Policy, investment coordination needed for hydrogen implementation to bear fruit: conference

London — Renewable hydrogen implementation and carbon neutrality remain within reach, but policy and investment will need to go hand in hand to reach decarbonization goals, speakers said at an S&P Global Platts virtual hydrogen conference Oct. 1.

Hydrogen will play a key role in hard-to-abate sectors and mobility where electrification cannot be the solution, but challenges remain, CEO of Engie's hydrogen business unit, Michele Azalbert, told the first annual Platts Hydrogen Markets Europe conference.

"The key question now is how to implement and where to direct subsidies," Azalbert said. "There is a huge amount of money that has to be invested in the coming years."

Hydrogen's use could be felt across all sectors, not only in Europe but around the world, Vice-President of Air Liquide's hydrogen energy world business line, Pierre Etienne Franc, said.

Investment and strategic intent should be coupled with global safety regulations, such as blending hydrogen into the gas network and other issues, Franc said.

"From the global community, we need clear regulations pushing that forward," he said. "We need a level playing field for clean and green hydrogen -- if we get that consensus, then hydrogen will become the mainstream energy for tomorrow."

Azalbert pointed to the targets set by the European Commission to scale up electrolyzer capacity to 6 GW capable of producing 1 million mt of green hydrogen by 2024 and 40 GW, producing 10 million mt by 2030. Large-scale projects needed to be put in motion at least two years before that date.

"To construct the hydrogen plants, manage permitting requires two years to build the asset," she said. "If we want to be ready by 2024, we have to make the investment decision by 2022. It's [almost like] tomorrow."

Engie's role would be twofold: both integrating different layers of the value chain, along with developing the project, including renewable production, desalination of water, and finding storage solutions, she said.

Developers of projects would need to find longtime off-takers for hydrogen at the same time as collecting subsidies to bridge the price gap between renewable (green) hydrogen and conventionally produced from fossil fuels (gray) hydrogen, Azalbert said.

CO2 abatement direction needed

From a volume perspective, but also from a CO2 abatement standpoint, the EC's strategy still had questions to be answered, head of energy scenarios at Platts Analytics, Roman Kramarchuk, said.

"This is a massive uptake for renewable hydrogen production," Kramarchuk said.

Policymakers should give more direction on where that limited amount of hydrogen should be going -- whether it be toward carbon abatement in the steel or transportation sectors, or toward gas grid injection, he said.

"If there isn't an approach for how that hydrogen is going to get to the end-user, that will be a key shortcoming for how hydrogen will be implemented," he said. "If you can't get that hydrogen to the end-user where it can decarbonize in a relatively low-cost way, hydrogen will be challenged in the long run."

Kramarchuk also highlighted the EC's ambition to import renewable hydrogen, although transport costs would remain a key concern.

"This will be the critical piece when we're trying to get to a global market," he said.