The meeting at the headquarters of the EU climate and energy policy concerned the paths to accelerate the implementation of hydrogen in the EU, as well as the import of hydrogen and derivatives from third countries. Faced with an unprecedented energy crisis that presents enormous challenges in terms of energy security and affordability in the short to medium term, Europe is at a turning point in its future of hydrogen and net zero emissions. As politicians acknowledged, more than ever, the shift from strategies and announcements to investments in hydrogen and renewable energy is key to ensuring a more resilient energy future for the region.
Hydrogen closer to the market
- For many years I have a strong feeling that hydrogen will be an energy commodity of the future in the energy sector. Hydrogen is so close to the market now. We have to take the last step - said Frans Timmermans, Executive Vice President of the European Green Deal at the European Commission, in a live speech to the assembled members of the Hydrogen Council.
Currently, regulatory uncertainty in Europe means that more than 95% of hydrogen investments are waiting for a final investment decision. Participants discussed the key barriers and drivers for realizing Europe's hydrogen ambitions set out in the REPowerEU Plan, as well as the strategy for integrating the EU's hydrogen and energy systems. In particular, they discussed existing and future support instruments to stimulate domestic production and imports of hydrogen, such as H2Global and the European Hydrogen Bank, as well as the Hydrogen Council's ongoing work on a hydrogen certification roadmap.
- Even if sometimes we feel that things are not going fast enough, and sometimes I agree with that, we have already done a great deal of work in the last three years. Hydrogen is now at the forefront of our European Green Deal program. But we should also put hydrogen at the top of the ecological pandemic recovery agenda. Since Putin's barbaric invasion of Ukraine, hydrogen must also play a key role in our energy transition - a key role in creating European energy sovereignty and weaning us from dependence on Russian fossil fuels - added Timmermans. - That's what RepowerEU is all about. You know that by 2030 we want to obtain 20 million tons of renewable hydrogen: 10 million tons of EU production and 10 million tons of imported hydrogen. It sounds very ambitious, and it's ambitious. But extraordinary circumstances call for extraordinary solutions.
Global Hydrogen Flows
The latest Hydrogen Council report - Global Hydrogen Flows - shows the potential for massive cost-effectiveness gains that can be unleashed through cross-border trade in hydrogen and derivatives, reducing the cost of hydrogen supplies by 25% or up to $ 6 trillion by 2050.
Global Hydrogen Flows is the latest Hydrogen Council report showing that there is no solution to climate change without hydrogen. It reinforces the need for urgent action by the public and private sectors to move from project proposals to implementation. Progress in the development of global cross-border trade in hydrogen and derivatives is crucial to match the pool of demand with profitable supplies from regions rich in renewable energy sources.
- It was a great opportunity to connect with key leaders in the hydrogen economy and share the importance of accelerating the deployment of hydrogen finance in Europe to promote energy independence. Regional governments are investing heavily in the hydrogen economy, and this meeting showed that companies too are ready to act and collaborate to make this exciting future a reality - said Tom Linebarger, executive chairman and CEO of Cummins Inc. and co-chairman of the Hydrogen Council.
Yoshinori Kanehana, president of Kawasaki Heavy Industries, Ltd. and Co-Chairman of the Hydrogen Council, added - I am truly convinced that the industry focus, coupled with increasing political incentives from governments and harmonized global regulation of hydrogen supply chains, will pave the way for a new, clean energy for the world, for the benefit of our environment and for a sustainable future for generations to come.
- I am very proud to see that 30% of projects planned worldwide for the production of renewable hydrogen are located in Europe. But I'm afraid only less than 10% have made their final investment decision. So for the next two years, my goal is to help you make these decisions much faster - explained Timmermans.
European Hydrogen Bank
He also announced that the EU is starting to implement one of the obligations under the RePower plan, i.e. the establishment of the European Hydrogen Bank, which is to help strengthen the role of hydrogen and strengthen the strategy to abandon Russian fossil fuels.
- The next large-scale call for the Innovation Fund will be announced on November 3, with a total budget of € 3 billion. As part of it, first of all, we will allocate EUR 1 billion for electrification as well as the production and use of hydrogen from renewable sources in industry. Secondly, we will have a budget of 700 million euros for the clean production of key components for renewable energy, energy storage and hydrogen from renewable sources. And finally, thirdly, we will support medium-sized pilot projects with deep decarbonisation potential. And for this we have a budget of EUR 300 million. If we want to reach the level of 20 million tons of hydrogen in eight years, we will have to do a lot. That is why we have committed ourselves to creating a European Hydrogen Bank. It should provide more financial resources as well as reduce market risk in Europe, both for hydrogen produced by us and imported. Today we can see how many hydrogen producers are waiting for signals from consumers, and consumers are waiting for the hydrogen producers to start the necessary investments - summed up Timmermans.
The pilot phase of the Bank's operation will start next year with a contract for difference program under the Innovation Fund to support 100% of the cost gap compared to gray hydrogen produced in the EU. There are also discussions with partners and stakeholders on how best to support European consumers' access to hydrogen imports and to support the emergence of early hydrogen hubs in the EU.
About the Hydrogen Council
The Hydrogen Council is a global CEO-led initiative that brings together leading companies with a unified vision and long-term ambition for hydrogen to support the clean energy transition. The Council believes that hydrogen has a key role to play in achieving our global decarbonisation targets, helping to diversify energy sources around the world, supporting business and technological innovation as drivers for long-term economic growth and decarbonising hard-to-reduce sectors.
Using its global footprint to promote collaboration between governments, industry and investors, the Council provides guidance to accelerate the deployment of hydrogen solutions around the world. It also acts as a business market, bringing together a diverse group of around 140 companies from over 20 countries along the entire hydrogen value chain, including large multinationals, innovative SMEs and investors.
Photo Frans Timmermans / @ TimmermansEU / Tweeter