As global leaders announced their climate pledges at COP26, side deals in Glasgow saw the port of Antwerp sign a MoU with Chile while Germany launched a charm offensive with the United Arab Emirates, which aim for a 25% share of the global hydrogen market by 2030.
Hydrogen is seen as crucial to decarbonise heavy industries like steelmaking and plays a key role in Europe’s effort to reach climate neutrality by 2050.
Antwerp wants to become one of the main ports for international trade in hydrogen, hoping to fuel Belgium’s own industry as well as the European hinterland.
“The upcoming merger between the port of Antwerp and Zeebrugge will give the new port a leading position as an import hub for green hydrogen molecules,” said Jacques Vandermeiren, CEO of the port of Antwerp, in a clip shown at the port’s event hosted at COP26 on Thursday (4 October).
With its significant solar and off-shore wind potential, Chile ranks among the countries that are expected to export large volumes of renewable hydrogen.
“Green hydrogen is the best way to harvest those resources and share them with the world,” explained Juan Carlos Jobet, Chilean minister of energy, who spoke at the event.
Yet many challenges remain: less than 30% of the electricity produced in Chile is renewable, according to the latest monthly report by the Chilean energy commission CNE, which put the renewable share at 25.7% of production.
To make international hydrogen trade possible, “infrastructure, ports and logistics are essential,” Jobet explained. The agreement between Chile and Antwerp was a first step “to set up the right policy, build a network of collaboration agreements, and to let the private sector operate,” he went on to add.
Whether hydrogen can be shipped from one continent to another while remaining cost competitive is still unclear.
Hydrogen is “harder to store and transport than LNG” and “most countries can produce enough cheap hydrogen locally,” explains Gniewomir Flis, hydrogen expert at think-tank Agora Energiewende.
Yet, there is no lack of interest in hydrogen trade. Also on Thursday, the United Arab Emirates (UAE) presented their “Hydrogen Leadership Roadmap,” which targets a 25% share of the global hydrogen market by 2030.
The UAE has “a focus on Japan, South Korea and India,” explained Nawal Al-Hosany, permanent representative of the UAE to the international renewable energy agency (IRENA), who spoke at Germany’s COP26 pavilion on 4 November.
But no other country has made more overtures to the Emirates than Germany.
Siemens built the first solar hydrogen facility in the Middle East in Dubai last year. An Emirati-German joint study on the role of hydrogen in the energy transition was later published in January and a joint task force to further green hydrogen cooperation between the two countries was announced on 4 November.
“The UAE have great potential for renewable energies and are therefore a very good partner for cooperation in the field of hydrogen and hydrogen technologies,” explained Andreas Feicht, state secretary of the German ministry of economy and energy, who spoke at the signing ceremony.
For energy-hungry Germany, fostering an international hydrogen economy is not just a matter of ensuring access to carbon neutral energy carriers and feedstocks, it is also an opportunity to become a key player in the emerging global hydrogen supply chain.
“German and European companies are excellently positioned to produce key components for the value chains of a hydrogen economy,” said Veronika Grimm, an economist who sits on Germany’s hydrogen council. Examples of these include “vehicles, transport solutions, electrolysers, and fuel cells,” she told EURACTIV.
Germany has big ambitions when it comes to hydrogen trade. In May this year, it launched the ambitious H2Global initiative, supported by €900 million in funding.
“Our goal is to promote a rapid market ramp-up for green hydrogen and its downstream products,” noted Peter Altmaier, German minister of economy and energy.
The H2Global initiative aims to guarantee long-term price stability for the nascent hydrogen market. Thanks to a so-called contract for difference, buyers get the guarantee of a low-cost supply of hydrogen, even though production costs may remain high.
Using an auction system, “the cheapest, most economical supplier will get the strike and he will be awarded guaranteed purchases of 10 years” via an intermediary called HINT.CO, explained Markus Exenberger, director of H2Global.
The “Hydrogen Intermediary Network Company” (HINT.CO), founded on 5 November in Leipzig, Saxony, is H2Global’s instrument to close the price gap, by matching the cheapest producers of hydrogen with the highest paying buyers.
“In the best case, 10 years from now, there won’t be a price gap anymore, and there won’t be a reason for HINT.CO to continue existing,” Exenberger said.
[Edited by Frédéric Simon]