EU may struggle to hit targets, needs blue H2: Panel

The EU will struggle to meet its 2030 renewable hydrogen targets and will need to accept hydrogen derived from natural gas using carbon capture and storage (CCS), delegates at the World Hydrogen Summit in Rotterdam heard today.

The bloc aims to produce 10mn t/yr of renewable hydrogen and import the same amount. But relying on renewable hydrogen alone could require nearly 200GW of electrolysis capacity by the end of the decade to produce the combined 20mn t/yr, according to David Burns, vice-president of clean energy at industrial gas company Linde. The world's largest electrolysis plants currently have a capacity of less than 200MW.

Burns also questioned whether electrolyser manufacturers would be able to supply enough equipment in the time frame.

"The numbers are daunting," he said, adding that policy makers should be less dogmatic about technology types and focus more on carbon emissions.

There is no technological barrier to CCS-enabled hydrogen projects today, Burns said, but few projects have reached final investment decisions (FIDs) because CCS-enabled hydrogen costs more to produce than conventional hydrogen with unabated emissions.

French industrial gas company Air Liquide's vice-president of sales and technology, Dominique Rouge, agreed that it is difficult to see how the EU could produce the volume of low-carbon hydrogen it wants without blue hydrogen.

Panellists at the conference agreed that policy intervention is needed to make hydrogen with CCS competitive with production without emissions abatement. Financial support packages to help with operating costs for CCS-enabled hydrogen production have been announced in the US and UK, but so far not in the EU.

Not enough has been done to make offtakers want low-carbon hydrogen, and the market will not adopt it until it is financially attractive to do so, engineering company Bechtel's energy transition global manager of operations, John Gunn, said. But CCS-enabled hydrogen projects in the US have accelerated towards FID — ahead of peers in Europe — because of the country's tax credits, which are based only on CO2 intensity, Burns said.

The other option for policy makers would be to introduce or increase carbon taxes on hydrogen with unabated emissions, panellists said. "You have to include the cost of carbon when comparing fuels; you have to look at the impact on reducing carbon or you'll come up short," Burns said.

BP's senior vice-president of hydrogen and CCUS, Felipe Arbalaez, agreed that CO2 pricing was needed to encourage adoption of lower-carbon fuels.

"What we would advocate at BP and what's really important is that — ideally globally — we move towards some form of pricing of CO2 because that will drive end-user behaviour," he said.

By Aidan Lea