is gases) to be consistent with our climate- is the second most important greenhouse essential for biogas developments to comply neutrality objective. Industrial clusters are gas (GHG) —19% are energy-related — as the with strict sustainability criteria, to avoid the an excellent starting point for action while recent European strategy for the reduction of opposite effect. Measures to support biogas possible long-distance infrastructures are methane emissions highlights. The reduction production must be carefully assessed to being planned. of methane emissions is imperative to both avoid perverse incentives that could lead to decarbonize the gas sector and integrate the an overall increase in emissions. Our resources are limited. We cannot afford power and gas sectors. to invest in technologies or infrastructure that We know that biogas will not be enough will be unnecessary in 30 years. It is essential The European hydrogen strategy proposes to meet the necessity of the EU’s decar- to avoid any further lock-in from fossil fuel the use of natural gas combined with CCS bonized gas demand. Synthetic fuels, mainly infrastructures and sunk investments, par- to produce blue hydrogen. In addition to the renewable hydrogen, have a vast potential, ticularly any new fossil gas infrastructure. doubts regarding its economic viability, even not only as a clean carrier but also as an To that end, the taxonomy regulation and the more so considering its compatibility with the industrial opportunity. An energy carrier revision of the TEN-E will help to improve our EU-ETS, we will need to carefully consider any such as clean hydrogen will be necessary to energy infrastructure and interconnections - related GHG emissions, including methane, decarbonize the sectors where direct electri- especially power interconnectors - and to put and how to eliminate them. If we do not take fication is not possible. It will also will allow the funds, tools and strategies in place as we into account all the process’s emissions or to strengthen the power system as it is a embark on the path to climate-neutrality. leaks, we will be cheating on the transition. suitable solution for storage and balancing If natural gas is to have a role as a bridge the system. For this, it is essential to begin Finally, with the Next Generation EU in the transition, those emissions have to by clarifying the different types of hydrogen, instrument, we have an opportunity to invest change without delay. Likewise, to avoid as well as establishing standards that explain in the technologies and processes of the problems with the promotion of decarbonised its characteristics and origin. The upcoming future, be competitive, and improve people’s gases, possible leaks must be clarified and legislative reforms, such as the Renewable lives. It is essential to promote projects that accounted for. Energy Directive, should integrate this type of allow us to meet our climate commitments, measures. avoiding temptations to bet on outdated Nowadays, renewable gases are mainly models. The transition towards climate neu- biogases. According to the EU’s long-term Without demand, we will not be able to trality will benefit from a safe and stable decarbonization strategy, the EU’s con- lower the costs of clean hydrogen. However, regulation that leaves no one behind. sumption of biogas (and biomethane) is not all solutions are compatible with 42 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen’s role to decarbonise the European gas grid

JAN INGWERSEN General Director of ENTSOG

as TSOs will have an the initial ‘no-regrets’ backbone important role to play in of retrofitted or repurposed gas G supporting the upscale of infrastructure and prepare for its the hydrogen economy – in creating gradual expansion. Updated CBA the open access to grids, connecting methodology evaluation criteria the supply and demand dots, and by could include digitalisation of sharing European gas Transmission measuring and data handling, and System Operators’ (TSOs) expe- energy storage and flexibility from rience in markets organisation. The all technologies. The upcoming challenge today is not that the indi- TEN-E revision should account vidual technologies are not proven for the new hydrogen market and and ready, but that they need to deliver this first stage ‘no regrets’ be scaled-up in order to offer cost- backbone. effective climate benefits. In ENTSwOG’s ‘2050 Roadmap for ENTSOG (European Network of Gas Grids’ – published in December Transmission System Operators for 2019 – the European gas TSOs Gas) recognises the changing infra- makes practical recommendations structure needs for transporting on how to effectively combine well- increasing volumes of renewable, functioning, liquid gas markets and decarbonised and low-carbon gases, established security of gas supply, such as hydrogen and biomethane. with the commitment to reach Robust, timely and effective decarbonisation goals. In light of adaptation to meet the needs of the European Commission’s Energy the changing landscape of the System Integration and Hydrogen European energy market allows for Strategies, ENTSOG proposed the the cost-efficient and cost-effective 2050 Roadmap Action Plan. The decarbonisation of Europe’s gas Action Plan indicates how a hybrid, grids. It will facilitate the meeting dual gas quality system with bio- of the EU Green Deal commitments methane and hydrogen molecules and address the post COVID-19 could coexist and form the early recovery plan for a green economy. stages of the hydrogen economy. Existing gas infrastructures will be The hydrogen market could be an important accelerator for this. composed of several clusters (until more mature markets exist), relying Building the EU’s future gas on a cross border, dedicated, inter- network should start already now if connected hydrogen infrastructure we reasonably expect it to be com- or in a blend with natural gas. pleted for 2050. The EU already has a well-established and trusted Gas TSOs fully support the planning process for network European Commission’s plan to development, based on the TYNDP place the EU Hydrogen Strategy process, which should be used at the core of the green recovery, for the future development of the together with the Energy System ENTSOG 2050 Roadmap Action Plan: grid. TYNDP 2022 could identify Integration Communication, and Delivering Europe’s Future Energy Networks Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 43

the revision of TEN-E Regulation. ENTSOG › Adopting similar regulatory principles for will be to produce a Recommendation Report has joined the European Clean Hydrogen hydrogen transport as applied to gas, to annually, and potentially to issue specific rec- Alliance, and co manages its Round Table benefit of all market participants. ommendations as needed. on Transmission and Distribution. In the › European Commission’s clarification engagement for the European Clean on how gas TSOs can have an active Since its foundation in 2009, ENTSOG, along Hydrogen Alliance, ENTSOG will openly and role in supporting the development of a with its Members, Observers and Associated transparently work for: European hydrogen market. Partners have helped to build a competitive and secure European gas market. In the › Allowing for effective impetus and ENTSOG have launched an Advisory next decade, ENTSOG will continue to con- scale, for all types of hydrogen Panel for the Future of Gas Grids with the tribute to the decarbonisation process. The › An inclusive definition for renewable, purpose to ensure transparency and coor- gas system is in transition towards net-zero decarbonised and low carbon hydrogen dination between the entire value chain – to 2050 with existing infrastructure which can › A Guarantees of Origin and Certificates transition to a hydrogen economy, support already support decarbonisation but also System, being effectively connected to gas TSOs and stakeholders in identifying the scale-up of clean gases, as necessary. the EU ETS, as another carbon abate- practical challenges and solutions for gas An adaptation of the energy infrastructure ment solution grids on retrofitting/repurposing of existing is required to develop significant production › A full value chain approach and syner- gas infrastructure, and development of a capacities of renewable and decarbonised gas, gies with Energy System Integration, EU Hydrogen backbone. The panel will also and to adapt the demand to new gases like including consideration on how to deal analyse the role of blending and work on an hydrogen. The transmission infrastructure

with taxation regimes that currently EU-wide approach for CO2 infrastructure. The can be used as a backbone to integrate clean impede market integration of Power- panel will discuss how to convert and adapt gases and support an efficient energy market. to-Gas (P2G). the existing system to future needs, focusing European gas TSOs are ready and willing to › Regional specificities in the EU, in rela- on infrastructure, technical, regulatory and make this happen in a timely, sustainable and tion to hydrogen clusters and hydrogen organisational aspects of such a transition. cost-efficient manner. backbone networks The main deliverable of this Advisory Panel

Photo courtesy of terranets bw GmbH 44 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen as One of the Solutions for the Decarbonisation of Transport ELSI KATAINEN MEP (Renew Europe, Finland), Member of the TRAN Committee, European Parliament

ydrogen is a versatile raw material It can serve as a practical solution for long- new uses for hydrogen. This will help Finland and a promising solution for our distance transportation on heavy trucks, to achieve its goal of a carbon-neutrality by H efforts to build a greener and low- cargo ships and aeroplanes. At its best, a 2035. carbon economy. With sufficient investments hydrogen vehicle could store large amounts In the transition towards low-carbon and right policy-making, clean hydrogen can of hydrogen, refuel fast and emit only water transport, it is vital to keep different options play important part in the future energy vapour. on the table. Building EV-charging infra- system and the fuel mix for transport. structure or developing sustainable biofuels However, there are still a number of do not have to compete with hydrogen, but EU’s target of climate neutrality will revo- technical and economic obstacles to the rather seen as mutually supportive means to lutionize future energy production, industrial hydrogen economy. Today, hydrogen achieve the common goal. processes, housing and transport. This means produced in EU comes mainly from fossil that the use of electricity will multiply and fuels and the volumes are limited. Utilisation Many energy sources and solutions be based on renewable solutions such as of clean hydrogen in the EU calls for massive are needed to decarbonise the European hydrogen produced from solar and wind investments in refueling stations, distribution transport sector. This means deploying power. and production facilities, in which the EU and already available sources such as sustainable national recovery programmes should play a biofuels and electrification and to support and Our transport sector runs still mainly on key role in line with the Green Deal targets. anticipate future solutions such a hydrogen. fossil fuels. Currently transport accounts The already available hydrogen fuelled EU policies should focus on setting common for a quarter of EU’s total greenhouse gas vehicles in local transport, such as city buses targets and creating a good and predictable emissions. Unlike energy, manufacturing will be key in extending the application of investment environment that rewards and agriculture, the transport sector has not hydrogen to other modes of transport. industry and actors for reducing emissions. managed to reduce its emissions from the 1990 levels. The change is yet to come. In addition, further investments in research Hydrogen must be harnessed efficiently and innovation across the entire hydrogen and at a competitive price. The transition to With the new European Sustainable and value chain are needed, with the EU’s Horizon competitive hydrogen economy requires Smart Mobility Strategy, presented by the Europe research programme playing a leading political will, financial support and incen- European Commission last year, the Union role. tivising legislation that supports new tech- is driving for 90 a percent emissions cut in nologies and innovations. The global race is the sector by 2050. The goal is extremely The work to put this all into action has ongoing for the best and most commercially ambitious. The Decarbonisation of the already started. In 2020, the European Com- viable way to produce sustainable hydrogen. transport sector will be challenging with each mission introduced a Hydrogen strategy EU should be an enabler and leader in this mode of transport having its own needs and with the aim to extend the use of hydrogen competition.

particularities. and to reduce CO2 emissions from hydrogen production with advanced technology and For example, electrification shows a renewable energy. promising path to reduce emissions in passenger vehicles and light goods vehicles Member States should show leadership used for relatively short distances. However, too. My home country of Finland participates a long recharging time and heavy batteries among many other EU-countries in the IPCEI create challenges for heavier vehicles over (Important Project of Common European longer distances. This is why we need several Interest) as part of EU´s hydrogen strategy solutions. targeting a faster shift into the hydrogen economy. The aim is to accelerate the Hydrogen, on the other hand, can be industry’s transition to the production and use refuelled quickly without heavy battery packs. of clean hydrogen and the development of Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 45

Green Hydrogen - The dream of energy transition or just a fade? What does it take to meet

JAN-CHRISTOPH OETJEN the high expectations of a MEP (Renew Europe Group), Vice Chair of TRAN Committee European hydrogen market?

s Vice Chair of the European Parlia- of hydrogen in the European Union’s energy and refuelling stations. Additional money ment’s Transport & Tourism Com- mix from 2% today to 13-14% by 2050. is needed for electrolysers, retrofit “fossil” A mittee, mobility means to me lived In its Smart & Sustainable Mobility Strategy, hydrogen production sites and capacity freedom; a value that always needs to be published in December 2020, the Commission expansion. One crucial pillar of financing is maintained. By 2050, the European Union set milestones for a green, sustainable and the InvestEU program, the capacity of which wants to be climate neutral, which means resilient transport system: By 2050 nearly has been duplicated by the Recovery and a European economy with net-zero gas all cars, vans, buses as well as new heavy- Resilience Facility. It supports the leveraging emissions. This objective is at the heart of duty vehicles will be zero-emission. By 2035, of private investment in order to expand the Green Deal and in line with the EU’s com- a zero-emission aircraft is expected to be the hydrogen economy. SMEs also play a mitment to global climate action under the market-ready. In my view, these ambitious significant role in the Union’s energy and Paris Agreement. Hydrogen has a promising goals must be achieved with the help of transport value chains. For me it is therefore future herein and is a key building block hydrogen technology and hydrogen drives. of utmost importance that they have equal towards this objective. Within my mandate as I am convinced that mobility applications access to these hydrogen support tools. Member of the European Parliament I strongly are the first and most important large-scale Besides that, Research and Development support the push for green hydrogen as an industries in which hydrogen can be applied. is significant in making hydrogen cost-com- integral part of Europe’s future emission- Electric vehicles with hydrogen and fuel cell petitive with conventional fuels while at the free mobility and for its vital role in the EU’s drives are already available on the market and same time minimizing the environmental energy mix. due to the Alternative Fuels Infrastructure impacts of its production. Public funding In Europe and around the world, public Directive, the European network of hydrogen such as through the Innovation Fund and attention for hydrogen has been growing filling stations is growing steadily. Revising InvestEU shall finance large demonstrators. significantly. One driver has been the this directive can now make hydrogen a man- Moreover, research fields like more efficient European Commission’s hydrogen strategy datory fuel for all transport modes. The EU electrolysers, hydrogen from algae solar for a climate-neutral Europe, released in July should work on points of synergy between water splitting and pyrolysis, as well as infra- 2020. This roadmap foresees hydrogen as the Trans-European Transport Network structure solutions for large-scale hydrogen an intrinsic part of an integrated EU energy (TEN-T) and the Trans-European Energy distribution, storage and delivery shall be system with a strategic objective to install Network (TEN-E), to achieve this process. Such advanced. at least 40 GW of renewable hydrogen elec- a change would require a large availability It is clear that green hydrogen energy will trolysers by 2030 and to produce up to 10 and coverage of refuelling options, not least become a significant pillar of the EU’s future million tonnes of renewable hydrogen in the because of the specificities of infrastructure energy system, and that it will enable us to EU by the same year. Moreover, almost all for heavy-duty vehicles. To provide for this, reach our ambitious climate-targets. Its vast Member States included hydrogen in their the European Union urgently needs to adopt a potential and varietal use for the transport, national policy frameworks for alternative regulatory framework and common technical industry and the housing sector, will pave fuels infrastructure, with some states already standards, which enable interoperability. A the way for decarbonisation. But to ensure adopting their own hydrogen strategies. To denser network of filling stations would allow that it does not just remain a dream, boosting me, it is obvious: hydrogen technology is en for a broader application of hydrogen fuel demand and supply on a competitive interop- vogue. cell mobility, and the combustion of (green) erable European hydrogen market, must be The advantages of hydrogen lie in its hydrogen in conventional internal combustion created. For all of this to work, the European diversity. It can be used as feedstock, as engines. As alternative or in addition to this, regulatory framework must consolidate its storage or energy carrier and as fuel. Within adding green hydrogen to conventional fuel economic, industrial and energy policy. My the transition of electricity production to production could already achieve a significant role is to ensure that Europe sees the big renewable energy sources and reduction reduction in CO2, a method comparable to picture and that our politics do not focus on of GHG emissions, hydrogen is a potential adding biofuels. one single technology, but instead ensure that added value across multiple industries and The European Commission estimates that future legislation is open to any form of tech- sectors. The roadmap of the Commission’s an investment of only 65 billion euro will be nology and future innovations. Hydrogen Strategy aims to increase the share needed for transport, distribution, storage 46 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen: Promising Zero-Carbon Technologies for Future Aircraft AXEL KREIN Executive Director - Clean Sky 2 Joint Undertaking

he Clean Sky 2 Joint Undertaking’s low- or zero-carbon sector. We need to work to decarbonise. It is energy-intensive, char- ambition is to enable step change in all angles on the aircraft. Analysis performed acterised by capital-intense equipment with T aviation’s environmental and climate in the early stages of preparing the next extremely long life cycles, and is obviously impact, and lay the ground work for the EU decade of research and innovation (e.g. in safety critical. And crucially when comparing aviation sector to reach climate neutrality by the EU under the Horizon Europe framework) to sectors ‘on the ground’, aircraft weight/ 2050 in line with the European Green Deal’s has shown that technological advances in the mass constraints preclude many potential objective. In order to achieve this, an ambitious next decade can help reduce aviation’s energy low-emissions technologies that simply agenda is in progress to deliver technologies intensity by around one third to one half. This ‘won’t fly’ given the need for very high energy across the aircraft’s overall architecture, its is an essential step towards a low-carbon mass-density. Current battery technology is aerodynamics, structural design, propulsion and ultimately climate-neutral system as the one example where, despite big advances and on-board systems. Clean Sky has built single biggest contribution is always ‘using in power density, the state-of-the-art is still a remarkable eco-system across the full less’ and driving for energy efficiency. The several factors below what would be needed breadth of the EU involving over 900 par- final push is certain to also need a re-think for major adoption in large commercial ticipating organisations, including a significant and reconsideration of the energy sources on airliners. participation of European SMEs and univer- board the aircraft, i.e. the transition away from Hydrogen is an alternative energy source sities, as well as research organisations and fossil fuels towards low- or zero-emissions which could significantly reduce aviation’s industry. energy sources. climate impact. It eliminates carbon dioxide

As is often noted, there is no single However, the aviation sector is, beyond (CO2) emissions in flight and when it is ‘silver bullet’ to transform aviation into a any doubt, one of the most difficult sectors produced carbon-free (i.e. through renewable energy sources) it creates a true zero-carbon solution to flying. The climate impact of aviation, as measured by the global warming potential

of its emissions, is not just a matter of CO2.

Aircraft impact the climate through non-CO2 emissions as well, i.e. nitrogen oxides (NOx), soot, and water vapour, which create con- trails and cirrus clouds. However, of all

emissions species, it is undoubtedly CO2 that has the longest ‘latency’ in the atmosphere and its effect can be present over several decades. Taking into account the relative contributions of all emissions and the uncertainties of these effects, the latest estimates show that hydrogen combustion could reduce climate impact in flight by 50 to 75 percent, and fuel-cell propulsion by 75 to 90 percent. The Clean Sky 2 Joint Undertaking, in collaboration with the FCH 2 Joint Under- taking, recently assessed the full potential

of hydrogen (H2) propulsion to reduce aviation’s climate impact through a study performed by McKinsey & Co. under a tender awarded in 2019 and concluded last year Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 47

(https://www.cleansky.eu/publication/ In terms of fleet share and flight ranges, their commercialisation can take more than hydrogen-powered-aviation). almost 80 percent of emissions come from 10 years, and substantial fleet replacement The study concluded that hydrogen pro- flights up to 7,000 kilometres and cover 95 another 10-20 years. To transition to a new pulsion has the potential to be a major part percent of the total number of flights. Flights propulsion technology, a sector roadmap to of the future propulsion technology mix with spanning less than 3,000 kilometres and reduce climate impact, a step-up in Research the potential to make climate-neutral aviation independent from the aircraft size account for & Innovation (R&I) activity and funding, and a by 2050 a reality. However, as a highly dis- more than 50 percent of today’s total aviation long-term policy framework will be required. ruptive innovation, it will require significant CO2 emissions. The main focus of decar- The sector roadmap needs to set the research and development, investments, and bonising aviation should be on short-range ambition level, align standards, derive safety accompanying regulation. It is a high risk but aircraft flying less than 3,000 kilometres, as measures, coordinate infrastructure build-up, high reward technology solution for a game- well as on medium-range aircraft up to 7,000 overcome market failures and encourage changing impact! kilometres. first movers. An appropriate mid-term target Indeed, several technological challenges While hydrogen is technically feasible could be the Entry-into-Service of a hydrogen- still need to be overcome: enhancing the for evolutionary (tube-and-wing) aircraft powered short-range aircraft before 2035, for overall efficiency of hydrogen storage operating flights above 10,000 kilometre which a first prototype would be required by on-board with lighter tanks and fuel cell range, it is likely to remain less suitable from 2028. systems, liquid hydrogen (LH2) distribution an economic perspective. As a consequence, In line with this ambition, the key stake- within the aircraft, turbines capable of although hydrogen could power short-range holders of the European aeronautical sector burning hydrogen with low-NOx emissions, aircraft with an entry into service as early as have proposed the hydrogen roadmap as and the development of fast, safe, reliable 2035, low- (net) carbon liquid fuels are likely one of the three main R&I streams of the and efficient refuelling technologies with to be the more cost-effective decarbonisation Strategic Research and Innovation Agenda flow rates comparable to kerosene so that solution for the long-range market segment for the next European Partnership on Clean aircraft turnaround times at airports remain for a considerable time. But even in the case Aviation (https://www.clean-aviation.eu/files/ competitive. of synthetic liquid fuels such as ‘Power-to- Clean_Aviation_SRIA_16072020.pdf). Assuming these technical challenges can be Liquid’ kerosene, hydrogen will be required In summary, hydrogen propulsion has sig- overcome, hydrogen-based propulsion can be as one of the basic constituents for synfuel nificant potential to reduce the climate impact a significant enabler in the quest for ‘climate- production. of aviation, thus contributing significantly to neutral aviation’ by 2050. But the challenges Feasibility and economic analyses show achieve the Green Deal’s objective of Europe’s and the intrinsic qualities of hydrogen versus hydrogen can be a major part of aviation’s climate neutrality by 2050. New technologies liquid fuels such as kerosene, in particular the future technology mix. If hydrogen-powered must be deployed across the board and R&I energy density in volumetric terms, mean aircraft are deployed in segments where they must be urgently accelerated before we can that it is likely to be best suited for commuter, are the most cost-efficient means of decar- transition the aviation sector and the industry regional, short-range, and medium-range bonisation, they could account for 40 percent into a more efficient and decarbonised future. aircraft. of all aircraft by 2050, with this share further For commuter and small regional aircraft, increasing after 2050. fuel cell-powered propulsion emerges as the To make this a reality, bold steps need to For more information about most energy-efficient, climate-friendly, and be taken urgently to initiate a path towards Clean Sky’s innovative technologies promising option. For short-range aircraft, a decarbonisation of the air transport sector currently under development, hybrid propulsion approach (H2 combustion through hydrogen. The industry needs to visit our online stand at and fuel cell) could be best suited, or simply change trajectory today, as the development https://cleansky.virtualfair.be

H2 combustion in advanced aero-engines. phase and certification of new aircraft prior to 48 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen – the Great Unifier? ©AFP_01

BERTRAND PICCARD President of the Solar Impulse Foundation

or several months now, the pro- and Energy efficiency must go hand in hand with efficiency is much more suitable than the anti-hydrogen lobbies have been the electrification of society. The key factor fuel cell, which is half as efficient. We might F waging a merciless battle in the that enabled Solar Impulse to fly 43,000 km therefore imagine using light battery- media. It’s a miraculous solution for some, an around the Earth on solar power was that powered vehicles for short journeys, and enormous hoax cooked up by the oil giants energy efficiency was at the heart of our heavy hydrogen-powered vehicles for long for others. In this debate, the losers are the approach. distances, where large batteries would be too general public, unable to form an opinion, and The great advantage of hydrogen is that it polluting to build and too heavy to transport. humanity at large, desperately in need of a can store renewable forms of energy, thereby This could bring advantages in terms of range substitute for fossil fuels. solving the problem of their intermittency. and refuelling speed, and it would also apply Hydrogen is not something you can be “pro” Hydrogen is produced when there is surplus to the maritime and aviation sectors. or “anti”. It’s an element. Hydrogen atoms can electricity; this power can then be released As for the distribution network, the “chicken do some things, but not others. In the many later, whenever we need it. The yield hasn’t and egg” dilemma can be solved by building battles that oppose detractors and supporters yet been optimised, but any amount is better the entire “henhouse” at a stroke, without of hydrogen, probably the biggest one is in the than just wasting that renewable energy. waiting for subsidies. In Switzerland, private mobility sector. Rather than opposing each There’s general agreement on the use- partnerships have brought all involved sectors other, we must understand the potential and fulness of hydrogen in industry, in combi- together, with Hyundai supplying 1,000 trucks, the limitations of this technology. nation with nitrogen for the production of the Migros and Coop supermarkets putting Since hydrogen doesn’t exist on Earth in fertilizers and in blast furnaces to produce them into service, and the Avia, Agrola and its basic state, it has to be manufactured steel; but the debate gets bogged down when Tamoil service stations supplying them with from other elements. This process consumes it comes to mobility. hydrogen. As this is produced with hydro- energy, whereas oil can be found ready-made There are two applications here: hydrogen electricity, the same price per kilometer as in nature. Today almost all hydrogen is so- can be transformed into electricity by a fuel for diesel is guaranteed. A similar kind of called “grey” hydrogen, because it is produced cell and so power an electric motor, or it can system has also been put in place in Paris by from methane, a process that’s inexpensive be used as fuel in a combustion engine. Each Air Liquide, a hydrogen supplier, and the Hype

but generates CO2. option has advantages and disadvantages. taxi company. Hopes are focused on electrolysis, which A fuel cell emits only water vapor - so no All this proves that, whereas batteries

uses an electric current to break down water CO2 or NOx (nitrogen oxide). Its efficiency (the frighten the oil industry, hydrogen would into hydrogen and oxygen. If the electricity ratio between energy restored and energy allow it to diversify more easily, by retaining comes from a renewable source, the hydrogen supplied) peaks at 45 to 60%, which is much part of its infrastructure and ensuring the that’s generated is clean. This method is still more than the 25 to 30% of a gasoline engine survival of millions of jobs - a fundamental more expensive than reforming methane, but The combustion engine is viewed as the advantage. economies of scale and the falling cost of culprit for pollution, whereas in fact it is the renewable electricity should make hydrogen fuel used that creates this pollution. Today *In collaboration with Antonio Delfino, Head produced this way competitive within ten such engines burn gasoline or diesel, and this of Physics and Chemistry Department, Michelin

years. Even today, in Switzerland, clean emits CO2 and NOx: But they could very well Research and Technology, Switzerland

hydrogen, if untaxed, works out at the same burn hydrogen, with zero CO2. Since the power price as taxed diesel when a barrel of oil costs capacity of hydrogen is three times that $60. of gasoline, an internal combustion engine But can enough renewable electricity be optimized for hydrogen would be 45 to 50 produced for all the “green” hydrogen we’ll percent efficient at its optimum RPM, almost need? We can solve this problem if capacity double what can be achieved with gasoline. continues to increase - the EU wants to While consensus is emerging on the need to multiply the capacity of its electrolysers by replace gasoline and diesel engines, opinions 40 by 2030. And especially if the incredible differ on whether to use batteries or hydrogen. waste of energy in all sectors is reduced. For some, the battery and its “almost 100%” Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 49 Green Hydrogen for a carbon neutral transport sector

ISMAIL ERTUG MEP (S&D, Germany), Member of TRAN & ITRE Committees, European Parliament

reen hydrogen is indispensable for a hydrogen-refuelling stations as well as so possible, and hydrogen is the hinge to achieve decarbonised economy. With the EU called mega chargers for battery electric this. G converging to a minimum reduction trucks. The upcoming revision of the ‘Alter- of its GHG-emissions of 55 % – and possibly native Fuels Infrastructure Directive’ is a Finally, hydrogen is also the most viable more – compared to 1990 by 2030, hydrogen key element in this regard. Back in 2013, option to decarbonise the shipping industry. will play a major role in the decarbonisation the European Commission intended to have We still see a lot of potential to make current of various sectors. Especially in the transport binding targets for public charging points combustion engines work more efficiently, or sector, green hydrogen will be pivotal in for cars. The Council watered down this use other means to increase energy efficiency making our mobility carbon neutral by 2050. proposal. We are still suffering from the con- for the transport of goods on the water. In the sequences of this shortsightedness, because mid- to long-term future however, hydrogen To begin with, I would like to point out that it has seriously hampered the uptake of zero- should be used in fuel cells. For longer trips, hydrogen, in the long-term, can only be a emissions vehicles all over Europe. In addition, we will need it as a basis for ammonia. viable substitute for fossil fuels if it is solely it might have made the transformation more Ammonia has a higher energy density and is produced by using renewable electricity. For difficult and costly. Hence, it is of crucial thus very well suited to propel the fuel cells this, we may use renewable electricity, such importance that we do not make the same of future container ships. In this regard, the as windfarms, that is genuinely build up for mistake for heavy-duty vehicles. We need Commission will present a proposal for its producing green or clean hydrogen and does binding European-wide targets for an alter- ‘FuelEU Maritime initiative’ soon. not decrease the overall renewable share, or native fuel infrastructure, particularly along once we have a system wide surplus in our the core TEN-T network. The future of mobility needs vast amounts European energy system we may use it to of clean-hydrogen. Kick-starting the European transform the excess electricity into green Regarding aviation, hydrogen has a hydrogen industry will thus be one of the hydrogen. In any case, from today’s per- twofold significance. For example, Airbus most important projects in the current leg- spective, we will additionally need hydrogen has announced its intention to develop a islative turn. Together with the successful imported from countries where renewable hydrogen-powered plane by 2035, and the ramp up of the European battery-cell pro- energies, especially solar energy, are Commission has shown great support for this duction, this could be a crucial change in produced in an easy and cost efficient way. initiative in its ‘Sustainable and Smart Mobility Europe’s industrial policy approach: from a Strategy’, which was published only a couple lengthy period of deindustrialisation towards Hydrogen is being used directly, i.e. in fuel of weeks ago. At the same time, hydrogen reindustrialisation. cells, but it will also be the basis for many is the basis for synthetic kerosene. Notwith- e-fuels that can be used in ordinary internal standing the possibilities a hydrogen-powered combustion engines – and, for several plane might have – in the near future, internal transport modes, this option will be the only combustion engines will still mostly power realistic one in the medium term. planes, since directly electrified planes do not seem to be a viable commercial option In road transport, hydrogen is still one of in the next decades. Furthermore, planes are the most promising solutions to achieve on average 11 years old and it is common that zero emissions in the heavy-duty vehicles they remain in service for 24, 25 or even 30 segment; this is especially true for long-haul years. This means that the planes put into transport. According to numbers from the service today will still be traveling the skies in industry, we can estimate around 5,000 - 2050 which, in turn, is the year when Europe 10,000 fuel cell powered trucks on European has pledged to be the first carbon neutral roads by 2025. By 2030, this number could continent in the world. The ‘ReFuelEU Aviation climb up to 100,000. A crucial element to initiative’ the Commission has promised to put support this uptake of zero-emission trucks forward this year is therefore key to achieve is infrastructure, which means that we need a carbon-neutral aviation sector as soon as 50 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe When hydrogen partners with electrons: clean heating for all

MAXIMILIAN VIESSMANN Co-CEO Viessmann Group and CEO Viessmann Climate Solutions

We want everyone in Europe to have a to abate. The heating sector is ready to are replaced per year. The current energy home they can light, heat, or cool without process hydrogen admixtures up to 10% renovation rate of buildings, incl. investments “ breaking the bank or breaking the planet,” right away, and new appliances can pro- in the envelope and equipment, leads on said Frans Timmermans when presenting the cess up to 20%. average to a reduction of the energy con- Renovation Wave in October 20201. › Blending in the early phase of the ramp sumption of the building stock by only 1% per up of the hydrogen economy provides a year. In many regions qualified professionals As CEO of a 104 year old company in stable demand and scale, hence security are scarce. climate solutions, I am convinced that this for investments. dream is feasible. We can make it. And we › Making new heating equipment hydrogen- It is clear. We need to do more, we need the will - with a mix of decarbonised electricity ready for later changes in the gas mix is buy-in of people, we need speed and we need and decarbonised heating fuels, including feasible. It is a no-regret. a long-term systemic view. hydrogen. Electrons and molecules together are the winning tandem. Success depends on Emissions of buildings are hard to abate. Hydrogen-readiness is a no-regret. In our ability to get both people on board and to 450 mln EU citizens have to buy in. Think Europe, 64% of heating installations are old optimize the whole energy system; a narrow about it: the building stock is highly diverse, and inefficient3. If they had an energy label, it focus on sectors or heating technologies in so are individual needs, preferences and would indicate class C, D or lower. At the same isolation is a cul-de-sac. financing capabilities - from Helsinki to time almost 7% of Europeans cannot afford › The benefit of hydrogen in heating is Athens. 40% of the building stock was built to sufficiently heat their homes. High upfront threefold: 1) optimized use of gas net- over 60 years ago. Deep renovations, that works and storages for demand peaks in reduce energy consumption by at least 60%, 3 64% of the 104 million heaters installed in the winter; 2) optimized electricity demand are carried out only in 0.2% of buildings EU-27 in 2017 (without the UK) / 57% if the 129 and “dimensioning” of dispatchable gen- per year and only 4% of heating systems million stock of EU-28 is considered (with the UK). eration and infrastructure capacities; 3) optimized and flexible investment pathways for individualized building decarbonization. › Every 5 mln heat pumps add roughly some 15 GW peak load to be provided reliably by the electricity system in winter - in addition to the growing fleet of e-vehicles. › The price tag for energy system decarbonization is significantly lower with hydrogen in heating: for Germany alone, including hydrogen for heating in buildings lowers the system cost by 11 bln EUR2 each year, until 2050. › The individual needs of 450 mln citizens and the heterogeneity of buildings across the EU make emissions of buildings hard

1 Frans Timmermans, Executive Vice-President for the European Green Deal. 2 German Energy Agency, www.dena.de/en/ integrated-energy-transition Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 51

cost for renewables based heating systems, electrification of heating with heat pumps; Studies with an energy system perspective4 split-incentives, and lack of long-term iii) greening of heating fuels incl. hydrogen. conclude that a mix of heat pumps and com- planning are amongst the reasons for slow Hydrogen is an enabler of electrification, bustion heating with decarbonized gases is heat generator replacement rates. Today, the because it is a seasonal storage for renewable more cost-effective than “electricity only”. urgency for modernising the installed stock electricity, complementing biomethane with The energy system cost-savings stemming of heating systems coincides with innovative regionally varying potential. from well-dosed volumes of decarbonized technologies already on the market or in the combustion outweigh the superior “factor making. Looking at Germany, about 90% of installed six” efficiency of heat pumps taken “in iso- heating systems are based on gas or oil. For a lation” - calculated over the heating season, The equipment is ready. Each boiler, small- part of it - for example a single family house and considering processes for producing and scale combined heat & power installation and built for 30 years or more recently - heat transporting hydrogen. heat pump/boiler hybrid will be capable of pumps can often be installed right away. For running on methane, or methane-hydrogen another part - e.g. old buildings or multifamily In EU-275 in 2018 about 20% of electricity blend, or pure hydrogen. “Hydrogen ready” houses with individual gas heating - decarbon- production was from coal, and 25% from boilers are an affordable future-proof retrofit ization is more difficult. Options include “deep nuclear, often built decades ago. This fleet solution: initially they process methane renovation”, or a switch to a decarbonized is currently often delivering the bulk of or methane-hydrogen blends. If the gas heating fuel, or a staged renovation approach electricity supply, especially during winter supplier switches to pure hydrogen, they combining decarbonized fuels with gradual days without wind and sun. Germany, for can be adapted with minor changes on-site. investments into the envelope. Leaving example, has to compensate for about A no-regret for customers, without lock-in nobody behind, without risking citizens’ 36 GW of installed “conventional” generation effects for fossil fuels. A priority is to make support for the energy transition means: we capacity due to the coal and nuclear phase sure that the Green Deal synchronizes the need all of these options. out. On the other hand, every five million heat replacing of fossil gas with the market pumps will - with conservative assumptions uptake of future-ready equipment. Our sector Hydrogen in buildings contributes to - increase peak demand by about 12 to 25 GW, supports ecodesign rules requiring all new system efficiency and energy security. in addition to the demand from the growing heaters being hydrogen-ready, with an appro- Energy demand for heating shows high fleet of e-vehicles - with every ten million priate transition period that allows makers to seasonal variations. Peak demands in winter vehicles estimated to add about 5 GW6. The convert their portfolios in time. often coincide with low electricity generation numbers speak for themselves: Decarbonised from renewables. In central Europe, the gases delivered via existing refurbished gas Hydrogen opens new options for people, monthly average load in the coldest month infrastructures support energy system reli- on the road to climate neutral buildings. in the gas sector is about a factor of 3 of the ability and resilience, with optimized costs. The trajectory is known: By 2030 we reduce load in the warmest month. For the electricity emissions in buildings by 60% compared to load, this factor currently is only 1.2. The more Hydrogen in buildings, via blending, can 1990 levels and by 2050 we reach climate electricity we use for heating, the more grid also facilitate the ramp up of the hydrogen neutrality. The building sector is vastly het- reinforcement, installed capacities and dis- economy in its early phase. The current erogeneous, a one-size fits all approach is patchable back-up plants we need to deliver natural gas infrastructure and space heating neither efficient nor realistic. enough electricity at any time and ensure stock can already safely process up to 10 resource adequacy - that is secure electricity volume percent of hydrogen admixture. If To get on track, we need a toolbox of supply also when demand is high, and pro- needed, the heating sector provides a stable measures targeting i) acceleration of duction of renewable electricity is low; also demand for decarbonized hydrogen - and renovation, in envelope and equipment; ii) after the coal exit. hence security for ramping up investments into the hydrogen value chain, speeding up the learning curve to the benefit of all sectors.

This is how electrons and hydrogen can reinforce each other on the road to decarbonization. This is how we ensure that everyone in Europe has “a home they can light, heat, or cool without breaking the bank or breaking the planet”. With a strong commitment and fast deployment of readily available heating technologies, we can ensure that the energy transition generates benefits to people, the environment, and our economy.

4 E.g. dena Leitstudie Integrierte Energiewende; Gas for climate study by Navigant 5 EU energy in figures,https://ec.europa.eu/energy/ data-analysis/energy-statistical-pocketbook_en 6 Assuming that 5% of the fleet are charging with 11 kW 52 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen blending standards: is harmonisation

ALBERTO ANDRIS PIEBALGS needed? POTOTSCHNIG Florence School of Florence School of Regulation Regulation - Robert Robert Schuman Centre Schuman Centre for for Advanced Studies at Advanced Studies at the European University the European University Institute Institute

ydrogen is one of the main pillars – It is clear that the blending strategy, while Therefore, the question arises of whether and together with increased electrification already contributing to the reduction of carbon to what extent this transitional role should be H - of the EU decarbonisation strategy dioxide emissions, can only have a transitional governed by blending standards and whether to achieve carbon neutrality by 2050. Cur- role, since full decarbonisation of the EU they should be harmonised across Europe. rently, hydrogen use, mainly as a feedstock, economy requires a much greater penetration is confined to local industrial clusters, but it of hydrogen in the EU energy mix than what Blending of minor shares of hydrogen is envisaged that it will also become a main could be accommodated through blending. into natural gas does not create particular energy vector transporting energy over longer distances across Europe and storing Limits on hydrogen blending in natural gas networks, 2018 it over longer periods of time than it is economically feasible with electricity. Hydrogen is therefore a key component of the energy system integration strategy outlined by the European Commission in July 2020 and, to mark this, a specific hydrogen strategy was released at the same time.

The transition from the role of hydrogen as a feedstock in local clusters to a major energy carrier across the EU will require not only the development of hydrogen infrastructure, but also an appropriate regulatory framework, including in terms of standardisation. This is in fact likely to be the only area in which the current regulatory framework for natural gas could not fully be taken as an inspiration for the approach to hydrogen.

Standardisation will have to cover several aspects, including quality and safety. Here we focus on a specific aspect, which relates to the way in which hydrogen, as an energy carrier, could be transported in pipelines across Europe.

* Higher limit for Germany applies if there are no CNG filling stations connected to the network; In essence, two approaches might be con- higher limit for the Netherlands applies to high-calorific gas; higher limit for Lithuania applies sidered: blending hydrogen with natural gas when pipeline pressure is greater than 16 bar pressure. Sources: Dolci et al. (2019), “Incentives and legal barriers for Power-to-Hydrogen pathways: An and transporting the resulting mixture using international snapshot”, International Journal of Hydrogen; HyLaw (n.d.), Online Database; Staffell the current gas network or transporting et al. (2019) “The role of hydrogen and fuel cells in the global energy system”, Energy and Environ- hydrogen as such in a dedicated separate mental Science. Chart taken from the International Energy Agency website at Limits on hydrogen network, part of which might be provided by blending in natural gas networks, 2018 – Charts – Data & Statistics - IEA refitted existing infrastructure. Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 53

technical problems in the transportation and commercial installations, as well as in and usage of the resulting mixture, although household appliances and any associated some safety considerations might emerge costs. Of great importance in this assessment given that the combustion characteristics of is also the extent to which these interventions hydrogen greatly differ from those of natural and costs could end up being stranded once, gas. At present, different Member States in in the future, hydrogen as such will become Europe – and other jurisdictions around the the main molecular energy carrier. world - impose different limits on hydrogen blending in natural gas networks. Moreover, given that increasing the share of hydrogen in the blended mixture reduces As it can be seen from the chart, among its calorific value, standards should also be those EU Member States in which blending developed for the valuation of gas mixtures is permitted, the highest limits apply in with different shares of hydrogen. Germany (10%, but only if no compressed natural gas filling station is connected to Finally, strong coordination will be required the network, otherwise the limit is 2%), in in the planning of the transition from the France (6%), in Spain (5%) and in Austria initial phase based on blending to a sus- (4%). However, many jurisdictions do not tainable future based on the use of hydrogen (yet) allow hydrogen blending into the natural as such as an energy carrier. At that point, gas network. It is clear that, if blending is two types of molecular energy vectors will accepted as a transitional arrangement to be coexisting: hydrogen and renewable gases facilitate the development of the hydrogen (biogas, biomethane and synthetic natural sector, at least in its initial stages, the gas). They will be competing for the use of seamless functioning of the internal energy existing pipeline networks (and, possibly, for market requires that harmonised standards any expansion). However, they will no longer be introduced for the maximum admissible be mixed, so coordination will be required, at hydrogen share. In choosing the level of such EU level, on which infrastructure will be used a limit, account should be taken of the need by each of the two types of molecular vectors and the costs of refitting the transmission and in order to avoid the stranding of assets and distribution networks, the potential for using higher costs for European energy consumers. the resulting mixture in end-user industrial 54 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Clean Hydrogen as A Major Enabler for Making Carbon-Free Ammonia and Fertilizers DR ANTOINE HOXHA Technical Director, Fertilizers Europe

“As one of the biggest producers and about 1.1% of annual carbon emissions due › In Spain, Iberdrola together with the ferti- users of hydrogen Europe, fertilizer pro- to using fossil energy as feedstock (approxi- lizer producer Fertiberia are behind a producers have all it takes to be frontrunners mately 80% of production uses natural gas, ject coming on-stream next year where in scaling up the production of renewable while coal accounts for approximately 15%). solar panels will produce energy for a hydrogen. Going beyond fertilizers, low- By making a business case for low- 20 MW electrolyser. This electrolyser carbon ammonia could be the fuel of the carbon ammonia, we will at the same time will produce some 5 % or the hydrogen future for maritime shipping and a viable help decarbonize food production and take needed for ammonia production in the energy storage solution”. a big step towards a hydrogen economy. fertilizer plant. By 2027, it plans to install By 2050, under the right conditions, 800 MW of green hydrogen production The nitrogen fertilizer industry is main ammonia production could be based on capacity. hydrogen producer decarbonised sources of energy, using With a share of about 50%, the ammonia alternatives sources of hydrogen and elec- › In the Netherlands, a project has been industry is today the biggest producer and trolysis based on renewable energy. announced where Orsted will build a user of hydrogen in Europe. Unlike hydrogen, 100 MW electrolyser based on wind ammonia is already being produced and Moving forward energy to deliver hydrogen to Yara fer- transported worldwide in huge quantities Several big ammonia producers have tilizer plant. These 100 MW can produce (180 million tonnes annually are produced announced projects to make hydrogen from 10 % of the hydrogen needed to run one and 18 million tonnes are transported) as water using renewable energy. Here are few of the two ammonia units of the plant. it is the basis of many chemicals and very examples: importantly the starting phase for producing fertilizers (80% of the demand).

Today, the hydrogen for making ammonia is obtained by cracking at high pressures and temperatures the natural gas with the help of steam. This splitting process (steam methane reforming, SMR) generates significant quantities of CO₂.

A low-carbon route involves underground storage of at least part of this CO and gives what is commonly called blue ammonia (SMR + carbon capture and storage, CCS). Alternatively, when ammonia is produced from green electricity and water via electrolysis, or other sources of low carbon hydrogen, the process requires only air.

Green ammonia and low carbon food in 2050? The world is today completely reliant on ammonia. Indeed, ammonia as a key component of mineral fertilizers contributes to half of the world’s food production. Globally, Figure: Green ammonia and low carbon fertilizer production in 2050 the fertilizer industry is responsible for Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 55

› In Norway, Yara recently announced plans the energy density of compressed hydrogen, long-term storage of electricity as chemical to electrify its ammonia plant, thereby and nine times that of Li-ion batteries, making energy. As such it can be used in buffering a potentially removing 800,000 tonnes of it very attractive as a potential carbon-free renewables-based electricity system by trans-

CO2 per year, provided the required public energy carrier. Therefore, when hydrogen is forming electricity into hydrogen/ammonia co-funding and regulatory framework are needed, in many applications it makes more when renewable energy is abundant and in place. economical sense to transform, transport and cheap and burned to produce electricity when use it in the form of ammonia. needed. › Lately, the biggest ammonia producer Big scale projects have been announced in the US, CF Industries and the Asian Beyond fertilisers – decarbonising other in Saudi Arabia and Australia where energy Renewable Energy Hub and Fortescue sectors from solar panels will be transformed into Metals Group in Australia, amongst In practice, ammonia is the only carbon ammonia via electrolysers, and this ammonia others, have also announced plans free fuel. As such, it brings the promise to will then be used to transport the energy to develop ammonia based on green decarbonise the maritime shipping sector around the world. hydrogen. reducing its emissions by 95% by 2035 and the demand could reach about 1 million tons The challenges ahead Ammonia – the workhorse of the ammonia per day (reference Lloyd’s Register In the EU, the fertilizer sector produces hydrogen economy Vessels 2030, how do we get there?). and consumes 3,1 million tonnes of hydrogen Although it might seem a paradox, and is best placed to help upscale new tech- ammonia is a better hydrogen carrier than Indeed, with limited modifications and nology in the most cost-effective way. Bal- hydrogen itself. Storing and transporting technology improvements ammonia could ancing EU’s climate ambitions with industrial hydrogen is a challenge as it is the smallest be directly used in combustion engines of competitiveness will be key to a successful and lightest molecule in nature and it liquifies deep-sea vessels. Global ammonia trans- implementation of this strategy. However, only at the extremely low temperature of – portation and storage infrastructure already several barriers remain to gradually switch 253 degrees Celsius. Ammonia on the other exists with a presence in 120 seaports production from current SMR based hydrogen hand, liquifies at -33 degrees Celsius and can globally. towards low-carbon routes. be handled better, similarly to liquified natural Abundant and competitively priced clean gas. Storing hydrogen under pressure is also The ammonia molecule is also probably electricity to produce hydrogen is a pre- possible but again, ammonia has three times one of the best alternatives for the mid/ condition for green ammonia to become competitive and challenge the current production technology. Furthermore, as fertilizer plants with ammonia production are scattered all over Europe electricity and/or hydrogen transport infrastructure is a required for a balanced development. The next challenge is making the business case. Today ammonia production based on green or low-carbon hydrogen cannot compete with production based on natural gas. Public support for investment and operational cost is necessary now to get the ball rolling. It also includes considering schemes such as the Carbon Border Adjustment Mechanism to help maintain a level playing field and prevent green ammonia being Figure 2 Ammonia as the most cost-effective energy carrier outcompeted by cheaper imported grey ammonia. With such measures in place, European fertilizer producers should gain the confidence and the economic room to invest in new technologies. The third challenge is creating markets that reward low-carbon ammonia. In the future there will be at least two major markets for ammonia: fuel for deep-sea shipping and for nitrogen fertilizers. We need to define and create certification schemes for green and low carbon ammonia and by extension fertilizers, so that farmers can make this a premium selling point the food chain. Cooperation of all stakeholders is required, including the EU, Member States and regional authorities in supporting industries in rolling out new technologies, for example by pro- Figure 3 Beyond fertilizers, creation of the market for green ammonia viding financial incentives and partaking in development of regional hydrogen resources. 56 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Unlocking the Green Hydrogen Economy through Business Model Innovation DIEGO PAVIA CEO of EIT InnoEnergy

an business model innovation make a combined with carbon capture, “grey” from and indirect jobs across the green hydrogen substantial difference for the uptake natural gas, “brown” from coal) and on the value-chain. C of the green hydrogen economy? price of the molecule, making it difficult for As an industry-led initiative, the EGHAC When hydrogen is a promising way to decar- a profitable business case to emerge in the strives to be a key actor in Europe’s green bonise an industry, and when partnerships short term. hydrogen ecosystem and works collabora- throughout a value-chain result in a CO2-free tively alongside existing efforts in this space end-product which incorporates a neg- Therefore, the EGHAC, while capitalising to achieve Europe’s vision. The industrial ligible premium, then the price of the green on the lessons learnt from the battery value- projects supported by EGHAC span across a hydrogen molecule becomes irrelevant for chain, treads a new path. It is with this in variety of value-chains with energy intensive the business case. Fostering investments mind that, in November 2020, EIT InnoEnergy applications, such as heavy industry (for and accelerating such type of industrial launched the EGHAC that applies a value instance the steel industry, which emitted projects is what EIT InnoEnergy aims at with chain approach and focuses on the cost of 203MtCO2e in 2019, making it the largest CO2 the European Green Hydrogen Acceleration the end product (i.e. the steel, the cement, emitting industry the European Union, repre- Centre (EGHAC) launched in November 2020, the vegetables grown with fertilizers, the senting about 5% of its overall emissions), and supported by Breakthrough Energy. fuels for heavy transport, ...) using green heavy transport and feedstock for chemical hydrogen in evolved innovative industrial process and fertilisers. The initiative is sup- Fostering Investments and Industrial processes. EGHAC promises to accelerate the ported by Breakthrough Energy, a network of Projects with the European Green green hydrogen economy and help achieve philanthropic programs, investment vehicles, Hydrogen Acceleration Centre climate neutrality by targeting 1200TWh of and policy advocacy efforts that offer a In 2017, the European Commission final energy use based on green hydrogen comprehensive, end-to-end approach to entrusted EIT InnoEnergy to steer the by 2025, which represent investments north accelerating the clean energy transition and European Battery Alliance (EBA). With over of €100 billion across the affected value- helping the world reach net-zero emissions 500 industrial actors, research centers and chains. This will result in half a million direct by 2050. investors across the entire battery value chain, from the ethical sourcing of raw materials to recycling and re-use, EBA supports Europe in 1 becoming a battery industry hotspot. In 2019, investment in Europe across the whole value- EIT InnoEnergy has invested in 10+ green hydrogen chain reached over €60 billion (more than Renewable Energy 30+ InnoEnergy assets related innovations across the value chain in recent three times as much as in China), aiming to years, in different stages of maturity. reach an annual market value of €250 billion from 2025 onwards, which represents around HySiLabs 3-4M direct and indirect jobs. This initiative Hymeth is now a blueprint for the development of A sample of InnoEnergy’s portfolio : industrial value chains in Europe. EIT InnoEnergy believes in the potential Hymeth: Electromagnetic electrolysis (2022) of green hydrogen to decarbonise Europe’s Hysilabs: Transport dissolved in liquid (2025) (and the world’s) economy and to achieve the Atawey: H2 infrastructure for mobility (2017) Sylfen: Long term storage for (residential) buildings Union’s climate-neutrality ambition. It quickly (2018) appeared, however, that the model of EBA HPS: Home Heat & Power for premium segment could be used as a reference but could not (2018) Celcibus: Membranes for fuel cells (2022) be fully replicated. The hydrogen landscape Atawey HPS Green is today dominated by a debate on the pro- Celcibus Sylfen Steel duction process of hydrogen (i.e. “green” from A Sample of EIT InnoEnergy’s Portfolio of Assets in Green Hydrogen renewable electricity, “blue” from fossil fuel Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 57

Business Model Innovation to Square the Circle of Green Hydrogen

Competitiveness Green Steel The EGHAC, covering solely green Negligible Premium on the Car hydrogen, is stepping aside from a hydrogen production cost approach in order to boost the green hydrogen economy at the scale and speed required to achieve climate- neutrality. Instead, the EGHAC supports and develops projects which pursue a value-chain approach and offer CO free end-products on 2 Consumer-Driven Demand the market, at a negligible premium price, in key high-emitting economic sectors. In the traditional approach, the multiplication of EIT InnoEnergy’s Value-Chain Approach Applied to Steel & Car bilateral agreements along the value-chain, Manufacturing whereby each party needs to optimise its margin in each individual transaction, leads 3 to uncertainties, additional risks, and suboptimal economic outcomes. There, the price of the green hydrogen molecule may be a show-stopper. A value-chain approach, on the contrary, is about companies partnering in one industrial venture. The profitability of this new venture becomes the main target and the competitiveness of the CO2-free end-product is the dominant factor This business model innovation creates a successful business case, offering a “think outside the box” solution to the decarbonisation of critical sectors, notably steel (e.g. for car manufacturing where steel currently represents 10% of the lifetime CO2 EIT InnoEnergy’s Vision to Accelerate the Green Hydrogen Economy emissions of a car and is expected to reach 30% by 2040, or for windmill towers) or for vegetables using fertilisers.

This business model offers three major strong international competition and reduced Since its launch in 2010, EIT InnoEnergy has benefits: margins. The steel industry is one of those. invested €560 million in sustainable energy First, it provides an industrial response to In this area for instance, EIT InnoEnergy is innovations, and for each Euro invested the demand by the consumer for sustainable, supporting the effort of industrial players we have leveraged 6 Euros additional. EIT “made in Europe” products. The demand united behind the objective of manufacturing InnoEnergy is supported by the European drives the project rather than the offer of competitive green steel in Europe, which will Institute of Innovation and Technology (EIT). green hydrogen generation capacity. Building be publicly disclosed before Easter. This will on a solid understanding of the customer, and demonstrate that scale and an innovative their willingness to pay a small premium for value chain approach delivers competitive

CO2 free products, it allows the consortium CO2-free steel. to accompany the changes in their customer base. For instance, looking at fertilisers, Lastly, it is the replicability of the model. the demand for greener food and for more The EGHAC fosters the replication of such transparency in the carbon footprint of food projects. The experience gained on the first products boosts the case for green fertilisers, projects will bring speed and scale at many and therefore, for green hydrogen. Would any levels: attracting investors and partners, citizen pay a premium of 0,01c€ for a tomato emissions reduction, reshoring an industrial grown with CO2-free fertilizer? base in key sectors for Europe’s economic Second, it allows hard-to-decarbonise transition and resilience. The ambition of sectors to start a transition. With this the EGHAC is to use that model in all “hard business model, it becomes possible to to decarbonate” and “hard to directly electrify” launch a new green field manufacturing sectors, such as heavy road transport or capacity which acts as a disruptor and leads shipping. the transition of a sector towards long-term With this initiative, EIT InnoEnergy wishes carbon-neutral sustainability. For Europe’s to continue its efforts in accelerating industrial base and for its transition to a low- strategic value chains in order to maximise carbon economy, it is crucial to accelerate the industrial benefits of the transition to a the transition of sectors characterised by a climate-neutral economy. 58 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe EU Hydrogen at a crossroads: how to gear up?

DOMINIQUE RIQUET Vice-President of Renew Europe Co-chair of the intergroup on long-term & sustainable investments & Competitive European Industry

he Green Deal is a game changer. recent hydrogen strategy and the extensive to time a rediscovery of old technologies. Reaching climate neutrality by 2050 investment projected for the sector in some Similar to electric cars, hydrogen production T will require unprecedented efforts national recovery plans (7 billion euros for processes have been known for centuries and by all sectors and transport - accounting France; 9 billion euros for Germany) confirm yet, our cars, trains and aircraft are still not for a quarter of the Union’s greenhouse gas the new political momentum gathering fuelled by it. There are physical and economic emissions - is at the forefront. In its new behind for a hydrogen industry to emerge in reasons explaining why we have not collec- mobility strategy, the Commission considers Europe. tively privileged this energy carrier over time: that a 90% reduction in transport emissions its lack of competitiveness when compared is necessary, in spite of the fact the sector In these circumstances, can hydrogen with fossil fuels. Fossil fuels have been was still on growing emission trends... square the circle of zero emissions mobility abundant and accessible at low cost, while until the Covid crisis happened. The latter in Europe? If hydrogen has an indispensable having a high energy density. Still further, exposed our vulnerabilities and reminded role to play for reaching sustainable mobility, they are easily transportable and storable, us how much transport is the circularity we as policy makers should keep in mind especially oil. blood system of our European societies. that it is no panacea. Beyond zero tailpipe Being vital, the sector needs to find the right emissions, hydrogen is at a crossroads On the other hand, the production of balance between accompanying economic between crucial issues, such as energy, hydrogen alone requires expensive infra- growth while transforming itself to become industry, infrastructure, sovereignty even. If structures and substantial amounts of energy. climate-friendly, with tackling as top priority those interconnections are not well assessed, In order to have a low carbon footprint under its dependency on fossil fuels. they will threaten the potential of a European a life cycle analysis, the bill gets even higher hydrogen industry, with the risk of turning an for low-carbon hydrogen by electrolysis, due How? “Clean Hydrogen”, they say. Though old solution into a new problem. to its electro-intensive process. As such, using the energy itself has been known and used electricity directly will always remain a more for long, it is finally considered today by A strategic use of low carbon hydrogen valuable cost-beneficial alternative - for pas- EU institutions and Member States as a for EU mobility senger cars for instance - than using it first to credible alternative to fossil fuels for the In the transition towards sustainable produce green hydrogen. transport sector. More generally, the EU’s mobility, it is interesting to observe from time Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 59

Nevertheless, electrification is not always new resource, it is our European autonomy More generally, hydrogen appears here as achievable in transport, particularly for strategy as a whole which is strengthened. a case study of the divergences encountered heavy mobility. This is where we should However, due to their additional costs, a in the energy transition in Europe and concentrate our focus. If the added value strategic deployment of hydrogen is needed, questions the compatibility of the different of hydrogen for trucks, buses or dustbin with a precise mapping and careful selection European energy policies. Over the coming lorries still has to be improved, hydrogen of installations. Europe holds strong assets decades: the EU expects its electricity needs is simply indispensable to decarbonise in this regard. Our success will rely on our to drastically increase due to the electrifi- maritime and aviation in the long run. This capacity to establish key hydrogen valleys, cation of whole sectors and activities; it has achievement will be accelerated by con- such as inland and maritime ports, which announced a multiplication of production siderable research and innovation efforts, are already essential hubs for our energy of low-carbon hydrogen and it plans to which the EU must support further, espe- and industry supplies and offer a strategic face it thanks to the growing inclusion of cially for storage on board vessels and leverage for multi/shift-modality. intermittent renewable energy sources with aircrafts (as a reminder, four litters of liq- low load factors. Meanwhile, transmission uefied hydrogen equal one litter of oil). In An EU strategic production of low system operators are already raising the rail, hydrogen powered trains could be an carbon hydrogen alarm on rising risks of blackout today! In the alternative for passenger lines that would This being said, the core question to long run, can such a strategy be considered be too expensive to electrify. Unfortunately, appreciate the climatic and economic as credible? we can only deplore the budgetary cuts advantages of hydrogen remains the affecting these programmes in the new source of electricity used. As shown by the A geostrategic hydrogen: European MFF, hampering sufficient European - col taxonomy debates, this is where today’s autonomy at stake lective ambition for the task in hand. real challenge lies and where the European Though hydrogen is no panacea, it remains approach starts to erode. indispensable to decarbonise some economic An EU strategic deployment of low activities where there is no substitute, such carbon hydrogen Production by electrolysers consumes as heavy mobility for the transport sector. Hydrogen does not only face production huge amounts of electricity. The latter must To optimise its potential as an energy carrier, energy-efficiency difficulties. It is also a very then be produced with low-carbon power its limits must be realistically assessed, light gas. Infrastructure-wise, as the volumes capacities to be climate friendly and with free from ideological concerns. Beyond to be transported are much greater than high load factors to be competitive. Caught in any rainbow hydrogen classification, all with fossils, all existing gas pipelines cannot this vice, nuclear energy – the elephant in the options at our disposal must be considered be used as they currently are; in addition to room – appears then as the most valuable and appreciated under their life-cycle loses, security and lock-in effect concerns option at our disposal, and its exclusion from assessment, including nuclear sources. which may arise. Alternatively, transporting “clean hydrogen” classification, as a fallacy. As such, a targeted use paired with a hydrogen in liquefied form by boat, for Representing 70% of its electricity mix (for strategic deployment in Europe is necessary example, requires cooling it to -252°C, which how long though?), nuclear enables France to maximise its economic and climatic in turn consumes more energy and further to base its strategy on existing national elec- added-value. Nevertheless, due its structural degrades its competitiveness. tricity production and gives more room of lack of competitiveness, private and public manoeuvre to foster its industrial autonomy. investments must support innovation and In both cases, the less hydrogen travels, On another hand, Germany, by phasing out contribute to scale up the technological the more competitive and clean it will be. nuclear capacities and integrating more eco-system in order to lower the production Imports should therefore be avoided where intermittent renewable energies, orientates costs. Alongside public mechanisms (such possible. This is an encouraging aspect its strategy towards a higher recourse to as a carbon border adjustment mechanism which advocates in favour of the emergence imports. This approach might solve our ter- or higher CO2 prices), the emergence of a of a hydrogen industry on the European soil! ritorial emission reduction objective, but European sector and the rise of European Additionally, by not transferring our impor- it would leave our dependency on third champions will generate high-quality jobs and tation dependency from fossil fuels to a countries intact. position the EU as a global standard-setter and world-leading region for hydrogen.

This time, the Union cannot afford to miss the opportunity. For many, the loss of Europe’s industrial leadership on wind turbines or solar PVs remains vividly and painfully in mind. After having called for years to initiate a common strategic autonomy and put an end to a certain “European naivety”, the EU seems to be finally waking up. First and foremost, hydrogen is of geostrategic matter. If we, as Europeans, do not assure an autonomous European industry sector, which secures the full supply chain (including technologies, equipment, materials such as platinum for electrolysers…), we might fail to meet our climate objective and to resolve our long-term vulnerabilities. Time has come for the Union to gear-up!

STEPHEN QUEST Director-General Joint Research Centre, European Commission

hen it comes to tackling climate Bigger, more efficient and more durable trucks and hydrogen fuel cells to decarbonise change, we know that ‘business electrolysers – key for hydrogen long-distance road freight. Was usual’ is not an option. With the production European Green Deal, the European Commission Clean hydrogen means replacing carbon- Innovative ways to transport hydrogen has set out an ambitious plan to transform intensive production with renewable-powered The cost of production and transportation are Europe’s economy and make the continent water electrolysis. Our research suggests that key considerations in building an EU hydrogen climate neutral by 2050. this is a feasible goal: hydrogen production economy. Our research shows that transporting currently takes place in 82 EU regions, and 76 hydrogen can be more cost-effective than pro- To realise these ambitions, transforming our of these already have sufficient solar, wind and ducing it close to the point of use in many cases – energy system is a priority as it accounts for hydropower resources to fully decarbonise due to the varying costs of wind and solar power 75% of the EU’s greenhouse gas emissions. both electricity consumption and hydrogen across European regions. Hydrogen can be key to bringing this percentage production. Pipelines are the best option for transporting down – it does not emit CO2 or pollute the air when it is used. The potential for hydrogen in To make this a reality, the key innovation hydrogen within Europe, if existing natural gas Europe is huge: from shipping to clean fuel cells will be to make the electrolysers bigger, pipelines can be converted or new ones can be that can power steel manufacturing and other more efficient and more durable. The- Com built. In this respect, there is a pressing need to heavy industries. The timing is right, given recent mission is funding research in this area: a find innovative ways to convert the pipelines and recent European Green Deal call asked for pro- improve compressors. At the JRC, we are looking advances in underpinning technologies to boost posals to design a 100 megawatt electrolyser, into the possibility to test the reuse of different the use of hydrogen and the impetus of the compared to the 20 megawatts that are the types of natural gas pipelines for hydrogen Green Deal. state of the art today. transportation.

Until now, the amount of hydrogen used in Our research also finds that innovation is In the absence of pipelines, ‘packaging’ options the EU remains limited, while the greenhouse needed to develop technologies that are better for hydrogen shipping need to be designed and gas emissions involved in its production are high, suited than the current alkaline electrolysers to commercially scaled up. since it is largely produced using fossil fuels. operating intermittently and exploiting wind and The EU hydrogen strategy aims to decarbonise solar power, which produce different levels of Innovative and fit-for-purpose regulatory that production, setting a target to produce up energy at different times. framework to ten million tonnes of clean hydrogen by 2030, A successful EU hydrogen economy needs expanding its use in sectors where it can replace Innovation to boost demand for hydrogen an appropriate regulatory framework to create fossil fuels. To succeed, we need to innovate in For an EU hydrogen economy to develop, markets for clean hydrogen in industry and several areas and create a full hydrogen supply demand for hydrogen is crucial. And that transport, incentives to convert natural gas chain in Europe’s economy – from production, to demand depends on hydrogen technology being pipelines to hydrogen and methods to classify transportation and end use. advanced enough to make it a better option than consignments of hydrogen as clean. Renewable other fuels. energy legislation can be a reference point for As the Commission’s science and knowledge developing this framework, but new techniques service, the JRC develops and tests innovative At the JRC we investigate the performance will also be needed, for example to track the type technologies to produce, transport and use of fuel cell vehicles under laboratory and real of electricity used to make imported hydrogen. hydrogen, as well as new policies to foster an world driving conditions and are perfecting a tool The EU hydrogen strategy will help to build these EU hydrogen economy. We also recognise the to test that performance in different settings. regulations so that we enable the innovations importance of working together – we open our Upcoming projects include testing a racing car needed to make the most of hydrogen. facilities to collaborate with other scientists fuel cell propulsion system (collaborating with The JRC is supporting these efforts, providing doing innovative hydrogen research and con- a university) and a maritime one (collaborating scientific insights and evidence to help Europe tribute with our expertise to initiatives like the with a company). A forthcoming JRC report will grasp the opportunity to be a world leader in this European Clean Hydrogen Alliance . analyse the best option between battery electric new and exciting technology. Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 61 How can carbon-free hydrogen become more competitive?

CHRISTOPHE GRUDLER MEP (Renew Europe Group), Member of the ITRE Committee

ast December, 22 EU countries and the cost of renewable hydrogen varies between digital solutions can help us predict energy Norway announced their willingness €5 and €6. There are indeed major barriers to demand and manage energy supply, including Lto engage into a new IPCEI (Important the uptake of carbon-free hydrogen, especially the potential need for energy conversion, Project of Common European Interest) on due to an absence of appropriate regulatory storage or balancing of the system. These ideas hydrogen, highlighting the hopes that most of framework. are enshrined in the concept of energy system Europe has now placed in a technology that I foresee several paths in order to address integration, on which I am currently leading the was until recently very much perceived as a the lack of competitiveness of carbon-free work within the European Parliament as rap- niche. I strongly believe that hydrogen is indis- hydrogen. porteur on the Own-Initiative report exploring pensable for the EU to meet its environmental The production costs for carbon-free the matter. objectives, but also as a vector for job creation. hydrogen is linked to the renewable electricity The challenge is to make carbon-free hydrogen prices, the investment costs into electrolysers While production costs and supply uptake are more competitive, so that it can be deployed as and the operating hours. These costs must be essential, the competitiveness of carbon-free quickly as possible over Europe. This is one of significantly reduced, through the scaling up hydrogen also lies in the creation of the right my main objectives as Member of the European of the production and the improvement of the market conditions and incentives. Parliament. technologies’ efficiency. Several tried-and-tested instruments have the potential to create favourable market con- It is now widely accepted that we should Electrolysers currently have an efficiency ditions for this uptake. reduce the share of hydrogen produced range of 60 to 80%. Our research and innovation from natural gas, or “grey hydrogen”, which capacity will play a crucial part to improve these First, hydrogen being a new energy product today remains the main means of producing numbers. With the support of Member States, for European consumers, I believe that there is hydrogen. However, the debate gets more as well as the EU financial programmes such as a crucial need for transparency and information complex when it comes to the role of “blue” Horizon Europe programme, I am confident that on its production and emissions. Guarantees of hydrogen. Blue hydrogen refers to fossil-based we will be able to mass-produce more efficient origin and certifications haven proved to be the hydrogen combined with carbon capture electrolysers in the coming years. best methods to inform customers, as well as processes, which reduce overall life-cycle The cost of carbon-free hydrogen is also to guarantee fair competition within the market. emissions of the energy carrier. Blue hydrogen heavily reliant on the cost of electricity. The is expected to be a “bridge energy”, allowing competitiveness of this electricity depends Support schemes will also undeniably play

for a transition to “carbon-free” hydrogen. The partly on the cost of CO2 under the EU ETS, as a key role, if not the biggest role in the first latter includes renewable (or “green”) hydrogen, well as the dependence to national subsidies. years of commercialisation, to ensure that the which most often comes from electrolysis Nuclear electricity, however, represents a more price difference between fossil hydrogen and powered by renewable electricity. Additionally, affordable option, as it can provide electricity its greener alternatives is reasonable. Like for

carbon-free hydrogen (or called by some “low- at a competitive price to produce carbon-free renewable electricity, CO2 pricing, taxes and carbon hydrogen”) includes hydrogen produced hydrogen. levies weigh in heavily on final energy prices via electrolysis from nuclear energy. and customers’ decisions. Therefore, support When considering the most cost-efficient schemes should go hand in hand with fiscal Despite the huge potential of carbon-free ways to deploy hydrogen, an important element incentives for carbon-free hydrogen. hydrogen, it has not yet been widely deployed to consider is system flexibility. By focusing our in sectors which emissions are hard to abate attention on building new infrastructure or The EU is on the pathway to a real change of and would greatly benefit from this solution. investing in new infrastructure, we tend to forget paradigm in its energy policy. From the presen- In fact, if we take the production of renewable that the core principle of “energy efficiency first” tation of the European hydrogen strategy, to the hydrogen, it currently accounts for less than 1% ought to apply, not only to end uses, but to the multiple national and even regional hydrogen of the annual hydrogen production in Europe. entire energy value chain. By focusing on the strategies, all the options are on the table. Now The reason is simple: it is simply not competitive existing energy infrastructure and making it is the time to find the right way to implement yet. According to recent studies, whereas grey more integrated and more coordinated, we can these strategies and make it a reality for all or blue hydrogen has a cost of €2-3 per kilo, limit the need for new infrastructure. Innovative European citizens and businesses. 62 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Clean Hydrogen costs in 2030 and 2050: a review

PIERO JEAN-MICHEL of the known and CARLO DOS REIS GLACHANT Research Associate Director - Florence School - Florence School of of Regulation the unknown Regulation

ydrogen (H2), an abundant element, technologies and human know-how to costs towards 2050 decarbonisation. Our has to be produced before being shift their current non-H2 usages to H2? findings have to be distinguished between the H used for processes or as energy 4. How will existing H2 delivery infrastruc- various alternative technologies to produce fuel. This implies separating it from other ture transform itself to bring H2 from clean H2 for Horizon 2030 and 2050. Because elements with which it combines before being new production facilities to new users alternative technologies of clean H2 pro- used. Until today, ‘dirty’ H2 has been easily and new usages? duction may have different cost drivers and produced by using fossil fuels. To get this 5. Lastly, will the EU have enough inves- various potential for improvement at the two ‘dirty’ H2 ‘clean’, we need to change the way tors, primary resources and new H2 horizons. it is produced. Exploring innovative processes production facilities to feed all new users We have identified 22 technologies for H2 to get it clean may also enable the use of H2 and new usages? Or would a significant production. Nineteen are meant to mainly to do other things that it does not do in large amount of H2 be imported (supposing produce H2. The remaining three are meant scale or well today. Of course, innovating is an adequate set of available delivery to mainly produce industrial goods and have facing the unknown: bringing novelties always infrastructures and production facilities H2 as a by-product. challenges conventional wisdom, similar abroad, with the willingness to trade)? Today, decarbonising H2 supply mainly to how solar PV or offshore wind seemed In our paper, we will take a look at pro- forces the existing two mature technologies anecdotal 20 years ago, or Tesla’s cars just ducing clean H2 able to substitute dirty. We producing ‘cheap and dirty H2’ (Steam ten years ago. will focus on the production technologies and Methane Reforming (SMR) fed with natural H2 keeps asking us the same question: costs of clean H2, circumventing technologies gas and coal gasification) to either change or what potential does it have for our 2030 and and costs of equipping new users and getting be substituted. 2050 economies? Of course, no one knows new delivery infrastructures ready for the It is still very challenging for three main the precise answer, yet. This does not impede new usages – be they inside the EU or foreign reasons: us to think about it rationally. First, by disen- countries. 1. ‘Cheap & dirty H2’ dominates almost all tangling the main dimensions; then by putting We will contrast Horizon 2030 and 2050. H2 production. clarity on some of these dimensions. The Why? Anything able to substantially impact 2. Few ‘mature enough’ competitors exist; main dimensions are five: clean H2 potential in 2030 is nearly in and the other competitors are only 1. Will clean H2 be used to substitute existence: thinking about it is like deliberating “researchers’ ideas”, “baby prototypes” or existing usages of dirty H2? If yes, the likely paths of changes within what is “teen demonstrators.” potential users already have money, already known. Beyond 2030, looking at 2050, 3. These other competitors have not dem- infrastructures, equipment, technologies, many revolutionary or unforeseen changes onstrated how to become ‘cheap’ enough and human know-how to deal with H2. might occur. This contemplates the unknown, and ‘clean’ enough. For example, to pro- Therefore, the main issue is replacing while also contemplating the already known— duce ‘cleaner H2’ from natural gas, one dirty H2 with clean H2, leading to new two different types of reasoning and two has to overcome infrastructure methane technologies, equipment, and costs for legitimate horizons. leakages. producing it. The Florence School has more than 15 2. Do we know all possible new usages years of experience examining what estab- Costs are addressed in the next section. of clean H2 by 2030 and 2050? How lished ‘policymaking institutions’ are doing many new uses of H2 do we foresee, for and claiming. Over the last year, we have 1 - Today’s knowledge of 2030 costs example using liquid H2 as rocket propel- worked on understanding how key references potential of clean H2 lant for trips to Mars? used by policymakers have calculated their At Horizon 2030, we identify two main pos- 3. If clean H2 has to enter into new usages findings. We investigated their more intimate sibilities for cleaner H2 production: where dirty H2 is not used yet (e.g. as a roots, scrutinising their strength and limits 1. Electrolysers, fed with water & ‘clean’ direct substitute to fossil fuels), many of validity: what is known or unknown today electricity; additional questions appear. Firstly, how about the costs of ‘clean’ H2 in 2030 and 2050. 2. Steam Methane Reduction, with Carbon potential new hydrogen users would Our most significant output was a report Capture and Storage (CCS), fed with invest in infrastructures, equipment, looking into EU policies and technological natural gas. Unlocking the full potential of hydrogen in Europe | T he E uropean F iles | 63

The costs of clean H2 electrolysers can be technology – with electricity taken from the share from dirty H2 through lower renewable split into two electricity feeders - based on 2050 regional decarbonised power mix. electricity price while increasing efficiency different renewables: solar PV and offshore We exclude the ‘ideas’ and ‘baby’ tech- and full load hour factor. SMR with CCS, wind. Other electricity sources are guessed to nologies due to today lack of enough infor- fed with natural gas, would also be a cost- produce more expensive clean H2 (nuclear), or mation. Out of those we would categorise as a competitive challenger, supposing that CO2 H2 that is not clean enough (as the foreseen ‘teen’ technology today, we would include one storage and transport infrastructure is built 2030 regional power mix, including remaining of the most ‘mature’: methane pyrolysis with at an acceptable price. fossil fuels). CCU; combining it with biomethane (although While results are still highly hypothetical At present, we do not believe that ‘ideas’, costs speculation built on today’s scarce data for Horizon 2050, mature technologies like ‘baby’ or ‘teen’ technologies can reach is less reliable). Fuel switching to biomethane electrolysers could establish an absolute ref- maturity in the current decade, via any accel- is considered feasible only by 2050 when erence in 2050 “Net Zero” market economics. erated growth from strong policy support. As biomethane production could potentially be All the more if their clean electricity would methane pyrolysis with Carbon Capture and much cheaper and more available than today. come from solar PV, rather than offshore Utilisation (CCU) and coal gasification with The spectacular potential of absorbing GHG wind or the regional decarbonised power CCS. We expect their maturity only after 2030. emissions from the atmosphere by coupling mix. SMR with CCS has the potential to be a biomethane with CCS/CCU will, however, challenger in close second and could innovate 2 - Today’s knowledge of 2050 costs depend on the availability of enough clean in cleanness by switching its fuel source to potential of clean H2 biomethane, the avoidance of biomethane biomethane, but it would be hard to become

At Horizon 2050, costs remain mostly spec- leakages, and availability of a CO2 transport cost-competitive. Methane Pyrolysis with CCU, ulative. We acknowledge three technologies and storage infrastructure for CCS. fed with biomethane, which is today still a for clean H2 production: electrolysers fed ‘teen’ in the prototype phase, could eventually with water and clean electricity; SMR with 3 - Conclusion grow to become a worthy competitor of elec- CCS fed with biomethane; and methane Today, the cleanest and most mature new trolysers, through lower enough biomethane pyrolysis with CCU fed with biomethane. We H2 production technology in 2030 would be price and good sales of solid carbon. add a scenario for clean H2 from electrolyser the electrolyser. It could steal a larger market

Table 1 shows 2030 costs and four key costs drivers (free of any “regulatory” costs or subsidies).

Technologies Electrolyser & solar PV Electrolyser & offshore wind SMR + CCS & natural gas

Costs – 2030 0.9-2.3 EUR/kgH2 1.7-2.8 EUR/kgH2 1.0-2.8 EUR/kgH2 (Note: HHV used for 22-59 EUR/MWh 44-72 EUR/MWh 25-71 EUR/MWh conversion)

Cost driver 1 Electricity price Electricity price Natural gas price 10-25 EUR/MWh 36-46 EUR/MWh 3–32 EUR/MWh

Cost driver 2 Efficiency- LHV Efficiency-LHV 69-75% 69%

Cost driver 3 Full load hour factor Full load hour factor CAPEX 15%-38% 40%-57% 1155 EUR/kW-H2

Cost driver 4 Electrolyser CAPEX CO2 transport & storage

98-200 EUR/kWel 17-55 EUR/tCO2

Table 2 reports the costs and key costs drivers.

Technologies Electrolyser & solar PV Electrolyser & Electrolyser & SMR + CCS & Methane pyrolysis with CCU offshore wind electricity from ‘sustainable’ & ‘sustainable’ biomethane regional decarbonised biomethane power mix

Costs – 2050 0.6-1.7 EUR/kgH2 1.4-2.1 EUR/ kgH2 1.2-2.7 EUR/ kgH2 2.4-4.3 EUR/kgH2 1.7-2.8 EUR/kgH2 (Note: HHV used 14-42 EUR/MWh 36-53 EUR/MWh 31-68 EUR/MWh 60-101 EUR/MWh 44-72 EUR/MWh for conversion)

Cost driver 1 Electricity price Electricity price Electricity price Biomethane price Biomethane price 4-20 EUR/MWh 30-40 EUR/MWh 28-62 EUR/MWh 30-60 EUR/MWh 30-60 EUR/MWh

Cost driver 2 Efficiency- LHV Efficiency-LHV Efficiency – LHV 74-76% 69-70% 55%

Cost driver 3 Full load hour factor Full load hour Full load hour factor Overnight CAPEX Costs reduction (selling by- 16%-40% factor 90%-99% 1088 EUR/kW-H2 product solid carbon) 45%-60% 0.25-0 EUR/kg solid carbon

Cost driver 4 Electrolyser CAPEX CO2 transport & CAPEX 68-110 EUR/kWel storage cost 1261 EUR/kW-H2

17-55 EUR/tCO2 64 | T he E uropean F iles | Unlocking the full potential of hydrogen in Europe Hydrogen will not be the new oil of the XXI century

JEAN-MARC MATTHIEU JANCOVICI AUZANNEAU President - Director - The Shift Project The Shift Project

or the fourth time over the last fifty years, for physical reasons, they will remain higher a carbon-intensive power mix should focus on hydrogen is in the spotlight. However, this than the fossil energies we have been appre- decarbonising their electricity first, before con- Ftime, things have seemingly changed: ciating for decades. Fossil fuels enjoy high sidering initiating the production of hydrogen. with the Green Deal, the EU is committing to energy volume density, are easily stored and For those with a low-carbon mix, focus should reach carbon neutrality by 2050. The clock is transportable and the resource itself is free: be put on decarbonising the 9.8 MtH2 Europe ticking. And energy, as the backbone of our you only have to get it out, refine it and deliver consumes annually, predominantly in chemicals entire economy, representing 75% of EU GHG it. On the other hand, producing, compressing and industry. Alongside heavy mobility, these emissions, is undeniably the field requiring most and transporting low-carbon hydrogen induce activities cannot be directly electrified. Low- efforts. severe energy losses (40-50% of the overall carbon hydrogen should be dedicated to those In this context, hydrogen is praised by EU energy initially used). Even if there is public aid first, before planning to multiply production institutions and Member States as tomorrow’s and mechanisms to improve its competitiveness within the next thirty years thanks to renewable

“green” energy. In July, the EU announced plans (an increased CO2 price or a Carbon Border energies alone. to produce 10 million tonnes of renewable Adjustment Mechanism), shifting towards hydrogen by 2030 as a kick-off for the sector, hydrogen will be at a higher collective cost than Low-carbon hydrogen: use with caution and to invest up to €470bn by 2050. Its today’s fossil-based energy mix. Tomorrow’s hydrogen already has to navigate advantages are numerous: it is energy-dense, through a double constraint: being econom-

versatile and does not emit CO2 when used, only The limits of our electricity system for ically competitive and environment-friendly. water! Hydrogen appears therefore as a credible low-carbon hydrogen Its potential has to be realistically assessed, competitor to reduce our dependence on fossil Being very energy-intensive with limited without overestimating it nor neglecting its fuels (70% of EU’s energy consumption), espe- energy-efficiency progress expectations, mass necessity. Hydrogen will remain a “luxury” cially for sectors where electrification seems production of low-carbon hydrogen will require energy vector due to its structural limits. To compromised. even higher mass production of electricity. increase its competitiveness, electrolysers will Though the hype over hydrogen is strong, However, the European electricity networks have to operate with high load factors. Hence, it is not new. Against this renewed praise, it is are already under strong pressure and their the future of hydrogen in Europe also relies on important to recall that, despite how promising operators have been warning about growing the dispatchable low-carbon power capacities hydrogen may be, it is still governed by physical risks of blackout. Pulsed by EU policies, the available. laws, and therefore has structural limits. If those increasing inclusion of intermittent renewables From a strategic autonomy perspective, constraints are not well anticipated, they will with small load factors and the closure of dis- it is fundamental that a European industrial hamper hydrogen’s potential, wasting precious patchable power plants are expected to further sector emerges to not repeat the solar panels’ time and energy to reach carbon neutrality. contribute to this trend. The coherence and com- scenario. The industrial supply chains must then patibility of those two energy strategies may be secured. Otherwise, our dependency will shift Inherent limits of low-carbon hydrogen as then raise questions. to other mineral resources, technologies or an energy carrier Examples offer a better idea of the order equipment (like imported electrolysers), but our Hydrogen is not an energy source per se, of magnitude involved: producing one million vulnerabilities will remain. but an energy carrier: it needs to be produced tonnes of hydrogen (MtH2) – the amount France before being consumed. Here lies today’s real already consumes annually – through elec- In any case, believing that hydrogen will challenge. In order to be low-carbon under life trolysis would require the equivalent of 9,000 to enable us to maintain our current levels of cycle analyses, it must be produced by elec- 11,000 wind turbines of 3 MW, or 5-6 EPRs. The production and consumption, while meeting trolysers with low-carbon electricity (wind, EU aims at producing 10 MtH2 by 2030... over our climate targets, is a myth. And it would nuclear, hydro…). This process requires a lot of a decade where electricity needs are expected be a severe political mistake. Today’s society electricity and expensive infrastructures, making to increase significantly, due to the energy tran- has to navigate through a tougher double con- production costs on average several times sition and the decarbonisation of other sectors straint: the irreversible growing consequences higher compared to its fossil alternatives. Unsur- and activities (e.g. the rise of electric vehicles). of climate change and the upcoming scarcity of prisingly, being cheaper, fossil-based production Rapidly, we see the holistic limit of a “full fossil resources. To face it, reducing energy con- accounts for 95% of hydrogen produced today. hydrogen economy” praised by some. Hydrogen sumption is inevitable. “When?” will only depend Of course, mass production will inevitably is essential but with a limited potential, and on whether we are prepared to do it willingly, lower production costs in the future. However, therefore requires targeted uses. Countries with or not. The European Investment Bank SUSTAINABLE INVESTMENT FOR CLIMATE AND ENVIRONMENT

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Decarbonised homes need diverse renewable heating solutions. When hydrogen partners with green electricity, climate neutrality becomes achievable. Hydrogen stored in the gas grid is available 24/7 during cold winter days and enables the electrification of heating and transport. With decreasing power from coal, and increasing power from wind and sun, our condensing boilers, combined heat and power and heat pump hybrids will work flexibly with hydrogen or biomethane. This gives our customers no-regret options for customised solutions for individual needs and leaves nobody behind.

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