Renewable Hydrogen: The European Union Strategy

Renewable hydrogen could, in the long run, redefine the geopolitical balance of power, particularly between the EU, its neighbors and its historical allies. The EU has therefore put in place its strategy. 490 billion in decarbonized, or “green”, hydrogen.

Massive deployment of renewable hydrogen before 2050?

Renewable hydrogen should play a key role in the European energy transition. In this sense, the European Union (EU) published its hydrogen strategy in July 2020. At the same time, it published its strategy for the integration of the energy system.

Both are part of the Next Generation EU recovery plan, as well as the 2019 Green Pact for Europe, which is expected to be revised in June 2021. This set of measures should help strengthen the new European energy framework to achieve carbon neutrality by 2050.

13 to 14% of electricity from green hydrogen by 2050

With this hydrogen strategy, the EU has set a target of 13 to 14% renewable hydrogen in the European mix by 2050.

To that end, the EU hopes to deploy 6 GW of electrolyzers to produce at least 1 million tons ofclean hydrogen per year by 2024. Better still, by 2030, the EU wants to increase the power deployed to 40 GW and thus produce 10 million tons ofgreen hydrogen. The objective is that by 2050, the technology will be mature and widespread.

“By developing and deploying a clean hydrogen value chain, Europe will become a global pioneer and maintain its leading role in clean technologies,” said Frans Timmermans, Executive Vice President for the Green Pact for Europe

In addition, the start-up of such an industry will require an increase in renewable energy production capacity.

Colossal future European investments

As part of this strategy, the EU has established a European Clean Hydrogen Alliance 2030. The objective is to financially support projects for the development of carbon-free hydrogen in all Member States.

In this sense, the European Green Hydrogen Acceleration Center created in November 2020 aims to participate in the development of a market worth more than 100 billion euros per year by 2025. This market could also create more than 500,000 jobs.

490 billion euros invested by 2050?

Currently, more than 300 electrolysers for renewable hydrogen are already installed across the EU. It is therefore the largest installed capacity in the world. And despite the production of 70 to 100 million tons of green hydrogen each year, this still only represents 4% of all hydrogen produced.

In order for clean hydrogen production to become competitive, the EU plans to invest between 180 and 490 billion euros in the decarbonized hydrogen sector by 2050. And this is without counting the own investments of each member state.

On the other hand, the development of hydrogen also requires massive investments in related industries. In short, all lead markets must evolve: heavy industry, transportation and renewable energies in the first place. Conversely, the EU cannot imagine developing an autonomous hydrogen industry. The risk is to depend, for example, on the import of energy resources from neighboring countries and organizations.

The risk of maintaining the EU’s geopolitical and energy imbalances

The question arises as to the future relationship of the EU with Russia. The latter could become an indispensable link in the future industrial network of the EU. With the possible consequence of Russian interference in the affairs of the European organization.

Already, Germany will almost double its imports of Russian natural gas thanks to Nord Stream 2. Germany and Russia are even considering close collaboration on hydrogen. Due to the gradual reduction in demand for natural gas, 90% of the gas infrastructure could be redirected to the transport and distribution of hydrogen.

In short, the logistical means of distribution and storage must be rethought sub-regionally, but also internationally.

The EU caught in a vice between Russia and the United States

On the other side: the United States. The EU could therefore find itself caught in a vice between Russia and the United States. The two countries have started a dispute over the distribution of natural gas on the old continent.

The advantage for Russia is that their gas pipelines would partly answer one of the problems of hydrogen: the decentralization of production and storage. But for the moment, for reasons of technological and economic pragmatism, underground storage and power plant production seem to be the preferred options.

A global green hydrogen dynamic

In the world, several countries have launched hydrogen strategies. Among other things, as of 2017 Japan has a roadmap in place. In 2019, this is also the case for the United States and South Korea.

Finally, China is already the world’s largest producer of non-green hydrogen. Its electrolysers are almost half the price of those produced in Europe. In fact, the Asian hydrogen market is currently the largest hydrogen market in the world.

On the other hand, Chinese electrolysers are not decarbonized. Germany thus aims to become the world leader in the production of carbon-free electrolysers. To do so, it will have to think about its supply strategy, given its low level of renewable energy and its refusal to resort tonuclear energy.

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