The European Commission has a clear long-term objective of supporting green hydrogen produced 100% from renewables, but the EU will also rely on fossil-based hydrogen with carbon storage as a stepping stone in order to grow the market in the early stages, a senior EU official has said.
Future EU funding for gas infrastructure – including hydrogen storage and pipelines – will be clarified in an upcoming EU regulation on trans-European energy networks, which the European Commission is expected to publish on 15 December.
And with EU funding at stake, pressure is building on the EU executive to provide support for infrastructure that will accelerate the transition to clean energy.
“For gas pipelines, we will need to design them – with help of EU money – to be ready to transport also hydrogen and be ready for the future,” said Cristian Bușoi, a Romanian lawmaker who chairs the European Parliament’s industry committee.
Over the years, the TEN-E regulation has evolved from a scheme that supports all energy infrastructure – including fossil fuels – to one that supports mostly electricity and gas networks, said Diederik Samsom, the chief of staff of European Commission vice president Frans Timmermans.
Now, the Commission is looking to develop “a completely new framework that puts its eyes on the horizon” and supports only infrastructure which is needed for the deployment of renewable energies, Samsom told participants at a EURACTIV event last week.
“And the same is true for hydrogen: we put our eyes on the horizon – looking at 100% green hydrogen in the future – but we also acknowledge the fact that, in order to get there, we might need a transitional phase of blue hydrogen.
“And we adapt our financing schemes according to that transition”.
According to the European Commission, hydrogen will be needed to stabilise demand and supply in the electricity sector, but also as a source of low-carbon energy for heavy industries like steel and chemicals, which cannot electrify entirely.
Hydrogen is a clean-burning fuel which emits no CO2 when used in industrial processes. However, Almost all hydrogen today comes from fossil fuels and while much attention today focuses on clean hydrogen, less than 0.1% of global production comes from water electrolysis, according to the International Energy Agency (IEA).
“We actually need blue hydrogen to break the chicken and egg problem,” Samsom said in reference to fossil-based hydrogen with carbon capture and storage (CCS) technology to bury the emissions underground.
“We need to speed up demand and supply of hydrogen and we can only do that at the speed required when we give a role to blue hydrogen,” he told participants at the EURACTIV event.
“And the way we manage it is the way we manage all of those transitions – by gradually and carefully financing it and withdrawing those finances when needed.”
In July this year, a group of eleven European gas infrastructure companies presented plans to create a dedicated hydrogen pipeline network of almost 23,000 km by 2040.
If completed, this proposed “hydrogen backbone” will connect future hydrogen supply and demand centres across Europe. These include industrial clusters in Northern EU countries, and offshore wind farms in the North Sea that can produce green hydrogen from excess renewable electricity.
According to those plans, 75% of the network will consist of retrofitted natural gas pipelines – which are gradually expected to become redundant as volumes of natural gas decrease in the future.
For environmentalists, however, there is a risk that EU money will end up supporting fossil gas infrastructure, which will be left stranded in the coming years as Europe moves forward to an energy system dominated by renewables.
“EU instruments should support the cutting-edge and not just the transition technologies,” says Lisa Fischer from E3G, a climate think tank. For her, any kind of financial support for fossil gas infrastructure must be stopped, in line with the updated lending policy of the European Investment Bank (EIB).
“I agree that the discussion on pipelines has changed,” Fischer admitted though, saying: “We might need some infrastructure to match renewable sources of hydrogen with demand in industry”. However, she said those infrastructure needs will be “localised and limited” to industrial clusters in targeted areas.
“It’s quite clear that we don’t need to expand the pipeline network for the transportation of methane,” Fischer said.
In the electricity industry, most would agree. While hydrogen was initially portrayed by some as an alternative to electrification the EU’s objective today is clearly to produce it from renewable electricity sources, said Simone Mori, Europe director at Italian energy utility Enel, which supported the EURACTIV event.
“Hydrogen is a quite expensive way to reduce carbon emission” and it therefore has to be used in areas where it can make the biggest difference – mostly in heavy industries, he said.
The Commission’s long-term vision is to develop 100% green hydrogen and Enel “is entirely in line with this approach,” Mori said. The challenge now, he added, is to develop Europe’s leadership on electrolysers in order to have “cheap renewable hydrogen in the 2040s”.
Some environmental groups are more radical, however, describing the Commission’s hydrogen strategy as “a Trojan horse for the gas industry” which risks diverting massive amounts of taxpayer money into gas infrastructure.
“The reality is that the EU risks being caught in a fossil gas trap,” says a report by the Corporate Europe Observatory (CEO), a lobby watchdog group.
Among EU member states, views on hydrogen differ, with two groups of countries facing off: those supporting hydrogen made exclusively from renewables and those in favour of a broader “low-carbon” definition that also includes hydrogen from nuclear and natural gas.
The pro-nuclear and gas group includes Czechia, Finland, France, Hungary, the Netherlands, Poland, and Romania. In the opposite camp are Austria, Denmark, Ireland, Latvia, Luxembourg, Portugal, and Spain, which support hydrogen produced exclusively from renewables.
At a meeting of national ambassadors from the EU’s 27 member states last week, Spain and Portugal voted against draft EU Council “conclusions” on hydrogen, while Austria abstained. The rest of EU countries voted in favour of the text, even if a majority supports the line adopted by Spain and Portugal.
EU ambassadors will discuss those plans again on Wednesday, with a view to drawing up “conclusions” on hydrogen at the December meeting of the Energy Council next Monday (14 December).
[Edited by Zoran Radosavljevic]