Currently, barely a week goes by without an announcement in the hydrogen sector, whether around production plant projects, gigafactories of electrolysis capacity or components, regional ecosystems, or international-scale partnerships. But beyondthe diversity of applications (from industry to energy to mobility), where are we really up to in the sector’s development?
What’s new at European level?
For the European Commission, hydrogen is indispensable from the viewpoint of decarbonising European industry and achieving the 2030 climate goals, and carbon neutrality in 2050. In its dedicated strategy adopted in 2020, it set the goal of producing 10 million tonnes of renewable hydrogen in the EU by 2030. Since then, as part of the 2022 REPowerEU plan it added the goal of facilitating the import of 10 more million tonnes by the same deadline. The creation of the European Hydrogen Bank now underway should contribute to achieving these goals, with €3 billion allocated to unlocking private investment across the value chain.
More recently still (March 2023), the European Council and Parliament reached an agreement on a new renewable energy directive which should take the amount of renewables in EU final consumption to 42.5% by 2030, with the possibility for some member states of reaching 45%. From this viewpoint, the industry will have to increase its renewables use by 1.6% every year until 2020, but will also have to use 42% hydrogen produced with renewables by 2030 and 60% by 2035. Renewable hydrogen also features among the key* technologies of the Net Zero Industry Act adopted at the end of March as part of the Green Deal Industrial Plan.
… and in France?
France also regards renewable and low-carbon hydrogen as leading key technologies in the greening of industry. Following a hydrogen plan in 2018, in 2020 it adopted a strategy with 3 key pillars; decarbonising industry, decarbonising heavy or intensive traffic and supporting research, innovation and skills development. One of the main goals set as part of this was the installation of 6.5GW of electrolysis capacity by 2030.
All of this translates into advances at various levels. An H2 PEPR led by the French Alternative Energies and Atomic Energy Commission (CEA) and the French National Centre for Scientific Research (CNRS) has been put in place (upstream research). A number of calls for projects have gone out – some for renewables – among them “Bricks and demonstrators” and “Regional hydrogen ecosystems” led by the The French Agency for Ecological Transition (Ademe). Alongside this, most regions have in place roadmaps, plans, or specific strategies.
A number of ecosystems have been deployed with a view to comparing local production capacities and potential nearby usage. Factory projects for the production of electrolysis capacity for industrial use have emerged (e.g. decarbonisation of cement in the Aura region, of steel in Hauts-de-France, ammonia production in the Grand Est or synthetic methane and e-fuels in Provence-Alpes-Côte d’Azur, mass-scale production of green hydrogen in Normandy) and other forms of production are in development, notably based on biomass or linked to offshore wind power. Similarly, several gigafactories are also being rolled out (Cockerill in Grand Est, McPhy and GenHy in Burgundy Franche Comté, Genvia in Occitanie, Elogen in Central Val de Loire).
Various projects are also launching in the mobility and transport sectors (personal vehicles, buses, trains, aircraft, and fuel cells & refuelling stations) and in port & airport logistics. Finally, the picture would not be complete without mentioning storage solutions (reservoirs or subterranean storage), power generators, or hydrogen distribution either via dedicated networks (hydrogen pipelines) or through injection into the gas network. All these projects are among the 840 hydrogen projects listed by the European Clean Hydrogen Alliance at the end of 2022.
Investment: the biggest challenge
However, as the European Commission pointed out in its communication on the European Hydrogen Bank on 16 March, “the European hydrogen market faces four investment challenges : scaling up manufacturing capacities for electrolysers, scaling up new hydrogen production capabilities, opening new demand sectors for renewable and low-carbon hydrogen and developing dedicated hydrogen infrastructure. This also requires additional skilled workers, calling for significant investment in re-skilling and upskilling the needed workforce.”
If “all the relevant European funds are employed” (e.g.; Horizon 2020, which supported the first 100MW-scale electrolysis, the Innovation fund, the call for large scale proposals which closed on 16 March), the Commission estimates that ”the bulk of the investment in the hydrogen sector will have to be covered by private capital.” This is equally the case for member states. Thus for example the draft law on Green industry currently being developed in France is expected to state “0 euros for public financing”, implying that other resources need to be found. Among those under consideration are taxation and savings (one of which is to convert the LDDS savings account from funding the social & solidarity economy into funding “green” projects).
A new French strategy by summer?
A new strategy is being developed in France. According to the Minister with Special Responsibility for Industry, Roland Lescure, who presented the main principles last December, this should offer an operational scheme for hydrogen hubs. Pooling the production in these hubs should offer cost reductions and encourage the development of decarbonised industrial activities. It should also contribute to promoting access to these decarbonised electricity hubs (the major electrolysis providers are in the process of concluding long-term competitive contracts with electricity providers). Plus it should build proficiency in hydrogen-related equipments, enabling France to secure a key position in a fast-growing global market.
The Minister for the Economy stated more widely that this new national strategy for the development of low carbon hydrogen should “permit rapid implementation ensuring the roll-out of plentiful and competitive hydrogen across all the country’s major industrial zones after 2030” and that it should “offer answers to the technological, economic and regulatory questions raised by the development of these hydrogen hubs”. We’ll have more info for you here in June.
* With photovoltaic and thermal solar power, onshore wind power and marine renewable energies, biogas/biomethane, batteries and other storage systems, heat pumps and geothermal, carbon capture and storage, and electrical network technologies.