Hydrogen production and use in Europe is set for substantial growth, with both low carbon and renewable hydrogen needed for a fast, lower risk, cost effective path to net zero.
On 4 May, Hydrogen4EU published a report into its study on how hydrogen can contribute to the EU’s climate goals. It explored two main pathways to net zero, “technology diversification” (TD) where an array of decarbonisation technologies are considered and approved national targets taken into account and “renewable push” (RP), in which renewable energy deployment is prioritised and current policy goals exceeded.
Both pathways see half of final energy consumption come from non-electrified sources, such as hydrogen. Hydrogen demand hits 100Mt by 2050, with the majority from transport (50Mt) and industry (45Mt). It can act as a cost efficient solution for hard-to-abate energy uses in these sectors. In the RP pathway, the report highlighted hydrogen’s importance in absorbing, storing and transporting additional energy from higher renewables generation.
The next 30 years will see production ramp up in pursuit of net zero, with 2030 to 2040 a key period. In this decade, uptake of the hydrogen economy must be accelerated as output rises from 30Mt to 75Mt. Low carbon hydrogen will drive the establishment of the hydrogen economy, with renewable hydrogen taking over towards 2050, especially in the RP pathway, where renewable hydrogen becomes the biggest production source by 2040.
Low carbon hydrogen’s development is dependent on the parallel deployment of the CCUS value chain and ability of CO2 storage capacities to grow rapidly up to 2050, while renewable hydrogen’s development calls for significant investment underpinned by accelerated deployment of renewable and electrolyser supply chains. In the RP pathway, over 1,800GW of dedicated solar and wind capacity is needed, alongside 1,600GW of electrolysers for renewable hydrogen’s upward trajectory to be sustained to 2050.
There is a difference of more than €2tn in the cost of both pathways, with RP’s focus on renewable assets and electrolysers leaving it with a higher capital intensity.
In contrast, the TD approach underscores the value of an agnostic approach with a level playing field between technologies and supply options. It allows for the de-risking investments, relieving of some of the financing and technological bottlenecks and enables a more competitive, efficient energy system. It would save around €70bn per year or €1tn by 2050.