EU swears by renewable hydrogen, but says low-carbon options are needed for a while

The European Union will seek to install at least 6 GW of renewable hydrogen electrolysers by 2024 and 40 GW by 2030, expecting that by 2050, the technology will be mature enough to reach all hard-to-decarbonise sectors.

While renewable hydrogen, produced mainly from wind and solar power, is seen as a priority, its low-carbon alternatives will be needed in the short and medium term, the European Commission (EC) said in the EU Hydrogen Strategy published today.

The EU executive defines low-carbon hydrogen as encompassing “fossil-based hydrogen with carbon capture and electricity-based hydrogen with significantly reduced full life-cycle greenhouse gas emissions compared to existing hydrogen production”. Clean and renewable hydrogen are used as synonyms, according to the document.

The low-carbon variety will primarily be used to reduce emissions from existing hydrogen production, while the continent ramps up installation of renewable hydrogen electrolysers.

The EC’s three-phase plan sees at least 6 GW of installed electrolysers producing up to million tonnes of renewable hydrogen in the first phase between 2020 and 2025.

To meet the goal, the EU will need to scale up manufacturing of electrolysers, including those of up to 100 MW.

In the second phase, going from 2025 to 2030, at least 40 GW of renewable electrolysers would need to be installed, with the EU production output reaching up to 10 million tonnes.

The EC expects renewable hydrogen to gradually become cheaper by then, but demand side policies will be needed to support the heavy industrial, land and maritime transport sectors.

The expected wide-scale deployment will require equally widespread logistical infrastructure to enable cross-border transport of hydrogen. The EC said it will aim to complete an open and competitive EU hydrogen market.

In the third phase, from 2030 leading to 2050, about a quarter of renewable power production is expected to be used to produce clean hydrogen. By then, renewable hydrogen technologies should be mature and deployed at large scale.

The EC has calculated that investments in electrolysers could range between EUR 24 billion (USD 21.2bn) and EUR 42 billion from now to 2030. On top of this, some EUR 220 billion to EUR 340 billion would be needed to connect 80 GW to 120 GW of solar and wind power capacity to the electrolysers in the next decade.

To retrofit half of the existing hydrogen plants with carbon capture and storage would require around EUR 11 billion. Additionally, EUR 65 billion will need to go towards hydrogen transport, distribution and storage, and hydrogen refuelling stations.

All in all, the EU’s vision for renewable hydrogen will have to involve cumulative investments ranging from EUR 180 billion to EUR 470 billion from now to 2050. Low-carbon fossil-based hydrogen would take up about EUR 3 billion to EUR 18 billion.

The EC is today launching the European Clean Hydrogen Alliance, which will be tasked with identifying and building up a pipeline of viable investment projects across the hydrogen value chain.

Environmental group Friends of the Earth Europe criticised the EC’s plan saying it fails to eliminate support for fossil fuel-based hydrogen.

“The Commission claims that renewable hydrogen is the future but by leaving the door open to fossil hydrogen, and gifting industry influence through a new Alliance, the Commission is handing a new lifeline to the failing fossil fuel industry. It’s now up to MEPs and EU energy ministers to ensure EU support goes to renewable hydrogen only, and to refocus efforts on accelerating efficiency and renewables”, the group’s energy campaigner Tara Connolly said.

Wind power association WindEurope emphasised the importance of scaling up renewables to accompany the increasing hydrogen production.

“[G]etting the policy right on renewables is central to any hydrogen strategy”, said Giles Dickson, WindEurope CEO. He called for all forms of hydrogen to be clearly labelled so that their origins are known to buyers.

(EUR 1.0 = USD 1.134)

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