EU looks to drive down the cost of hydrogen

Business news |
By Nick Flaherty

The European Commission is aiming to drive down the cost of generating hydrogen a part of decarbonisation moves. This will create ‘hydrogen valleys’ in the Netherlands, Italy and Spain. 

“I am very proud of Europe’s role as the world’s clean hydrogen trailblazer,” said Ursula von der Leyen, president of the European Commission speaking at the opening of European Hydrogen Week.

She points to a number of projects including fuel cells and electrolysers.

“At the beginning of this year, more than 200 new hydrogen projects have been announced globally. 55 percent of them are in Europe. So it is a leadership position that we have built through years,” she said.

“For instance, the European Union started before the rest of the world to invest in a new generation of electrolysers, designed to be powered by renewable energy. As a result, Europe is now the world leader in patents and publications on this technology. Some of the largest electrolysers of this new kind are already operating in Europe. For example, there is one in Linz, in Austria, which produces green hydrogen to power up a steel factory.”

“It is beginning to be competitive also from an economic point of view. Because of the current rise in gas prices we all see, green hydrogen today can even be cheaper than grey hydrogen. Our target should be to bring the cost below €1.8 per kilo by 2030. And this goal is within reach.”

At the start of the year, Norwegian electrolyser maker Nel set its own target of $1.50/kg (€1.33/kg) for green hydrogen produced from renewable energy by 2025. This is backed up by a major project to convert a coal power station in Hamburg, Germany, into a 100MW hydrogen electrolyser. 

Achieving cost parity with oil will require significant investment and partnerships with the private sector and researchers in a new ‘Clean Hydrogen Partnership’, originally announced in February.

“We have to scale up clean hydrogen production, expand its applications, and create a virtuous circle where demand and supply feed each other and bring the prices down. That is the principle. This is without any doubt a global endeavour, but I want Europe to be leading the race,” she said.

She points to seven new projects worth over €1bn to be financed by the European Innovation Fund, where four are hydrogen-related, from green steel in Sweden to carbon capture in France.

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“Take, for example, the Groningen area in the Northern Netherlands. The region has large quantities of renewable energy from its offshore wind turbines. Two electrolysers will use this renewable energy to produce green hydrogen. This hydrogen will then power up industries, it will fuel public transport, it will heat up homes, and be stored underground. By the end of 2025, the Northern Netherlands will host a complete green hydrogen value chain, and this hydrogen valley will create more than 20,000 jobs in the region.”

“We are expanding the same model to other areas, there are many areas that want to follow, from the island of Mallorca to the border region between Italy, Slovenia and Croatia. This is how we can accelerate the hydrogen economy on a local scale, on our way towards a European hydrogen economy as a whole.”

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