latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/france-launches-8364-7b-clean-hydrogen-plan-with-early-focus-on-industrial-emissions-60260381 content esgSubNav
In This List

France launches €7B clean hydrogen plan with early focus on industrial emissions


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

France launches €7B clean hydrogen plan with early focus on industrial emissions

"Our ambition is simple: To make the France of tomorrow the champion of carbon-free hydrogen." With these words, the European Union's second-largest economy launched its hydrogen strategy on Sept. 8, tracing the strategic priorities laid out by the bloc's central plan for hydrogen deployment drawn up in July.

The national strategy will see €7 billion invested in clean hydrogen infrastructure and research by 2030, with an early focus on decarbonizing sectors which already use hydrogen made from fossil fuels, also known as grey hydrogen. These are the petroleum and chemicals sectors as well as other industries using smaller quantities of hydrogen, such as fertilizer makers.

The plan calls for 6.5 GW of electrolysis capacity to be developed by 2030 to help decarbonize those clusters, with the introduction of green or carbon-free hydrogen in heavy goods transport also part of the plan. The switch to non-fossil hydrogen by industrial users will be subsidized. The French strategy speaks specifically of carbon-free hydrogen, leaving open the possibility of including nuclear power in the production process. The country's power mix is dominated by nuclear generation.

Government tenders starting this year will allocate support to pilot projects and subsequently the development of a large hydrogen hub or electrolyzer production facility. The latter tender, penciled in for 2021, will be designated as an "important project of common interest," a platform created by the European Union for industrial-scale clean energy projects. France will contribute €1.5 billion to this venture, which will be integrated into the European hydrogen value chain, the government said.

Another key pillar of the strategy will be research and development in hydrogen technologies to help broaden the pool of use cases for carbon-free hydrogen. This includes the use of hydrogen in power generation, steel production, transportation and gas networks.

Placing early strategic importance on lower hanging fruits such as existing hydrogen users wins economies time to build up storage and transportation capacities for the fuel, a key challenge in the quest for scaling up usage and creating a market for hydrogen. With a net-zero emissions target across its economy set for 2050, France, like other industrial nations, is betting on hydrogen to help decarbonize hard-to-abate sectors with limited potential for electrification.

SNL Image
The green hydrogen plan is set to curb emissions equivalent to Paris' yearly footprint.
Source: Thinkstock

If the strategy is implemented according to plan, France will cut its carbon emissions by more than 6 million tonnes by the end of the decade, the government said. That is the equivalent of all of Paris' annual emissions.

A European matter

According to dpa-AFX, French lawmakers are considering entering a multibillion-euro hydrogen alliance with neighbor Germany, which has already launched its own hydrogen strategy and is seen as one of Europe's largest future users of the fuel given its substantial industrial base.

"Hydrogen is a European matter," the French environmental transition ministry wrote in its strategy paper, and part of that will be financing. France intends to draw on the Next Generation EU investment vehicle to help fund its hydrogen development.

French policymakers will be comparing notes with leaders from across the EU throughout the implementation. "France's strong involvement in the Clean Hydrogen Alliance will ensure a good alignment between the French strategy and the work carried out at the European level," the government said. The alliance was set up in tandem with the EU's hydrogen strategy, and is made up of business and policy leaders tasked with developing a regulatory framework for a future hydrogen economy in the union.

France's 6.5-GW target will likely put the European Union well on its way to achieving 6 GW of installed electrolyzer capacity across the bloc by 2024. The pace will need to be stepped up in subsequent years, if a 40-GW installation goal for 2030 is to be achieved across the union. Germany is planning to set up 5 GW, the Netherlands between 3 GW and 4 GW, and Spain is targeting 4 GW of electrolyzer capacity by the end of this decade.