The political framework and the opportunities for market implementation and penetration of hydrogen technologies have improved in the past year, especially in Europe and Germany. The main focus of these efforts is the so-called green hydrogen, which is generated without CO2 emissions from renewable energy sources. But also the so-called blue hydrogen, generated via steam reforming of methane coupled with a CO2 separation (CCS, carbon capture and storage or CCU, carbon capture and utilization), as well as the so-called turquoise hydrogen, generated via the thermal splitting of methane with solid carbon as side product, will be used as bridge technologies to gradually replace gray hydrogen from fossil fuels.
After the RED II (Renewable Energy Directive) was announced in 2018, the European Commission presented the Green Deal in December 2019, in which the most important political initiatives to achieve the global emission targets and a CO2-neutral, European economy by 2050 were developed. Hydrogen is stated as a key instrument to achieve these goals. Other important instruments for achieving the goals are sector coupling in the supply of electricity, heat and industrial raw materials, as well as the provision of clean, affordable and safe energy via intelligent infrastructures in cross-border and regional cooperation. The aim is to promote the use of innovative technologies, including hydrogen networks and energy storage. A particular focus is on activating the market for commercial applications of such technologies, and priority areas include green hydrogen and fuel cells. Frans Timmermans, Vice President of the European Commission, had already emphasized in November 2019 that he gave green hydrogen a central role in achieving the climate goals and that Europe is the world leader in this important technology and this lead should be further expanded. For this purpose, Hydrogen Europe, the union of the European hydrogen industry, has identified a roadmap how to create a profitable market for green hydrogen with cost advantages compared to blue (1.5-2.0 €/kg) and gray hydrogen (1.0-1.5 €/kg). Establishing a 2×40 GW electrolyzer market by 2030 is seen as a necessary step in order to be able to use economies of scale. 40 GW of electrolysis capacity are to be built up in the European Union and the same in neighboring countries, such as in North Africa or in Ukraine. A close network between generation at the point of use, domestic marketing and hydrogen export is to be established. The EU, together with its neighboring countries, can meet all the requirements to implement such a green hydrogen system and remain the world market leader in technologies for producing green hydrogen. The association has sufficient renewable energy sources and the necessary resources to build the infrastructure. Europe can also use its gas infrastructure with connections to its neighboring countries to transport hydrogen and has sufficient capacity in salt caverns to store it. In addition, as already mentioned, Europe is already a leader in the production of green hydrogen, especially in the production of electrolysers. Investments of 25-30 billion euros are needed to implement these plans, which could avoid around 82 million tons of CO2 emissions per year in the EU and create 140 000 to 170 000 jobs.
In 2020, the German government also committed to making hydrogen one of the central pillars in order to meet Germany’s highly ambitious climate targets. The long-awaited National Hydrogen Strategy was published in June 2020 and is intended to create the framework for a profitable hydrogen economy. The green hydrogen technologies are to be established as core elements of the energy turnaround, in order to decarbonize industrial processes with the help of renewable energies and to generate the regulatory requirements for the market ramp-up. The competitiveness of German companies is to be strengthened for this new market by promoting research and development and the technology export related to innovative hydrogen technologies.
Again, the focus is on the production of green hydrogen and an output of 5 GW is aimed to be installed by 2030. In addition to the necessary expansion of renewable energy sources, the main focus of the strategy is on market activation by reducing investment and operating costs. The electricity used for electrolysis is to be exempted from the EEG surcharge (taxes to finance the transition to renewable energy) and investment and operating grants for electrolyzers are planned. In the beginning, green hydrogen will be mainly used for decarbonization of industrial processes, for example in steelmaking and in refineries. Direct use in the transport sector in trucks, trains, and cars is also targeted and the network of refilling stations should be expanded significantly. Up to 1 000 refilling stations are to be built by 2025. The German way in the hydrogen market will be following the European approach. The aim is to distribute hydrogen along the pipelines for natural gas and in new pipeline exclusively for hydrogen within and outside of Europe. Hydrogen has to transported between the production side and the final user. The aim of the strategy is also to build a competitive supply chain around hydrogen technologies in order to tap new value creation potential, for example for the German automotive industry. It is widely accepted that research and innovation are an essential element and the market activation measures are accompanied and supplemented by a research offensive “Hydrogen Technologies 2030”.
CENmat is happy to realize that politics in Europe and Germany are willing to make huge investments in the rising hydrogen market and support the development of innovative approaches to push the transition to a hydrogen economy. We strongly believe that this is the right and only way to target the climate change problem.
CENmat’s technologies are thereby ready to play a a key role in this process and we are looking forward to exciting years, in which innovation will be the key factor for the success of the defined hydrogen strategies.