Last 11 March, the European Commission (EC) announced it would review State aid rules and launch a project to produce clean hydrogen to replace fossil fuels to help European firms maintain a competitive edge in global markets as they embark on large-scale emissions cuts. This initiative in the field of low carbon gases takes place amid the EU stepping up its decarbonization efforts as part of the EU Green Deal EC President Ursula von der Leyen announced last December. It should follow the model of an €8.3bn battery project involving seven EU countries and 17 companies launched in 2019, which received €3.2bn of public funding.
In practical terms, one of the measures accompanying this announcement was the setup of the so-called European Fuel Cells and Hydrogen Joint Undertaking (FCH JU) is a public-private partnership supporting research, technological development and demonstration (RTD) activities in fuel cell and hydrogen energy technologies in Europe. Its aim is to accelerate the market introduction of these technologies, realizing their potential as an instrument in achieving a carbon-clean energy system. The three members of the FCH JU are the European Commission, fuel cell and hydrogen industries represented by Hydrogen Europe and the research community represented by Hydrogen Europe Research.
Whilst the technology needed to replace fossil fuels with hydrogen is expensive, doing so could help to cut emissions in hard-to-decarbonise sectors such as steel. EU alliances are hoped to follow for low-carbon industries, cloud data and raw materials. Technologies like “green hydrogen” production (see below) will require vast amounts of clean electricity from companies, which is why Brussels is set to follow up with a more detailed plan to help guarantee this supply. Such upcoming plan is said to include investments in the two-digit billion-euro area to support further development of low carbon gases across the EU.
These recent developments at EC level suggest hydrogen will probably be one of the main beneficiaries of the European Union’s decision to ramp up efforts in order to achieve carbon neutrality by 2050. The possibility of substituting an energy carrier such as hydrogen for fossil fuels is gaining increasing recognition in a context where initiatives are being ramped up to combat climate change. What’s more, through the various production processes we detail below, hydrogen appears almost infinite in contrast to fossil fuels. Finally, also in contrast to fossil fuels, which release CO2 and other greenhouse gases during the combustion process, hydrogen used at the end of the chain is simply transformed into water. There follows that, in time, hydrogen could contribute to mitigating climate change by playing an active role in the decarbonisation of the economy, replacing fossil fuels in energy-intensive sectors such as aviation as well as road and maritime transport. Furthermore, hydrogen can also be used in manufacturing processes in sectors such as steel, chemicals and petrochemicals.
However, not all types of hydrogen can be considered "low carbon". It all depends on how the molecule is produced. Hydrogen can be produced from coal or natural gas (steam methane reformation - SMR) or water (electrolysis). If the electrolysis of water is powered by clean electricity, the resulting hydrogen becomes "green" because of its very low carbon intensity over the entire life cycle. However, electrolysis is still an immature process, with a production cost of the molecule that is two to three times higher than with steam methane reformation. The scale of the investments in hydrogen envisaged at European level is aimed precisely at achieving sector-wide viability through economies of scale.