What is the future of European energy?

Hydrogen is an energy source, carrier and store. As a promising alternative to conventional fossil fuels, hydrogen is opening up new opportunities in a variety of industries. And the best part is: it does not emit CO2 or other air pollutants, and in certain circumstances, can even contribute to decarbonization. That said, hydrogen has only made limited inroads in the EU – but that is set to change.

The European Commission established the European Green Deal, comprising a variety of initiatives, with the aim of making the EU climate-neutral by 2050. These targets include the decarbonization of the energy industry. According to EU Commissioner for Energy Kadri Simson, approximately 75 percent of the EU’s greenhouse gas emissions can be attributed to energy generation and consumption. Clean, renewable hydrogen therefore has an important contribution to make.

To date, however, most hydrogen is generated from fossil fuels. And the resulting greenhouse gas emissions are enormous. “In order for green hydrogen to be produced and supplied cost-effectively, certain parameters must first change: electricity has to become cheaper, CO2 more expensive, and capital investment costs must come down,” explains Christian Bruch, CEO of Siemens Energy, in conversation with German newspaper Handelsblatt.* The EU’s current hydrogen strategy foresees three phases of decarbonization.

Three steps to renewable hydrogen

The first phase will run from 2020 through 2024. It includes the introduction of electrolyzers for the generation of renewable hydrogen – and the manufacture of high-capacity (up to 100 megawatts) electrolyzers. At the same time, existing hydrogen production systems based on natural gas must be decarbonized, e.g. by retrofitting them with carbon capture and storage (CCS).

By 2030, during the second phase, the use of renewable hydrogen will expand into other sectors, including truck and rail transport. Moreover, regional ecosystems called “hydrogen valleys” will be developed, where green hydrogen is produced and consumed locally. During the third and final phase – through 2050 – renewable hydrogen will be deployed on a broad scale.

Businesses’ response to the EU initiatives have been positive, and some are already investing in large electrolysis plants. As Andreas Schierenbeck, CEO of German utility Uniper, explained in
Handelsblatt: “The EU hydrogen strategy is a decisive step towards building a robust European hydrogen economy, and towards the decarbonization of Europe.”

 *available in German only

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