Ambitious EU green hydrogen goals look increasingly unattainable, as a lack of demand provides limited incentive for hydrogen production, which, in turn, keeps demand low in a "chicken-or-the-egg" scenario.
The European Commission's REPowerEU plan proposes that the EU should produce 10 million tonnes of green hydrogen by 2030, and import another 10 million tonnes. However, green, or renewable hydrogen production and demand across European countries is projected to fall significantly short of this goal, according to trade association Hydrogen Europe.
Speaking to Euractiv, the organisation's CEO, Jorgo Chatzimarkakis, predicted that “obligatory demand is going to reach 8.5 million tonnes,” by 2030, a figure still well below the 20 million tonnes outlined in the EU plan.
The ambitious goal was set in response to Russia’s invasion of Ukraine, as the EU looks to end its reliance on Russian fossil fuels as well as decarbonise its economy. The EU's Fit for 55 package on greenhouse gas emissions reductions proposes legislation to translate European hydrogen strategy into a policy framework.
Analytics from GlobalData, Energy Monitor's parent company, show a significant increase in mentions of hydrogen as a theme across company filings during 2021. However, GlobalData figures also suggest that this initial interest has plateaued.
A recent Hydrogen Europe report explains that manufacturing capacity is one obstacle hindering the increase of green hydrogen production in the EU: “Increased hydrogen ambitions will require overcoming equipment bottlenecks, one of the most crucial being electrolyser manufacturing capacity... However, 79% of the capacity planned between 2023–2030 is still conditional on final investment decisions and can change significantly.”
The biggest obstacle to large-scale green hydrogen production is often cited as the sheer volume of renewable power it would require. The production of 10 million tonnes of green hydrogen would require 578TWh per year of renewable electricity, according to the Berlin-based non-profit Renewable Grid Initiative (RGI). This would equate to 30% of European wind and solar electricity production by 2030, it calculates.
“The EU’s 2030 hydrogen targets [...] are dependent on a very fast and unprecedented increase of renewable capacity, grid connections, and electrolysers. The prioritization of hydrogen production over direct electrification means Europe will have to use significant amounts of electricity based on wind and solar (578 TWh/year) in an inefficient way, which will generate energy loses and will not serve to optimise the system,” RGI said.
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