The global energy landscape is undergoing a remarkable shift as the world endeavors to combat climate change and enhance energy security by transitioning to cleaner, more sustainable energy sources. In this context, low emission hydrogen has emerged as an important tool for decarbonizing sectors in which emissions are hard to abate. The recent global energy crisis has also given more impetus to low-emission hydrogen to bolster energy security. As a result, governments have strengthened their commitments to achieve net zero emissions, and low-emission hydrogen has become an integral part of their plans.
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- Despite reaching a record high in 2022, hydrogen demand is mostly limited to traditional applications, and significant challenges remain for meeting the EU's ambitious renewable hydrogen targets by 2030.
- European electrolyser manufacturing capacity needs significant growth to meet the 2030 goals, although plans to expand capacity indicate progress, especially with a strong increase expected by 2025.
- Concerns about hydrogen leakage, which indirectly contributes to global warming, highlight the importance of reducing and monitoring emissions along the supply chain to ensure a sustainable hydrogen economy.
This summary is written by AI and checked by a human.
The REPowerEU plan, launched by the European Union (EU) in 2022, is about rapidly reducing our dependence on Russian fossil fuels by fast forwarding the clean transition and joining forces to achieve a more resilient energy system and a true Energy Union. Renewable hydrogen will be key to replacing natural gas, coal and oil in hard-to-decarbonized industries and transport. REPowerEU sets a target of 10 million tons of domestic renewable hydrogen production and 10 million tons of renewable hydrogen imports by 2030.
The production must be accelerated
Hydrogen demand reached a historical high in 2022, but it remains concentrated in traditional applications. Global hydrogen use reached 95 million tons in 2022, a nearly 3% increase year-on-year, with strong growth in all major consuming regions except Europe, which suffered a hit to industrial activity due to the sharp increase in natural gas prices. Low-emission hydrogen is being taken up very slowly in existing applications, accounting for just 0.7% of total hydrogen demand and low-emission hydrogen use is still far from what is needed to meet climate goals. At the same time some questions about have arisen how realistic European level hydrogen plans are: While the European Commission has taken a number of positive steps, challenges remain all along the hydrogen value chain, and the EU is unlikely to meet its 2030 targets for the production and import of renewable hydrogen. The auditors call for a reality check to ensure that the EU’s targets are realistic, and that its strategic choices on the way ahead will not impair the competitiveness of key industries or create new dependencies. It is good that all plans go through the reality check but remain the positive feeling and attitude because hydrogen really plays vital role in future energy systems.
Europe is facing a capacity gap
The existing manufacturing capacity is, however, arguably still insufficient compared to the EU’s targets for the ramping up of renewable hydrogen production by 2030. With their current capacity, the European electrolyzer manufacturers could deliver up to 23.4 billion watts (GW) of electrolysers by 2030, assuming production at full capacity for the next seven years. To meet the ambitious REPowerEU objective of producing 10 million tons of hydrogen annually, roughly 100 to 120 billon watts of electrolysers would be required. Therefore, further growth in production capacity is essential if Europe wants to be self-sufficient in electrolyzer manufacturing. However, the situation doesn’t look hopeless, because European electrolyzer manufacturers announced capacity expansions reaching 27.8 GW by 2030. There is a significant increase in 2025 when almost 10 GW peryear of manufacturing capacity has been announced to come online. The growth will be accompanied by expansion of manufacturing capacity across Europe.
Green hydrogen is not totally innocent itself
Concerns have been raised recently regarding the potential global warming impact caused by hydrogen emissions. Although hydrogen is neither intentionally emitted to the atmosphere when used nor a direct greenhouse gas, hydrogen losses affect atmospheric chemistry, indirectly contributing to global warming. Hydrogen losses to the atmosphere will impact the lifetime of other greenhouse gases, namely methane, ozone, and water vapor, indirectly contributing to the increase of the Earth’s temperature in the near-term. To minimize the climate impact of a hydrogen economy, losses should therefore be minimized, prevented, and monitored. Unfortunately, current loss rates along the hydrogen supply chain are not well constrained and are currently estimated to go from few percents for compressed hydrogen (1-4%), up to 10-20% for liquefied hydrogen. Both the global warming impact of hydrogen emissions and the leakage rates from a developed hydrogen economy are subject to a high level of uncertainty. However, hydrogen emissions are much smaller than CO2 and methane emissions.
Let’s make green hydrogen work
Even if the there are many challenges in the road of winning hydrogen, it will surely play a vital role in the future energy and material systems in Finland, Europe and globally. However, what are our options if green hydrogen is not used as an energy carrier and raw material for e-chemicals and e-fuels? Despite the challenges of green hydrogen, it remains essential for decarbonizing society and securing our future energy system. What we only need now is bold research, investments and the courage to act.
Sources:
- Hydrogen Europe; Clean Hydrogen Monitor 2023.
- REPowerEU plan.
- IEA, Global Hydrogen Review 2023
- Special report 11/2024: The EU’s industrial policy on renewable hydrogen – Legal framework has been mostly adopted – time for a reality check.
- Hydrogen Europe; Clean Hydrogen Monitor 2022.
- Hydrogen emissions from a hydrogen economy and their potential global warming impact (JRC technical report).
