Focus EU hydrogen targets on sector demand not supply: EC official

Any EU targets for hydrogen should be focused on increasing demand in specific sectors, such as chemicals, steel and transport, rather than on supply shares, a European Commission official said Wednesday

That was because hydrogen is likely to develop differently across Europe, creating different national demands and needs, Klaus-Dieter Borchardt, deputy director-general at the EC's energy department, told a Florence School of Regulation webinar.

Scaling up hydrogen production only made sense if demand for it also increased.

"So if we do see targets, I see them on the demand side," Borchardt said. "I do not see EU production targets."

The EC is reviewing all relevant EU legislation to see what needs to be changed to help the EU achieve net-zero greenhouse gas emissions by 2050, including its 2030 targets for emissions, renewable energy and energy efficiency.

It is also working on a specific gas decarbonization legislative package, likely to be unveiled next year, and a smart sector integration strategy, tentatively planned for June 24.

The integration strategy is to look at how to achieve benefits from closer links between gas, electricity and other sectors, such as transport.

The EC sees hydrogen playing a key role in helping the EU achieve its 2050 target, in particular by cutting emissions in hard-to-abate heavy industry and transport sectors.

Recovery plan support

The EC is also working on a special strategy for hydrogen investment as part of an EU economic recovery plan prompted by the coronavirus pandemic, Borchardt said.

The aim is to earmark money to help prepare industry to use more hydrogen, and to help scale up the electrolysers needed to make "green" hydrogen from renewable power, he said.

The current small-scale electrolysers can use excess renewable power that might otherwise have been curtailed.

"But if we really scale up electrolysers, there won't be enough excess electricity for them," Borchardt said.

That meant their operators would have to buy renewable power, and so the EU would need very high volumes of competitively priced renewable power to make green hydrogen viable at scale.

EU leaders are to discuss the key principles of the recovery plan, along with the EU's 2021-2027 budget, on April 23.

More support options

Other support options at EU level for hydrogen include the Important Projects of Common European Interest scheme, which makes designated projects eligible for faster state aid approval and access to EU funding.

The EC also plans to support hydrogen through a Clean Hydrogen Alliance, as part of its European Industrial Strategy unveiled in March.

The alliance is to bring together governments, regulators, industry and investors to work on decarbonizing industry more quickly using hydrogen.

Borchardt said any national support schemes for hydrogen would likely treat green and blue variants differently, with green hydrogen potentially needing longer-term support.

Blue hydrogen is made from natural gas with carbon capture and storage or use, making it very low carbon.

The EU needed to develop clear definitions of the different types of hydrogen, Stefaan Vergote, adviser for emission reduction strategies, research and innovation at the EC's climate action department, told the webinar.

The goal is to be able to certify different low carbon gases according to their greenhouse gas emissions, Vergote said.

The EC would also look at how to ensure a level-playing field for these gases, for example by tackling unfavorable tax treatments or grid tariffs, he said.

The EC is reviewing the EU energy taxation directive and plans to propose an update aligned with the 2050 net-zero emissions goal in June 2021.