The European Union’s future hydrogen strategy is expected to take a gradual approach, with the aim of producing 10 million tonnes “of renewable hydrogen” in the EU by 2030, reveals a European Commission document obtained by EUROPE on Monday 22 June.
As already announced (see EUROPE 12496/15), the strategy is expected to prioritise renewable hydrogen, defined by the Commission as hydrogen produced by the electrolysis of water using electricity from renewable sources, but with a transitional role for “low-carbon fossil-based hydrogen”, i.e. hydrogen produced using fossil fuels as raw material, with compensation for CO2 emissions via carbon capture and storage (CCS) technologies.
In the short and medium term, this second type of hydrogen will be used “primarily to rapidly reduce emissions from existing hydrogen production and to support the parallel and future uptake of renewable hydrogen”, the document states.
This makes no sense to MEP Michaël Bloss (Greens/EFA, Germany), who believes that the Commission’s willingness to invest in fossil-based hydrogen “means that money is being sunk into a multi-billion-euro fossil grave”.
With regard to the strategy’s implementation, the Commission envisages a three-phase approach.
Phase 1: 2020-2024. From 2020 to 2024, it considers that the EU should aim to produce one million tonnes of renewable hydrogen, with installation of at least 4 GW of renewable hydrogen generators by then in order to decarbonise existing hydrogen production and promote the use of hydrogen in some industrial processes and for heavy transport.
Phase 2: 2025-2030. Between 2025 and 2030, the target is to produce 10 million tonnes of renewable hydrogen in the EU and to have at least 40 GW of renewable hydrogen generator capacity by 2030, the document points out.
In this second phase, the Commission expects that renewable hydrogen will be increasingly used in new industrial applications (in particular the steel industry), in the maritime sector, and for daily or seasonal energy storage.
“Additionally, around 50% of existing fossil-based hydrogen could be retrofitted to produce low-carbon fossil-based hydrogen”, the document points out.
In terms of costs, the institution estimates the necessary investments at: (1) between 13 and 15 billion euros by 2030 for generators; (2) between 50 and 150 billion for the development of the necessary renewable sources of electricity (wind and solar); (3) between 1 and 6 billion euros for the modernisation of existing plants with carbon capture and storage to produce low-carbon fossil-based hydrogen; (4) between 120 and 130 billion euros for hydrogen transport, distribution and storage, as well as for hydrogen filling stations.
In order to cover these investment needs, the Commission is specifically counting on the future ‘Clean Hydrogen Alliance’ (see EUROPE 12497/26) as well as on its Next Generation EU recovery plan, in particular through the addition of a fifth component to InvestEU relating to strategic European investments.
Phase 3: from 2030 until around 2050
In a third phase, “renewable hydrogen technologies should reach maturity and be deployed at large scale to reach all hard-to-decarbonise sectors”, the paper says.
Key actions.
The Commission is planning measures to create a functioning liquid hydrogen market by strengthening both supply and demand.
On the demand side, the Commission is considering, among other things, renewable hydrogen quotas in specific end-use sectors (e.g. certain industries such as chemicals or transport applications) as well as other measures in the framework of the future EU strategy for clean steel.
On the supply side, the Commission will look at how to encourage the production of renewable hydrogen through the forthcoming review of the EU Emissions Trading Scheme (ETS).
According to the document, it will also propose a common low-carbon threshold/standard for the promotion of hydrogen production facilities on the basis of their greenhouse gas performance.
See the new draft strategy: https://bit.ly/3hQEATb (Original version in French by Damien Genicot)