Investments, Research & Development, private-public collaboration. With the Green Deal, published in 2019, the European Union is determined to become the world leader in the development of renewable hydrogen and its deployment in the continent, to accomplish the goal of becoming carbon-neutral by 2050.
Whether the EU will be able to cope with lobbying activities from the energy sector determined to maintain the status quo and to find and develop the right technology to extract hydrogen in this transition era is an open question.
The rise of hydrogen
Although Hydrogen is a highly debated technology, being at an early stage of development and with billions of euros in research needed, many are betting on this simple element (despite its complicated application) to carry out the famous transition to a green, renewable energy chain.
Governments have in fact all allocated funds from their respective Recovery Plans to the creation of an alternative to carbon.
Hydrogen is being chosen to fulfill this goal due to its non-polluting nature and its many applications as the energy of the future. This element has been so far mainly utilized as a low-emission feedstock (meaning a raw material for industrial and chemical processes) but has increasingly gained ground as an energy source, thanks to important investments in the field. Soon, once we overcome some infrastructure barriers, we will be able to move relevant amounts of goods and people through hydrogen-fueled transportation; by 2030, when the costs of hydrogen production will have decreased, we could be able to heat up our houses and produce synthetic fuels with it.
Many countries have foreseen the potential of being hydrogen exporters in the future, setting up a harsh competition on who will become the lead researcher and producer. Europe, in order not to be outdone, has recently made advancements in the field and is boldly determined to lead the hydrogen race.
Not all Hydrogen is the same
Hydrogen is very versatile, being a vector of energy rather than simply a source. There are in fact four main procedures to extract Hydrogen, but they are all energy intensive. This distinction is what drives many debates within the European Union, with different stakeholders pushing for one or the other extraction method.
The most impacting way of obtaining Hydrogen, the most common element in the universe, is by extracting it from water. A chemical reaction or heat can be used to release the element to be captured. This is how brown and grey hydrogen are obtained: the former is extracted thanks to burnt coal while the latter uses natural gas: two carbon-emitting resources which attach relevant environmental costs to its production. Both processes are considered by the European Union ineffective to the green transition and in contrast with the 2050 carbon-neutral goals.
Recently, though, companies have come up with blue hydrogen, which differs from the ones mentioned above for the fact that emissions produced during the process are captured instead of being released into the atmosphere.
The newest technology, however, which is promising on many levels, is green hydrogen. Here, the process is fairly more complicated, as the Hydrogen is obtained through electrolysis, making it possible to use electric energy rather than fossil fuels.
Green vs. Blue Hydrogen
The 2018 CSIRO report depicts a clear picture of green hydrogen, its opportunities and costs. Electrochemical hydrogen can indeed be easily produced diffusely all over the territory, as it doesn’t come with expensive carbon capture infrastructure. This of course reduces fixed costs and allows for it to be produced where it is utilized, reducing the burden of transportation. This is in fact one of the greatest challenges faced by hydrogen producers: it is massively expensive to transport because its transformation to ammonia, a “movable” material, is energy intensive and so is the transformation back to hydrogen; moreover it is highly inflammable and dangerous to move.
Green Hydrogen, moreover, is not cost-competitive. A kilogram of green Hydrogen costs around $5.50, more than double the one produced through thermochemical processes.
Finally, just like with electric cars, how green hydrogen actually is depends on the extent to which the electricity employed for the electrolysis is clean. In Europe, for example, renewable sources comprise only 20% of all energy produced. Producing hydrogen with electricity obtained through the burning of fossil fuel makes the whole process useless from an emission standpoint.
Blue Hydrogen, on the other hand, is much more feasible for the moment. The technology has been around for decades now and many companies are pushing for it. Doubts remain as to the feasibility of building carbon capture storage technologies (CCS) for each production site, since energy producers have never really used this technology on a large scale in other applications, shedding light on the current ineffectiveness of the technology. In addition Australia, one of the world leaders in hydrogen production, is experiencing significant difficulties in making CCS work efficiently.
Anyway, green hydrogen accounts now only for 0.01% of total production and blue hydrogen hasn’t taken up too much due to its costly nature. The majority of hydrogen is in fact neither green nor blue, but rather grey.
So the question comes up naturally: which technology should Europe bet on to accompany its green transition?
Giving an answer now is not easy, but politics has been trying to shed some light on the topic.
Source: "Liquid Hydrogen Tank Primed for Thermal Protection at Michoud" by Jude Guidry/NASA is licensed under CC BY-NC 2.0
European Parliaments, the Italian one included, have recently discussed and presented their directives, stating which extracting process will be encouraged in their respective Next Generation EU. These decisions are very important to each nation, being hydrogen an important element in the ecologic transition and thus a big part in the recovery plan.
Their discussion has been allegedly influenced by companies in the energy sector, which in Italy account for around 10% of the GDP. Moreover, Mr. Cingolani, the minister for the ecological transition, has recently spoken at a table with all the key players in the energy industry. Needless to say, what came up in the discussion was the will of those companies to invest in blue and grey hydrogen for the future, setting aside the green for the moment. This may be for good reasons, considering the production costs of green hydrogen are still too high for the moment, but many suspect that the energy sector has some vested interest in keeping things unchanged at the moment. First of all, the infrastructures owned by those companies, namely the pipelines, and the expertise in the fossil fuel industry come in handy when speaking about grey/blue hydrogen. In addition, resorting to cheaper forms of hydrogen, as grey is, means they could turn a profit sooner. Finally, we must consider that blue and grey hydrogen need bigger plants and great investment capacity, while green hydrogen, for its nature, can be produced locally. This can be seen as a threat to the survival of big companies, if hydrogen was to become the energy source of the future.
So, how is Europe doing?
Despite the imbalances of power, the costs, the lack of research in the field, Europe has been doing fairly well.
When in 2019 the Green Deal came out, Europe set a roadmap to zero net emissions by 2050. Much of the efforts will be concentrated in the energy integration system (clean power and fuel system, reduced power waste) where hydrogen plays a crucial role.
That is why on the 8th of July the Commission came out with a strategy on Hydrogen.
The action plan closed the discussion once and for all in favour of green hydrogen although it highlighted the necessity of investments in research and development, which had often been neglected or even excluded from the discussion before. Luckily, the cost curve is expected to deeply decline, soon matching the grey, once the resources will be deployed: €24 - €42 billion in the first ten years and €220 - €340 billion until 2050 to connect the whole grid to renewable energy sources.
In order to support the shift to 8,2 GW of electrolysers by 2030 and to achieve a 13-14% share of hydrogen in Europe’s 2050 energy mix, the European Clean Hydrogen Alliance was set up.
Involving all possible public organizations with a stake in hydrogen is the main tool thanks to which our continent plans to become a leader in the technology, totaling in the next future (if all plans are respected) 57% of hydrogen production in the world.
This hegemony in the production of hydrogen puts Europe in a position of geopolitical strength: once hydrogen will be safe to transport, we might see pipelines to Russia emptied of gas and filled with nothing but H2.
The challenge for Europe will be to balance production and research funds, in order not to produce costly hydrogen inefficiently and not to find ourselves lagging behind in its production either. The directives contained in the Green Deal will help us plan this in the most efficient way. It’s time to give hydrogen a chance.