Driving the European Green Deal with renewable hydrogen

2 April 2021

As the European Commission progresses on its pledge to reduce carbon emissions by 55 percent by 2030 as part of its European Green Deal, hydrogen is increasingly expected to become the future energy source of choice to drive the decarbonisation of Europe’s heavy industry and shipping in the years to come. 

As the European Commission prepares to present its “Fit for 55” Agenda to revamp the EU’s energy and climate policy in June in view of achieving its goal of overall greenhouse gas reduction of at least 55 percent by 2030, compared to 1990, heavy industry, shipping and transportation are a key target for policymakers. 

While electrification is already the norm for a vast majority of (passenger and freight) rail transportation, an ever-growing number of car manufacturers are committing to a future in which battery electric vehicles (BECVs) replace the traditional internal combustion engine. According to most industry observers, EV technology has won the technology race for the future of personal and last-mile mobility (city busses, last-mile deliveries).

Despite expected future technological advancements making batteries more long-lasting, lighter and efficient, they are not feasible in industries  requiring a sustained heavy-duty energy output. This particularly includes heavy-duty and long-range transportation such as haulage, shipping and aviation, as well energy-intensive industrial processes as steel production. 

To serve these industries, EU policy makers and industry leaders are increasingly touting hydrogen energy as the carbon-neutral, energy-efficient alternative to fossil fuels. 

According to the European Commission, hydrogen today accounts for less than 2 percent of Europe’s energy consumption and is primarily used in energy-intensive processed to make chemical products, such as plastics and fertilisers. In addition, its high storage potential in tanks similar to those used for fossil fuels, has made hydrogen an option to power a new generation of ferriestrains or aircraft

To further these technological developments and help bring them to market in the near future, the European Commission adopted a new, dedicated Strategy on hydrogen in July 2020. The specific focus of the new strategy is on exploring the potential of and promoting the use of so-called “green hydrogen,” so as to fully reap the environmental benefits of the technology. 

To date, 96 percent of hydrogen production is Europe is produced through the use of natural gas, a fossil fuel in itself, emitting significant amounts of CO2 emissions in the process. While such conventional hydrogen is more environmentally friendly than the use of oil or coal, which emit damaging emissions at both the sourcing and end-user stage, according to some EU policy makers, it would still require significant environmental impacts. 

In contrast, “green (or renewable) hydrogen” is produced using renewable energy exclusively sourced from solar, wind or hydro power. Policymakers hope that, as more and more countries transition from a carbon-based towards a renewable energy industry, renewable hydrogen will play an increasing role in the EU’s energy system. This, in turn, should help further power the adoption and transitioning to a carbon-neutral European heavy industry and long-range, heavy-duty transportation sector. 

In a first step to enabling this, the Commission expects EU Member States and market participants to install at least 6 Giga Watts of renewable hydrogen electrolysers in the EU to facilitate the production of up to 1 million tonnes of renewable hydrogen by 2024. This should facilitate the decarbonisation of existing hydrogen production and promote the take up of hydrogen consumption in new end-use applications such as some industrial processes and heavy-duty transport.