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European renewable hydrogen producers call for transition period on additionality


Strict adherence could hamper green H2 development

Temporary grace period to recognize timing issues

Enel, EDPR confident of cost parity by 2030

The EU's methodology defining how renewable hydrogen is produced should include a transition period on the need to prove additionality, sector leaders told S&P Global Platts EMEA Hydrogen Markets conference Nov. 25.

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Under European Commission taxonomy proposals, electrolysis-produced hydrogen would only be considered to be renewable if the feedstock was from a dedicated new renewable source, additional to existing assets.

"We believe the context today justifies a transitional period where some of the conditions could be relaxed," said Ana Quelhas, managing director of hydrogen at Portuguese utility EDPR.

"Longer term this won't be an issue but at first we should relax some of the conditions currently on the table," she said, noting the challenge of aligning project timing and geography for electrolysis and renewable plants.

The sector is concerned that longer lead times for new renewables versus electrolyzer installation will hamper development of green hydrogen.

"Additionality is a requirement, but a grace period would be useful to avoid a barrier to green hydrogen [from slow deployment of new renewables], especially in some countries like Italy," said Paola Brunetto, the head of Enel's hydrogen business unit.

Furthermore, it should be possible to use curtailed renewables from existing assets to produce green hydrogen, although Brunetto acknowledged this would not provide a steady stream of power for efficient electrolysis.

EDPR's Quelhas said electricity input costs represented more than half of current renewable hydrogen costs, with a 10%-20% decrease in this component foreseen to 2030.

"It is in the equipment capex component, however, where we expect to see the greatest reduction, of 40% to 50% in the next decade, helping to bring down the overall cost of hydrogen by 30% to 40%," she said.

Today EDPR was working within a cost range of Eur3-5/kg renewable hydrogen, she said.

"By 2030, possibly before, we expect cost parity with grey hydrogen in the best locations," she said.

Green hydrogen would be the cheapest production pathway by 2030, Enel's Brunetto agreed.

"By investing in innovation, electrolyzers will become more efficient, requiring less electricity to produce the same amount of hydrogen," she said.

Finally on transport costs, Marco Betting of Arnhem-based specialist in hydrogen compression, HyET Hydrogen, said that using an electrochemical process to compress hydrogen was cheaper and more reliable than using mechanical compressors.

"We see a steep cost decrease opportunity for electrochemical compressors when produced at scale," he said. "This will allow us to transport hydrogen and extract hydrogen from pipelines at a few tenths of a euro cent per kg."

The immediate challenge was keeping up a steep hike in demand for compressors, with HyET Hydrogen in the process of scaling up production capacity, he said.