The European Union will not meet its renewable hydrogen targets, according to a report by the European Union Agency for the Cooperation of Energy Regulators (ACER) and the ‘Clean Hydrogen Monitor 2024’ by Hydrogen Europe, both of which were published on 19 November.
Following on from the findings of the European Court of Auditors (see EUROPE 13455/11), ACER’s report indicates that the EU will not be able to meet the renewable hydrogen consumption target of 20 million tonnes (Mt), given that the current consumption at European level is 7.2 Mt. What’s more, 99.7% of this consumption is still produced from fossil fuels.
“Capacity is being built without demand, and that's the biggest problem facing our industries: demand”, insisted Hydrogen Europe’s Managing Director, Jorgo Chatzimarkakis, speaking to the press as part of ‘Hydrogen Week’ in Brussels.
In particular, the report highlights a 36% reduction in hydrogen consumption for ammonia production following the rise in natural gas prices in 2022. In Europe, ammonia and methanol production have been severely impacted by plant closures and competition from imports, with no subsequent recovery.
Unfavourable market conditions. ACER also reports that electrolysis capacity remains limited, that costs are still high and uncertainties persist regarding the planning of a major renewable hydrogen infrastructure.
These are also difficulties that are highlighted in the Hydrogen Europe report, indicating that in a scenario involving the current trajectory, 1.7 Mt of electrolytic hydrogen and 0.8 Mt of thermochemical hydrogen will be produced in Europe by 2030, resulting in a total of 2.5 Mt of clean hydrogen produced in Europe by 2030.
In a scenario where market conditions improve, projects in Europe could reach 4.4 Mt, which is well short of the target of producing 10 Mt of renewable hydrogen by 2030.
However, to achieve this scenario, the report stresses that improvements are needed with regard to complex or absent regulatory framework, the lack of a national regulatory framework, and the slow development of infrastructures for the transport, storage and importation of hydrogen.
International trade. Jorgo Chatzimarkakis believes that international trade in hydrogen (with the objective of 10 Mt of imports) will be absolutely essential, provided that the infrastructure is built in time to support trade flows within and outside of Europe.
Public funding. Funding on the part of Member States also needs to be reassessed, with national funds currently committed to the amount of €37 billion, 40% of which comes from Germany and 27% from the Netherlands.
Funding programmes at EU level, meanwhile, have allocated around €5 billion to support hydrogen-related initiatives since 2021, mainly through the Innovation Fund and Horizon Europe.
‘RFNBO’ delegated act. When asked about the expectations of the new European Commission, Mr Chatzimarkakis explained that he did not want to wait until 2028 to revise the ‘RFNBO’ delegated act defining renewable hydrogen (see EUROPE 13220/35), in particular in order to delay the ‘additionality’ rules and to review the rules for bidding zones for imports into the EU.
COP29. On an international scale, he welcomed the adoption on Friday 15 November at COP29 in Baku (see other news) of a declaration on hydrogen aimed at increasing the production of renewable, low-carbon hydrogen, as well as a global commitment to energy storage and networks (see EUROPE 13517/21).
Read the ACER report: https://aeur.eu/f/ee4
Read the Hydrogen Europe report: https://aeur.eu/f/ee3 (Original version in French by Pauline Denys)