The EU and national European governments must take more near-term measures to stimulate a market in hydrogen, according to a panel of industry experts organised by industry group the Renewable Hydrogen Coalition.

A hydrogen market will inevitably develop in the EU, but without the necessary measures it might be too late to meet climate goals and establish the region as a leader in the associated technologies, according to Sanni Kunnas, senior manager for government relations at German chemical company Wacker Chemie.

“We cannot leave this to the market” Kunnas, Wacker Chemie

“We cannot leave this to the market,” she says. “Renewable hydrogen needs to receive the support that the solar industry did not ten years ago, which meant to a large extent the industry moved to China.”

Wacker Chemie wants to build a production complex with industrial gas firm Linde to produce renewable methanol from green hydrogen at its Burghausen site.

The firms foresee the project becoming a hub for green hydrogen production and usage in southern Bavaria. If the funding is granted, construction could begin at the start of next year, with the plants coming online before the end of 2024.

Wacker has submitted funding applications to Germany’s Environment Ministry and the EU Innovation Fund, requesting “high double-digit millions”, according to the firm, and has reached the second round for funding from the EU innovation fund. But even if that funding is granted, the firm estimates it will only break even on the project.

“We need more support to bridge the gap in operational expenditure,” says Kunas. “We have to go to the market to purchase electricity, and prices there do not reflect the cheap generation cost of renewables.”

Wacker says the project needs electricity prices of €¢4/kWh to be competitive, well below the €¢30/kWh that German electricity prices averaged in 2020. “We need political support to bridge this cost gap,” she adds.

EU strategy

Some support does already exist. The European Commission has set a target to install 6GW of renewable hydrogen electrolysers and produce 1mn t/yr of renewable hydrogen by 2024, according to its Hydrogen Strategy.

Once this is achieved, the Commission will then further expand its efforts to reach 40GW of renewable hydrogen electrolysers producing up to 10mn t/yr of renewable hydrogen by 2030.

As well as supporting the development of projects within regional clusters, the EU must take the lead in connecting them as quickly as possible, according to Joel Meggelaars, lead for regulatory affairs at Danish power firm Orsted.

“It’s important to connect regional clusters to a national backbone and then on to an international network… in order to decarbonise industry,” he says.

Orsted is developing a 2GW offshore windfarm in the North Sea which it wants to use to create a large-scale green hydrogen hub in Zeeland and East Flanders.

40GW – Electrolyser capacity EU wants by 2030

As well as the development of hubs, a number of countries are evaluating strategies to use blue hydrogen as a bridge to green, and also to blend hydrogen into national gas networks.

But such a strategy avoids using hydrogen where it is most needed—in decarbonising industry to help EU nations meet climate targets, according to Antonelli Simone Diodato, head of regulatory affairs at Spanish power firm Enel.

“We think blending hydrogen in gas network runs counter to this priority keep int in sectors that will benefit the most,” he says. “I would recommend to focus efforts where they are needed.”

Enel is developing a number of green hydrogen projects with 100MW electrolysers in Spain. One will use a 600MW windfarm to help decarbonise the ceramics industry in Castellon. Another will also be powered by a windfarm and will delivery green hydrogen to a number of off-takers in north west Spain. And it has three other projects running at refineries.

---

Author: Tom Young