Hydrogen energy through innovative technologies: new Commission’s plan

For the first time ever, the EU made public a European hydrogen initiative (called IPCEI Hy2Tech) along the Union’s projects of “common European interest”. It is aimed at developing innovative technologies for the hydrogen value chain to decarbonise industrial processes and mobility. In the project’s development and first industrial deployment of breakthrough hydrogen technologies 35 companies from 15 EU member states are taking part. 

Hydrogen is an energy carrier that can be used to store, move, and deliver energy produced from other sources. Presently, hydrogen fuel can be produced through several methods: the most common methods being the natural gas reforming (a thermal process), and electrolysis; other methods include solar-driven methods and biological processes.
Thermal processes for hydrogen production typically involve steam reforming, a high-temperature process in which steam reacts with a hydrocarbon fuel to produce hydrogen.
Many hydrocarbon fuels can be reformed to produce hydrogen, including natural gas, diesel, renewable liquid fuels, gasified coal, or gasified biomass.

For inquisitive readers, our Institute recommends reading some articles about complex energy aspects and hydrogen issues. See, for example: https://www.integrin.dk/2022/05/18/european-energy-complex-issues-and-contemporary-solutions/; and https://www.integrin.dk/2022/04/19/european-energy-and-climate-incentives-for-growth-and-business/; in particular on hydrogen in: https://www.integrin.dk/2021/11/30/hydrogen-a-new-priority-for-the-european-energy-sector/.

Hydrogen project: fields in technology development
The project is structured in four technology fields, concerning the so-called hydrogen value chain: i.e. generation of hydrogen, fuel cells, storage, transportation and distribution of hydrogen, as well as technologies for a final consumers’ usage and corresponding applications.
= First part of the project is about the development of hydrogen generation technologies; it is aimed at developing electrolyses’ facilities by using reduced amount of critical raw materials through a very optimal manufacturing process. Already available achievements in Elcogen, an Estonian SME could be used as inspiring example.
– Second research field is that of developing hydrogen fuel cell technologies, which could use hydrogen to generate electricity. For instance, Nedstack, a Dutch SME, will develop fuel cells for fixed and maritime use, which would increase fuel cells’ efficiency and applicability.
= Third direction is about the development of technologies for hydrogen storage, transportation and distribution. As an example, the French company Arkema will develop and produce materials for hydrogen tanks with bio-based inputs. This can drastically reduce hydrogen tanks’ manufacturing time and cost; the process will be fully recyclable with an increasing safety measures.
= Fourth, is the development of technologies for end-users across a number of applications, in particular in transportation and mobility sectors, such as heavy-duty trucks, trains and ships. It is expected that hydrogen will be used in other energy systems where hydrogen can serve as a “stabilizing reserve”. As an example, Daimler Truck aims to create trucks and buses powered by liquid hydrogen.
Source: Remarks by the Commission Executive Vice-President M. Vestager on “Important Project of Common European Interest” in the hydrogen technology value chain, in: https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_22_4549.

Basics of the IPCEI’s project
First, the entire IPCEI project must contribute concretely and significantly to one or more EU objectives. The IPCEI Hy2Tech contributes to: a) the EU’s decarbonisation targets, as is laid down in the EU Climate Law, and b) REPowerEU Plan, playing its part to diversify energy supplies and moving national economies away from imported fossil fuels.
Second, the Commission made sure that the IPCEI Hy2Tech generates positive spillover effects across the EU member states. Results of the research and development, which are not protected by intellectual property rights, will be widely disseminated; otherwise, results protected by intellectual property rights will be licensed on fair, reasonable and non-discriminatory terms. These initiatives are supposed to benefit states and companies participating in the IPCEI project.
Third, all individual projects must aim at breakthrough innovation: the Commission will conduct technical assessments for all 41 projects to determine whether each project complies with the innovativeness requirements envisioned in European and global state-of-the-art.
Fourth, companies can only receive financial support which is only necessary for the project’s implementation, while any potential competition distortions must be minimized.

Hydrogen market and the EU State Aid facilities
Hydrogen has huge potentials n the European states’ energy mix: however, the EU states need to diversify its energy sources and energy mix, as well as progressing fast towards green transition. Among existing energy-wide technologies, hydrogen has proven to be vital and almost indispensable component.
However, there is no so far established hydrogen market in Europe; in order to create such a market, certain risks for companies and the states shall be eliminated and assist them to invest profitably in innovative and progressive technologies. In this direction, the EU can assist the member states and the business community to unlock and leverage substantial public-private investments to develop hydrogen technologies with the assistance of the EU state aid support.
New EU modern energy project aims at developing innovative technologies for the hydrogen value chain to decarbonise industrial processes and mobility. It involves 35 companies and 41 projects from 15 EU states: Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Italy, the Netherlands, Poland, Portugal, Slovakia and Spain. For the North European states the project is extremely promising: four countries in the region are involved – Denmark, Estonia, Finland and Poland.
State aid rules for IPCEI allow the EU states to pool resources and cooperate, to bring together knowledge, expertise, financial resources, corporate activity and various economic sectors. The European state aide rules enable usage of breakthrough innovation and technology in key energy sectors where the market would not deliver, and ensure positive spillovers for the EU economy while preserving fair competition.
The Commission has authorised under the State Aid rules about € 5.4 billion; besides, the public sectors in the states “will crowd” additional support with about € 8.8 billion euros of public-private investments; however, the Commission’s scrutiny has halved the potential aid that could be granted under this IPCEI. Thus, the total investments under the IPCEI Hy2Tech are expected to be over €14 billion; these funds will allow the development and first industrial deployment of breakthrough technologies in the hydrogen value chain. Boosting innovation and first industrial deployment of such breakthrough technologies is part of the EU’s contribution to a more resilient, greener and digital future.

IEA’s comment
International Energy Agency (IEA) published a vital report analysing present hydrogen situation in the world, and offering guidance on its future development.
First, some references to available international sources: according to the IAE (2019), demand for hydrogen has grown more than threefold since 1975 and continues to rise; it is almost entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to hydrogen production. Thus, as a consequence, production of hydrogen is responsible for CO2 emissions of around 830 million tonnes of carbon dioxide per year, equivalent to the CO2 emissions of the United Kingdom and Indonesia combined. Hydrogen can be extracted from fossil fuels and biomass, from water, or from a mix of both. Natural gas is currently the primary source of hydrogen production, accounting for around three quarters of the annual global dedicated hydrogen production of around 70 million tonnes. The production cost of hydrogen from natural gas is influenced by a range of technical and economic factors, with gas prices and capital expenditures being the two most important. Hence, fuel costs are the largest cost component, accounting for between 45% and 75% of production costs; therefore the hydrogen costs in Europe are the highest in the world, being only second to China.
Secondly, while less than 0.1% of global hydrogen production presently comes from water electrolysis, with declining costs for renewable electricity, in particular from solar PV and wind, there is growing interest in electrolytic hydrogen. Hydrogen output from electrolyse would result in an electricity demand of 3 600 TWh, more than the total annual electricity generation of the European Union.
Thirdly, technologies are already available for hydrogen production, storage, transport and usage; a wide variety of fuels are able to produce hydrogen, including renewables, nuclear, natural gas, coal and oil. It can be transported as a gas by pipelines or in liquid form by ships, much like liquefied natural gas (LNG). It can be transformed into electricity and methane to power homes and feed industry, and into fuels for cars, trucks, ships and planes.
Today, hydrogen is used mostly in oil refining and for the production of fertilisers. For it to make a significant contribution to clean energy transitions, it also needs to be adopted in sectors where it is almost completely absent at the moment, such as transport, buildings and power generation.
Hydrogen prices for consumers are highly dependent on how many refuelling stations there are, how often they are used and how much hydrogen is delivered per day. Tackling this is likely to require planning and coordination that brings together national and local governments, industry and investors.
Finally, the IEA has identified four short-term opportunities and seven key recommendations to boost hydrogen on the path towards its clean and widespread use.
References to the IEA report: https://www.iea.org/reports/the-future-of-hydrogen

Note: The EII is of the opinion that hydrogen – as an important issue in the European energy perspective – needs additional attention from academia, mass media and engineers’ community, etc. before disbursement of the EU funds.


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