The European Commission's 2030 renewable hydrogen targets will require huge amounts of renewable power generation, amounting to around half the EU's total renewables generation in 2019, according to data from S&P Global Platts Analytics.
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The EC in July unveiled one of its most ambitious legislative packages ever, publishing plans for new laws across numerous sectors designed to achieve its target of a 55% cut in greenhouse gas emissions by 2030 compared with 1990 levels, the so-called 'Fit for 55' program.
The EU has also set a 40-GW electrolyzer capacity target by 2030, producing 10 million mt/year of renewable hydrogen. Such volumes would require additional renewable power generation amounting to 477 TWh, Platts Analytics said in a report Aug. 13, over half of total EU renewable generation in 2019.
"Achieving the 10 million mt target would require a higher ramp-up of renewable electricity for hydrogen to 2030 than that of the entire power sector in the 2010-2020 period (around 380 TWh)," it said.
Fit for 55
Specific to hydrogen, the EU's Fit for 55 proposals include a 50% renewable share for hydrogen used in industry and a 2.6% target for renewable fuels of non-biological origin (RFNBO) in transport by 2030. Hydrogen and its derivatives are expected to make up most of the RFNBO.
Platts Analytics estimates that around 11 million mt/y of hydrogen would be needed to meet the demand targets, with around 5.2 million mt going to industry and 5.8 million mt to transport.
However, the nature of the targeted sectors means much of the hydrogen will need to be converted to ammonia, leading to large conversion losses, resulting in lower final energy use or the need for higher input volumes.
Current EU industrial sector hydrogen demand is around 8 million-10 million mt/y, with 45% for refining, 38% for ammonia production and 8% for methanol.
In transport, the EU's focus for hydrogen is on the aviation and maritime sectors, where there is limited potential for direct electrification.
"While the industry sector has a focus on replacing existing fossil hydrogen, the transportation sector target will lead to deployment of new technologies such as fuel cells and adoption of hydrogen as a new fuel," Platts Analytics said.
The package also included measures for hydrogen in marine fuels, hydrogen fueling stations every 150 km along the core Trans-European Transport Network routes and tax incentives for the use of renewable and low-carbon hydrogen for end consumers.
In addition, the legislative proposals target tighter CO2 emissions standards for cars and vans, which could support the development of hydrogen fueling for heavy-duty vehicles, and revisions to the EU emissions trading scheme.
Renewable and low-carbon hydrogen production will be eligible for free allowances under the EU ETS proposal.
Questions have been raised over how the EU plans to meet the 10 million mt/y production target, given the utilization rate limitations of running electrolyzers from renewables, and the vast amounts of power needed to reach the target.
The EU has emphasized requirements that generation for green hydrogen must come from "additional" renewable power or curtailed existing capacity, with scope for possibly using repowered renewable facilities.
Platts Analytics said the potential surplus wind and solar for grid-connected electrolyzers in major European markets would be less than 6 TWh/y by 2030.
A source in the EC said it was focused on building hydrogen capacity rapidly, and anticipated that most electrolyzers would be connected to the grid, with power purchase agreements and guarantees of origin to ensure the renewable credentials of the electricity used.
The source said the EC's forthcoming revisions to the Renewable Energy Directive would include amendments to definitions of renewable energy and the additionality requirements for electrolyzers.
The ramp-up of hydrogen would be gradual, the source said, as would the build-out of additional renewables capacity.
The EC envisaged industrial applications would provide the first-use cases for renewable hydrogen, with a later expansion into transport, while the business case for inter-seasonal power storage from hydrogen would come at a later date, the source said.
A policy framework for hydrogen would be completed in December, the EC said in July.
S&P Global Platts assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur5.74/kg ($6.73/kg) Aug. 20 (Netherlands, including capex). PEM electrolysis production was assessed at Eur7.08/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur3.12/kg.
Proposed electrolyzer projects due online by 2024 in the EU amounted to 5.2 GW at the start of July, according to the Platts Analytics Hydrogen Production Asset Database, already approaching the EU's target of 6 GW by that date.
A project survey by the European Hydrogen Alliance listed 997 projects proposed across the EU and its close neighbors, equating to a potential 9 million mt of hydrogen production by 2030, EC Energy Commissioner Kadri Simson said July 15.