For Europe to become the first carbon-neutral continent by 2050, we need to invest massively in electrification of transport, buildings and industry. There are various renewable electricity solutions, such as hydro, wind or solar energy. And there is clean hydrogen.
Hydrogen can be used as a raw material, fuel or energy storage solution. It has many applications in the industrial, transport and construction sectors. Since its use does not cause CO2 emissions, it contributes to the decarbonisation of industrial processes and economic sectors where the reduction of emissions is both urgent and difficult to achieve.
One year ago, we launched the European Clean Hydrogen Alliance. As of today, we already collected more than one thousand projects to create an investment pipeline for hydrogen projects.
This shows that we are at a turning point for this clean technology.
Of course, this is the result of research and development efforts conducted over the last 15 years.
It is a fact: Europe is a leader in the development of many clean hydrogen technologies.
We have developed an important strategic capacity, in particular thanks the Fuel Cell and Hydrogen Joint Undertaking. Since 2008, it has funded projects with a combined public-private investment of nearly €2 billion.
As a result, universities and companies in Europe have increased the efficiencies of electrolysers and fuel cells, reduced the use of critical raw materials, and demonstrated the feasibility of hydrogen-based industrial processes
Too often though, these projects have remained small-scale and isolated.
Now, as the technology matures and the pressure to decarbonise increases, it is time to move to large-scale industrial deployment of clean hydrogen technologies.
Transforming technology leadership into market leadership is not easy. We need to move fast and at continental scale to face our challenges. Addressing strategic dependencies is one of them.
Addressing strategic dependencies
For hydrogen, this means having access to critical raw materials and securing the availability of large amounts of decarbonised electricity.
Via the European Raw Materials Alliance, we are securing access to critical and strategic raw materials by diversifying supply chains, attracting investments to the raw materials value chain, and fostering innovation. We have already identified investment opportunities across 17 European countries worth €10 billion.
Regarding decarbonised energy, we cannot afford to wait for 10 years until renewable energy projects have reached sufficient scale or until the infrastructure is ready and components available on the market. Others will overtake us and will be selling us their technologies.
In the short to medium-term, other forms of low-carbon hydrogen are needed, including based on nuclear energy.
Nuclear energy is available, steady and abundant. We could use this transitional energy to facilitate the deployment of a clean hydrogen industry in Europe.
How would this work? We could use existing nuclear reactors at the scheduled end of their service life, while of course respecting all safety standards. This would mean disconnecting the reactors from the grid and using the energy they produce exclusively to run electrolysers and thus produce clean hydrogen, until the nuclear plant is potentially shut down – before its programmed dismantling. This would allow a new industry to emerge until sufficient renewable energy is deployed.
We have no choice. We need to ramp up our production capacities in electrolysers and fuel cells, build the world’s first hydrogen-based steel plants and bring hydrogen planes to the market.
‘Our chance to shape the future of the hydrogen economy’
This is our chance to shape the future of the hydrogen economy.
Because we are not alone in this race. Look at the United States, but also China, Japan and Korea: they all have strong capacities in the field of hydrogen. This is why the work of the clean Hydrogen Alliance is so essential. We want to shift gears, roll-out our technologies, build integrated EU value chains.
The objective is to present a pipeline of investment projects during the upcoming Hydrogen Forum in November, based on the project proposals we collected this spring. In parallel, we will need to work on two key aspects.
‘Project financing notably for smaller companies’
Project financing is another challenge, notably for smaller companies. EU-wide collaborations and advisory services, for example from the European Investment Bank, can play an important role in overcoming this barrier.
Especially in an initial phase, public funding support will have an important role to play. At EU level, we have important means at hand: research and development programmes, regional development and infrastructure funds, funds to support the demonstration of innovative clean energy technologies, such as the EU Innovation Fund.
Member States too are putting into place important support programmes, many part-funded by the EU Recovery and Resilience Facility. And they are preparing what I hope could be a series of Important Projects of Common European Interest.
It is not just about the amount of available funding. It is also about channelling these resources efficiently. This is why we have developed a new Hydrogen Public Funding Compass: an online tool that guides projects towards the relevant public funding instruments.
‘Paving the way with best regulatory condition’
The second key issue for the large-scale deployment of hydrogen: the policy and regulatory conditions.
The EU Green Deal provides a clear signal supporting the deployment of clean hydrogen.
For instance, new EU-wide certification systems and targets for the deployment of refuelling stations for hydrogen are proposed.
The Energy Taxation Directive also sets preferential tax rates for the use of renewable and low-carbon hydrogen for end-consumers
Later this year, we will complement this package with a review of EU legislation on gas markets, which I believe they will reinforce the momentum for hydrogen deployment.
We all agree on the potential of clean hydrogen to achieve our climate goals, create jobs and make Europe more competitive.
We will continue to work together in this spirit.
- Thierry Breton, European Commissioner for Internal market
Compliments of the European Union Delegation to the US.