Hydrogen is generated and sold in the European Union at a rate of around 10 million metric tons per year, with the majority of these volumes coming from the combustion of coal and natural gas.
Green hydrogen is a crucial component in the European Union’s plan to achieve carbon neutrality by the year 2050. The European Commission predicts that by mid-century, renewable hydrogen would account for 13-14% of the bloc’s energy mix.
According to Jens Geier, a German social democrat MEP and the European Parliament’s chief negotiator on the hydrogen and gas directive, hydrogen “is the future of the energy-intensive industry.”
However, supply has been unable to keep up with demand as industries seek to green hydrogen as a gas replacement.
Green hydrogen would be “totally compatible” with current natural gas pricing, MEP Geier argued, if only we had access to it.
Geier, the leader of the German Social Democrats’ European Parliament delegation, is a native of Duisburg, a city known for its steel production. Moreover, the production of “green steel” using renewable hydrogen is of particular interest to the steel industry.
For the development of a market for renewable and low-carbon hydrogen, production is the first step, as outlined by Ruud Kempener, hydrogen project head in the European Commission’s energy department.
He thinks that the European Union’s (EU’s) 2020 hydrogen plan was well timed, as it was released a full year before the onset of the energy crisis.
According to Kempener, “we have quite a number of policy recommendations… which expressly focus on production,” referencing the “Fit for 55” package of energy and climate rules proposed by the European Commission last year.
Kempener mentioned the revised state aid criteria and the reform of the EU’s emissions trading program as examples of tools proposed by the Commission to encourage hydrogen production. There is also “a major hydrogen component in there,” he said of the European Union’s (EU) €800 billion COVID-19 crisis recovery fund.
Production of enough green hydrogen to help the industry fulfill its decarbonization targets remains a significant problem despite these initiatives.
One of the interested parties is the German steel company ThyssenKrupp. In addition to the 75 TWh of renewable power the corporation plans to utilize by 2030, it may require as much as 2 million tonnes of green hydrogen to achieve its decarbonization goals.
According to ThyssenKrupp’s Bianca Wien Prado, “all this represents 165 TWh of power alone in 2030.”
She provided some context by stating that this is “almost double the power usage of Belgium in 2020.”
The lack of an established regulatory framework in the European Union is a major obstacle.
Both the EU’s Renewable Energy Directive (RED) and the gas package proposed by the European Commission in December 2021 regulate hydrogen. The RED is now being revised.
The purpose of these new regulations is to facilitate the cross-border and inter-partner exchange of hydrogen.
Eurofer, the European steel makers’ group, has stressed the need for legal clarity in ensuring a steady supply to meet growing demand.
“If the legislation is not in place if the regulation is not clear and does not give legal certainty, it is particularly challenging for enterprises to make investment choices,” said Prado, who leads Eurofer’s energy committee.
National meddling and the European Parliament going it alone to define “additionality” standards for the production of green hydrogen have delayed the establishment of rules for “renewable” hydrogen generation for years.
However, in order to get hydrogen to Europe’s industrial users, specialized pipelines will have to be constructed as demand rises.
Two modest-sized pipeline networks, the longest of which is 240 kilometers in length, serve the ThyssenKrupp steel mill in Germany.
Prado emphasized the importance of the pipeline in delivering hydrogen to the facility.
When asked about the feasibility of providing the renewable hydrogen she envisioned, she said, “We don’t have the land enough to construct the amount of renewable electricity that we need to really provide the amounts of renewable hydrogen that we envisage.” She went on to say that pipelines are “crucial for us to achieve these decarbonisation projects.”