A successful green hydrogen economy requires clear choices now

Contributors: S&D MEPs Mohammed Chahim, Miriam Dalli, Dan Nica, Ismail Ertug. 

Today, the European Commission will publish their long-awaited hydrogen strategy. It is certain by now that green hydrogen will play a crucial role in the decarbonisation of our economy.

To launch a successful hydrogen economy we need a comprehensive roadmap that regulates the access to green hydrogen per sector. In this article, we elaborate on important choices that might not seem relevant now, but will make or break the success of our green hydrogen economy.

Global technology leadership is vital

In theory, the production of hydrogen is simple: you only need an electric current (electrolysis) to split water into hydrogen and oxygen. However, to produce green hydrogen on a large scale, we need vast amounts of renewable energy and huge hydrogen (electrolysis) plants. The current renewable energy production projected for the EU in 2050 will be insufficient to create the needed capacity to produce green hydrogen for Europe. Therefore, we need to significantly scale up the production of renewable energy in Europe.

Green hydrogen technologies work, but they are still largely underdeveloped. The largest electrolysis plant currently being built has a maximum production capacity of 1 Gigawatt. Research suggests that the production capacity of green hydrogen for Europe, can go up to 3400 Gigawatt in 2050. This means, Europe needs to invest more in research and innovation to increase and improve the production capacity of green hydrogen. Additionally, there are other promising and important hydrogen technologies which need further research and development. For example, fuel cells, hydrogen storage and synthetic green chemicals and fuels. To make this happen, Europe should take on the role as the global technology leader for green hydrogen.

Blue Hydrogen

An alternative the industry is willing to provide is blue hydrogen. This is hydrogen made by using fossil fuels and where the carbon is captured and stored (CCS). Blue hydrogen is cheaper to produce than green hydrogen and it can help accelerate the (green) hydrogen economy. To prevent a new fossil fuel “lock in”, the production capacity cannot exceed the potential production capacity for green hydrogen. This technology also needs further development and the Shell Sky scenario for example, contains a staggering 10,000 CCS projects necessary to limit CO2 emissions globally. As of 2019, there are only 21 CCS projects in the world! The cost of carbon capture and storage remains an important barrier to the take-up of CCS and the technology itself is also controversial. If we use this technology, we need to do it wisely; only to get rid of unavoidable industrial carbon emissions. For example, green hydrogen can reduce the carbon emissions of steel production by 95%. We need CCS to capture that last 5%.

Regulating use and demand

Launching the hydrogen economy requires a vast amount of public investments, because green hydrogen is not yet cost-competitive compared to other fuels. We need to make sure these investments pay off socially and environmentally. The Commission needs to create a roadmap prioritising when and which sectors can include green hydrogen in their decarbonisation strategy. This should be based on (1) the total availability of green hydrogen (2) the other options sectors have to decarbonize, (3) where carbon emissions can be decreased most, and (4) where it can be

implemented cost- effectively. Until we have sufficient green hydrogen, it remains a scarce commodity. In order to use hydrogen as a means of decarbonizing our whole economy, we cannot allow ourselves to approach it through an isolated perspective per sector. We need to overlook the short-term gains and focus on regulating demand on the long run to prevent negative market effects. Instead of asking ‘can we use hydrogen’, we need to focus on ‘should we use hydrogen’, also in relation to the dependence of other sectors on hydrogen to decarbonise. A long-term strategy will help regulating the use and demand when we do not yet have enough hydrogen for everyone. It is therefore that we call on the Commission to develop a clear roadmap while taking into consideration the different needs of the different sectors.

Accessibility to all regions

Coordinating the use and demand of hydrogen also entails regulating the supply. More specifically, we need to ensure accessibility to all regions. Switching to a new energy source can potentially decrease the energy security for some regions. We encourage an equal and just distribution of the benefits of transitioning to a new energy system, while at the same time also sharing the burden. We cannot allow anyone to be left behind. An essential part of the Green Deal is ensuring a Just Transition; everyone needs to be able to benefit from the transition. Green hydrogen can play an important role in the Just Transition, provided that the EU takes on its role as a leader.