France plans to invest 7 billion euros in this new industry by 2030 in order to establish itself and master it, while Germany is prepared to commit up to 9 billion euros. However, the EU and European nations are not the only contenders. Japan, South Korea, Australia, and even Russia have begun to create ambitious hydrogen development goals. Pierre Laboué, IRIS researcher and pilot of the Observatory for the Security of Energy Flows and Materials, provides an update.
Importance of control over hydrogen production?
According to the International Energy Agency, hydrogen may account for roughly 15 percent of final energy consumption by 2050, or possibly 22 percent under BloombergNEF’s green scenario.
Hydrogen has a significant advantage; it might be the key to attaining carbon neutrality in three decades and decarbonizing sectors that generate large amounts of greenhouse emissions and for which there are few alternatives: heavy manufacturing and heavy transportation. Furthermore, hydrogen is of significance to the EU on the grounds of energy security. It may be created in the summer, for example, to store energy and use it in the winter, allowing for strategic reserves and independence from specific energy sources, such as Russia. Last but not least, in principle, all EU member states will be able to manufacture hydrogen. Hydrogen, unlike oil and gas, is not a fossil fuel.
The hydrogen sector has significant market potential, and EU firms are well-positioned to compete in this new market. According to Enerdata specialists Fabrice Poulin and Alice Jacquet-Ferrand, the EU is home to almost half of the world’s providers of electrolyzers, or carbon-free hydrogen production technologies. In addition, the EU is home to 40% of the world’s fuel cell manufacturers, which use hydrogen to create power. In the hydrogen value chain, these two portions are the most important.
Hydrogen issues
The first issue is that we need to decarbonize hydrogen generation. The steam reforming of methane is now the world’s primary source of hydrogen. This produces 900 metric tons of CO2 each year. This is three times the CO2 emissions of France. It’s massive. The EU’s objective is to manufacture green hydrogen, which entails splitting a molecule of water (H2O) in half, recovering hydrogen on one side while rejecting oxygen on the other.
The expense of manufacturing carbon-free hydrogen is the second issue. Hydrogen may continue to be more expensive than the fossil fuels it may eventually replace. The challenge will be to produce carbon-free hydrogen at a cost that is competitive.
This is where the third issue occurs. The EU will need to import massive amounts of hydrogen. This remark may appear contradictory, given the EU is theoretically capable of producing the hydrogen it requires. However, as our expert Manfred Hafner points out, just because a solution is technically feasible does not mean it is financially viable. Furthermore, some EU nations may find it more cost-effective to import huge amounts of hydrogen rather than create it exclusively in their own country. As a result, securing hydrogen supply will be important.
Nations with best position
According to our expert Philippe Copinschi, Australia, Morocco, or Chile might become key hydrogen suppliers in the future. These nations have tremendous potential for solar and/or wind energy production, as well as massive natural gas reserves, rich water resources, and the ability to attract significant money to fund the infrastructure required for both hydrogen production and export.
So, what about the Middle Eastern countries, which are now the center of gravity for oil geopolitics? Can they become big carbon-free hydrogen exporters? They may not be able to create hydrogen at a competitive price because they lack a vital resource: water. As a result, the weight of Middle Eastern nations in future energy geopolitics may be lessened in comparison to the existing scenario. As a result, the geopolitics of hydrogen has the potential to update in detail the geopolitics of energy’s power and reliance components.
