EU’s Hydrogen Strategy: Focus on Renewable Hydrogen

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Hydrogen can be used as a fuel or as a feedstock for producing different chemicals. From last few weeks, hydrogen has been in the media again. The main reason for this renewed attention to hydrogen was that European Commission has published its Hydrogen Strategy. The fundamental aim of this strategy appears to pave the way towards clean and interconnected energy system inside the European Union (EU) by incorporating clean hydrogen as a fuel for energy and chemicals production.

In this post we aim is to discuss the need for EU’s hydrogen strategy, which type of hydrogen production is supported it and by when a commercially promising ‘clean’ hydrogen production technology can be expected following the plans in this strategy.  

Reasons Why Hydrogen is a Priority in the EU

Hydrogen is considered as the key to achieve the targets set by European Green Deal and the transition towards clean energy in Europe. Apparently, the reasons to put clean/renewable hydrogen production and utilization as a priority in the EU are:

  • In decarbonizing Europe’s energy consumption by 2050 the renewable electricity cannot do all. There will be some gap left in achieving the EU’s decarbonization targets (i.e., to become carbon neutral by 2050 and to implement the Paris Agreement) by using only the renewable electricity. So, hydrogen can be used to fill some of that gap since it is does not emit carbon dioxide when used.
  • In steel manufacturing and some other chemical industries, emission of greenhouse gases (GHGs) is very high. Carbon dioxide foot print of steel production accounts for ~7% of the total global emissions. Using renewable hydrogen as fuel in such industries will lower their and EU’s GHGs emissions. It can also act as an alternative fuel for local city buses, commercial fleets, heavy-duty and maritime transport industry. In future, if renewable hydrogen will be used to produce liquid kerosene or other synthetic fuels, aviation industry can be decarbonized also.
  • For the economic recovery after COVID 19, the investments in renewable hydrogen sector will create more jobs.
  • To take benefit from the global development of clean/renewable hydrogen as an energy carrier. Existing competitiveness of EU in the manufacturing of renewable hydrogen technologies will help Europe in getting more revenue and employment by 2050.
  • Around 60% reduction has been seen in the cost(s) related to electrolysers used to produce hydrogen over the last decade. By 2030, their cost(s) is expected to be the half of today’s cost(s). In addition, by 2030 the price of hydrogen produced by the electrolysers is expected to compete with the price of fossil-based hydrogen in the regions of Europe where renewable electricity is cheap. This trend in the costs related to electrolysers producing hydrogen is also one of the important drivers for putting renewable hydrogen production on a priority in the EU.
What is Renewable Hydrogen & Electricity-based Hydrogen?

To understand the difference between the Renewable Hydrogen and Electricity-based Hydrogen we need to know a bit about how hydrogen is produced commercially.

Natural gas and coal are currently used as the main feedstocks for the commercial production of hydrogen.

Reforming of Natural Gas:

When natural gas is used to produce hydrogen the process is called natural gas reforming. In this process, natural gas containing methane (CH4) reacts with high-temperature steam (@700°C to 1000°C) in the presence of a catalyst to produce hydrogen, carbon monoxide and carbon dioxide. In a second reaction called the water-gas shift reaction, carbon monoxide is reacted with water over a catalyst and more hydrogen is produced. In a subsequent step, carbon dioxide and other impurities are removed via pressure-swing adsorption leaving nearly pure hydrogen. Another process is also used to produce hydrogen which involves partial oxidation of natural gas in the first step. Other steps of this process are almost similar to the natural gas reforming process.

Gasification of coal:

In this process, the first step is to react the coal with oxygen and steam under high temperature and pressure to form Synthesis Gas (also called syn gas). Syn gas a mixture of hydrogen, carbon monoxide and carbon dioxide. Carbon monoxide and hydrogen are the major components of syn gas. Remaining steps of this process include conversion of carbon monoxide to carbon dioxide and more hydrogen via the water gas shift reaction. Finally, hydrogen is separated from carbon dioxide with the later being captured and stored.

In the hydrogen strategy of EU, hydrogen produced from such methods using natural gas and coal is called fossil-based hydrogen which has very high GHGs emissions. 

Electrolysis of water:

This method is also being used on a commercial scale for hydrogen production. The unit in which this reaction takes place is called electrolyzer. These electrolyzers can be small or (considerably) big in sizes. Each electrolyzer has a cathode and an anode separated by an electrolyte. Differences in the electrolyte material cause the electrolyzers to work in slightly different ways. For example, some of the electrolyzers use polymer electrolyte membrane (PEM), whereas the others use alkaline (liquid or solid) electrolyte or solid oxide electrolyte. Overall, the reaction mainly produces hydrogen and oxygen in all of these electrolyzers.

Electricity is needed to run an electrolyzer. This electricity can be renewable or non-renewable (i.e., fossil-based) or partially renewable.

In the EU’s hydrogen strategy, hydrogen produced by using electrolyzers is classified as:

Electricity-based hydrogen:

Hydrogen produced by an electrolyzer using any source of electricity (i.e., renewable and/or non-renewable) is referred to as electricity-based hydrogen. GHGs emissions based upon the full life-cycle assessment of such hydrogen production technologies strongly depend upon the type of electricity used.

Renewable or Clean Hydrogen:

Hydrogen produced from an electrolyzer using renewable electricity is called renewable or clean hydrogen. GHGs emissions based upon full life-cycle assessment of such a hydrogen production method are close to zero.

If, instead of using an electrolyzer, hydrogen production method uses biogas reforming or biomass is (bio)chemically converted into hydrogen in compliance with the sustainability requirements then that hydrogen can also be considered as clean or renewable hydrogen.

Are All Hydrogen Production Methods Supported by this Strategy?

Since Renewable Hydrogen has the lowest carbon footprint and, therefore, the highest decarbonization potential so this type of hydrogen is mainly supported in the EU’s hydrogen strategy.

However, for short term actions and to clean the existing hydrogen production technologies, the strategy also recognizes the role played by other technologies with low GHGs emissions e.g., technologies using carbon capture and storage or the ones utilizing other forms of low carbon electricity in hydrogen production to reduce their GHGs emission.

What is the Cost of Renewable Hydrogen?

According to the European Commission’s report, at present the renewable hydrogen is far less cost competitive than the fossil-based hydrogen. The estimated cost of renewable hydrogen is around 2.5 to 5.5 €/kg. This is significantly higher than that of the fossil-based hydrogen which is around 1.5 €/kg for the EU. Cost of the fossil-based hydrogen strongly depends upon the price of natural gas.

However, the report also highlights that in the last 10 years 60% reduction has been noticed in the cost(s) related to electrolysers used for renewable hydrogen due to various technological developments. These costs are further expected to decrease and to become nearly half of today’s cost by 2030 with the economies of scale. Therefore, this trend will play the main role in making renewable hydrogen cost competitive with the fossil-based hydrogen.

Safety Standards Related to Hydrogen & Infrastructure Development

Hydrogen is a highly flammable gas and European industry has developed standards related to hydrogen production, storage, transportation and utilization. The EU’s strategy mentions that, with increase in hydrogen consumption, there will be a need for further improvement of the safety standards.

‘In Europe, there are already more than 1500 km of hydrogen pipelines.’

Development of suitable infrastructure is a condition for the EU-wide use of clean hydrogen. In the initial phase, local industrial clusters will be used to fulfill the hydrogen demand in the industry and for the hydrogen refueling stations. Later on, different options will be exploited to improve the infrastructure.

Supporting Investments in the Hydrogen Economy

In order to identify and develop economically viable investment projects, The European Clean Hydrogen Alliance has been created. It also aims to deliver on the EU’s hydrogen strategy, to support the investments for scaling up production and demand. Moreover, it will be playing role in bringing together the different stakeholders e.g., national, regional authorities, industry and the civil society.

When shall we Expect the Results from This strategy?

According to the strategy, the aim of developing a clean hydrogen economy will be accomplished in three phases at different speeds.

  1. Today, electrolyzers installed in the EU have a capacity of ~1 Gigawatt (GW) . In the first phase between 2020 – 2024, the aim is to increase this capacity up to at least 6 GW of electrolyzers producing up to 1 million tonnes of renewable hydrogen. This renewable hydrogen will help in decarbonizing the existing chemical sector and promote new applications.
  2. During the second phase between 2024 – 2030, the target is to install at least 40 GW of renewable hydrogen electrolysers producing up to 10 million tonnes of renewable hydrogen. In addition, making hydrogen an integral part of the EU’s energy system is also the objective of this phase. New industrial sectors will be focused for hydrogen use during this time. These industries include steel manufacturers, rail, trucks and maritime transport.
  3. Third phase, from 2030 – 2050, is aimed for such a mass production of renewable hydrogen that it can help in decarbonizing all remaining difficult-to-decarbonize industries. During this phase it is anticipated that the hydrogen production technologies should reach their maturity.  

Communication from the commission to the European Parliament, the Council, The European Economic & Social Committee and The Committee of the Regions, A hydrogen strategy for a climate-neutral Europe.

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