The bravest recovery strategies will invest robustly in new yet-to-take-off clean energy technologies. If you are going to have to spend hundreds of billions to revive your economy isn’t it better to replace the old with the new rather than prop up what you’ll have to abandon soon anyway? In anticipation of that happening, new technologies are lining up. Here, Cédric Philibert at the IFRI Centre for Energy & Climate summarises their detailed report that makes the case for clean hydrogen. Though production costs are declining, large scale demand will still be needed to make it cost effective. That means policies that guarantee customers, supported by transport and distribution infrastructure, and more clean electricity capacity to fuel the hydrogen production. Immediate large scale customers (for hydrogen as a feedstock raw material) can be fuel refineries and (via ammonia and methanol) agriculture, mining and industry, cutting their carbon inputs. As economies of scale are in sight, use as a fuel for long-haul trucks, shipping and aviation would be next. Plugging into the power sector, via sector coupling with the gas infrastructure, can be a target for 2035. Philibert explains that support for hydrogen clusters, evidence-based roadmaps and demonstration projects will be needed to build knowledge in Europe and realise clean hydrogen’s full potential.

There is now a wide understanding that larger use of clean hydrogen in future can be an important means to achieve decarbonisation of the European economy.

A robust, cost-effective European hydrogen strategy could become a pillar of an EU economic recovery plan which should, in line with the Green Deal, accelerate the decarbonisation of European economies.

The challenge for the upcoming EU strategy is to identify the most important future uses of cost-effective clean hydrogen, and ensure sound scale-up through efficient public support schemes and system approaches driving significant cost reductions. Opportunities to maximise the economic benefits for the European economy in terms of jobs, value creation and competitiveness will also matter. And, of course, effective decarbonisation.

The European hydrogen industry is now largely ripe for a progressive scale up that needs to be planned for the coming 20 years.

Multiple challenges

While clean hydrogen will be indispensable, it comes with technical and economic challenges. There is an undisputed potential for decrease, but costs and availability of energy inputs, as well as transport and distribution systems, and an enabling policy environment, matter as much or more than simple scale-up.

Hydrogen in Japan, S Korea. But it’s not clean

The EU will have to take stock of strategies developed by other countries. Japan and South Korea have robust industrial strategies that push carbon intensive hydrogen in the automotive, residential and power sectors with strong public support. Decarbonisation is not always the primary objective.

Clean Hydrogen uses

• The current demand for hydrogen in fuel refineries and to produce ammonia and methanol for agriculture, mining and industry purposes figures at the top of the possible demand for clean hydrogen.
• Moreover, steel making in the industrial sub-sector is most likely to create considerable demand for clean hydrogen in complement to scrap recycling.
• In the transport sector, clean hydrogen could be primarily used for long-haul trucking and coaches. European products exist and deployment is already underway. Long-haul trucks and coaches may demand significant amounts of clean hydrogen, with some complements from other terrestrial transport means although the European carmakers prioritise battery electric cars and light duty vehicles. For hydrogen fuel cell vehicles and supporting infrastructures the challenge is of cost reduction through upscaling and mass production.
• Deep sea shipping is a sub-sector in which ammonia as a fuel is most likely to generate considerable additional demand for hydrogen. Aviation is a sub-sector that may call for large amounts of clean hydrogen in various forms unless offsetting emissions with verifiable carbon storage is available at scale and more competitive.
• Clean hydrogen may be used to achieve full decarbonisation of the power sector as an inter-seasonal option, via sector coupling with the gas infrastructure – but this will probably not be needed before 2035.

Clean Hydrogen production options

Clean hydrogen can mainly be produced from electrolysis of water with low carbon electricity generation, from natural gas steam reforming with carbon capture and storage, and from natural gas pyrolysis. The clean hydrogen production comes with costs/challenges: hence why future demand must be carefully identified and prioritised.

EU strategy

A sound hydrogen strategy for the EU should initially:

• Assess all available reference studies and international developments in terms of system benefits and costs, certainties and uncertainties, primary and secondary priorities, timelines as well as strengths and weaknesses of the European industry;
• Deploy progressively and cost-efficiently clean hydrogen for the applications where it has a potential proven advantage over competing solutions for decarbonisation to evaluate merit in terms of EUR/CO2 of each application under different assumptions;
• Support hydrogen clusters at city or territorial/ regional levels were production, demand and distribution can be effectively organised into systems that allow scale up, job creations, cost reductions and decarbonisation;
• Organise the scale up of demand and competition over supplies via regulation, IPCEIs (Important Project of Common European Interest) in providing clarity over future needs/timelines;
• Develop roadmaps and demonstration projects for clean hydrogen-based solutions where the possibility of hydrogen proving a superior solution for decarbonisation is high enough;
• Protect EU hydrogen industry stakeholders at all levels and sizes from external takeovers;
• Ensure a level playing field for clean-hydrogen and hydrogen-rich fuels and feedstocks both within the EU and externally when there is a global market and competition, via regulatory tools and/or via a carbon border adjustment mechanism.

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Cédric Philibert is an Associate Research Fellow, Centre for Energy & Climate, IFRI

Access the full report: “Perspectives on a Hydrogen Strategy for the European Union”

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