There cannot be many policy ideas that are called a ‘Rock Star’ by the European Commission, but hydrogen was awarded this accolade by Executive Vice-President Frans Timmermans at the launch of the European Commission’s Strategy for hydrogen. ‘Hydrogen is a vital missing piece of the puzzle to help us reach this deeper decarbonisation’ said Kadri Simson, the EU’s Energy Commissioner who presented the strategy on Wednesday (8 July).
Europe wants to be the world’s first carbon zero continent, and the Commission believes hydrogen may be the way to get there. Let’s take a closer look.
The European Commission’s Strategy argues ‘Hydrogen has the opportunity to become a critical part of a more sustainable and secure energy future. Hydrogen can help to tackle various critical energy challenges, including helping to store the variable output from renewables like solar PV and wind to better match demand. It offers ways to decarbonise a range of sectors – including long-haul transport, chemicals, and iron and steel – where it is proving difficult to meaningfully reduce emissions. It can also help to improve air quality and strengthen energy security.’
So that’s a lot of positives, after all hydrogen does not emit CO2 and almost no air pollution when used. But there a big catch. Producing 1 kg of hydrogen currently emits 10 kg of CO2. Globally hydrogen is almost entirely produced using from fossil fuels, less than 0.1% of global dedicated hydrogen production today comes from water electrolysis.
Consequently, production of hydrogen is responsible for CO2 emissions of around 830 million tonnes of carbon dioxide per year, equivalent to the CO2 emissions of the United Kingdom and Indonesia combined according to the International Energy Agency (IEA). In the EU hydrogen production results in the release of 70 to 100 million tonnes CO2 annually, equivalent to the CO2 emissions of six EU member states combined according to Eurostat.
The Commission is proposing to substantially increase production via 6 GW of electrolysers to 1 million H2 by 2024, 40 GW of electrolysers and 10 million tonnes of renewable H2 by 2030, and then for renewable to develop green hydrogen, produced by electrolysers powered by renewable energy. During the
transition fossil fuel with CCS will be allowed. But, according to the IEA, producing all of today’s global dedicated hydrogen output from electricity would result in an electricity demand of 3 600 TWh, more than the total annual electricity generation of the European Union.
The EU’s the ambition for 40Gw in EU, and 40Gw in neighbourhood, would require a doubling of the amount of electricity generated from all renewable sources in the EU in less than ten years. And it is not just about renewable capacity, it is about cost too. As the Strategy itself admits ‘today renewable and low-carbon hydrogen are not yet cost competitive compared to fossil-based hydrogen.’
Ramping up the production of competitively priced hydrogen, produced from renewable energy will come at a high price, and that together with the other necessary measures, including the development of hydrogen infrastructure, could reach €470 billion, according to the Commission, from both public and private sources.
We risk the ‘low carbon’ hydrogen transition becomes a hard and expensive habit to break. Even converting existing production in Europe to renewables will require a tremendous effort and cost.
There is however a tremendous long-term potential for hydrogen, but it is according to the IEA in the southern hemisphere. The long-term trend could have profound geo-political consequences.
Indeed, it is on geo-politics that hydrogen scores hands down, by reducing Europe’s dependency on imported energy. And this potentially zero carbon European technology has the potential to boost European jobs and global leadership. That’s why the Commission’s economic recovery plan and budget ‘Next Generation EU’ highlights hydrogen as an investment priority to boost economic growth and resilience, create local jobs and consolidate the EU’s global leadership
This policy is much more about sovereignty than sustainability. And, particularly given global turmoil and the COVID-19 crisis, the high price of securing European sovereignty is for many a price worth paying.
A Clean Hydrogen Alliance has been launched by the Commission, which brings together industry, governments and civil society, to identify a robust pipeline of projects to accelerate the upscaling of hydrogen production. This is a welcome first step to turn the ambition into a deliverable reality, but given there is still no business plan, no impact assessment, and no cost benefit analysis, it’s hard too early to assess whether this strategy is technically feasible and financially viable. Moreover, there is no comparison with other alternatives, which are likely to be wind, solar, batteries and bio and synthetic gas, not to mention nuclear.
Conclusion
Rather than a strategic road map for hydrogen alone, we need a technology neutral strategic road map for sustainable alternative fuels, developed based on a cost benefit analysis of all alternative fuels. I’m sure hydrogen is highly likely to be part of the mix, not least because of the energy security
arguments, but the policy choice should be both technology neutral and more rooted in an evidence based assessment of the societal, environmental, economic and energy security cost and benefits.
Mark Watts is Director of LP Brussels, a former two-term Member of the European Parliament. He has been advising organisations and businesses on EU transport, energy and environment policy for over fifteen years. He writes in a personal capacity.
More information here:
EU Strategy: https://ec.europa.eu/eurostat/statistics-explained/pdfscache/1180.pdf
IEA Report on the Future of Hydrogen: https://www.iea.org/reports/the-future-of-hydrogen
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