EU imports of green H2 could vie with German production by 2030

Imports of green hydrogen into the EU could be able to compete on price with local production in 2030, according to modelling by Aurora Energy Research.

In particular, imports from Australia, Chile, and Morocco will be competitive with production in Germany, which is used by the research firm as a case study.

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Aurora calculates it will cost between EUR 3.9 (USD 4.2) and EUR 5 per kg to make renewable hydrogen in Germany in 2030. It only looks into electrolysers connected directly to renewable energy assets, onshore wind or solar, as no fully-decarbonised grids are expected by then. In the study, the lowest production costs are achieved by co-locating an electrolyser with a combination of solar and onshore wind generation.

By comparison, the levelised cost of producing renewable hydrogen in Australia, Chile, Morocco and the UAE by 2030 is estimated at EUR 3.1 per kg for the former two countries, EUR 3.2 for Morocco and EUR 3.6 for the UAE. These are all places with high renewables potential and existing investor interest in developing hydrogen projects for export.

The cheapest option will be importing hydrogen into Germany from Morocco by ship as liquid hydrogen -- EUR 4.58 per kg. Imports from Morocco using liquid organic hydrogen carriers (LOHC) or transporting hydrogen as ammonia will have slightly higher costs but will still be competitive.

From Australia and Chile, it would also be viable to import hydrogen but only if it is transported as ammonia. Including the expenses for re-conditioning the hydrogen, the costs are estimated at EUR 4.84 per kg and EUR 4.86 per kg, respectively. Imports from the UAE are not seen to be competitive, with the cheapest option, transporting hydrogen as ammonia, estimated at EUR 5.36 per kg.

Pipelines are expected to reduce costs further. Imports from Morocco via pipeline would cost EUR 3.72 per kg in 2030 but a hydrogen pipeline linking Germany and Morocco is not expected by that year.

“The global momentum behind the hydrogen industry shows no signs of slowing in 2023—export project announcements are coming thick and fast,” said Anise Ganbold, head of research, hydrogen, at Aurora Energy Research. “Our analysis provides a fact check to this and finds that importing hydrogen into Europe even over long distances makes economic sense given the much lower cost of renewable energy in markets such as Morocco and Australia,” added Ganbold.

The European Commission’s REPowerEU Plan targets 10 million tonnes a year of renewable hydrogen imports by 2030 and the same amount of domestic production. According to Aurora, the EU would need at least 75 GW of electrolyser capacity by 2030 to achieve the production target.

In Spain, for instance, the cost of producing hydrogen in 2030 would be EUR 3.10 per kg and imports via pipeline to Germany would cost EUR 3.46 per kg. Different transportation methods by ship would range from EUR 4.35 to EUR 4.57 per kg.

(EUR 1 = USD 1.087)