EU to Drive Down Cost of Green Hydrogen

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe is aiming to drive down the cost of producing "green hydrogen" by more than two-thirds by the end of the decade.

In her keynote speech to the European Hydrogen Week event in Brussels, European Commission (EC) President Ursula von der Leyen said that the cost of green hydrogen could fall to less than 1.8 euro (US$2) per kilogram by 2030. Green hydrogen projects extract hydrogen from water using electrolysers powered by renewable energy. At the same time, the region will be aiming to produce up to 10 million tonnes annually. Today, industry estimates put the cost of green hydrogen at roughly 6 euro (US$6.80) per kilogram. Most of the world's hydrogen is produced using fossil fuels and "grey hydrogen", which is produced using natural gas, costing about 2 euro (US$2.26) per kilogram. The EU wants to push cleaner hydrogen, as the current production system results in very high emissions.

"Clean hydrogen will have a central place in the climate-neutral economy of the future," von der Leyen said. "And I am very proud of Europe's role as the world's clean hydrogen trailblazer. At the beginning of this year, more than 200 new hydrogen projects were announced globally--55% of them were in Europe. So it is a leadership position that we have built through years. For instance, the European Union started before the rest of the world to invest in a new generation of electrolysers, designed to be powered by renewable energy. As a result, Europe is now the world leader in patents and publications on this technology."

Industrial Info has been tracking a dramatic rise in hydrogen projects across Europe over the past year. However, many are small-scale projects, and while larger scale projects are in the pipeline, they may not be in place to reach the EC's ambitious goals. According to the International Energy Agency (IEA), global capacity of electrolysers doubled over the last five years, with about 350 projects currently under development and another 40 projects in early stages of development. If all these projects are realised, global hydrogen supply from electrolysers would reach 8 million tonnes by 2030. This is a huge increase from today's level of less than 50,000 tonnes but remains well below the 80 million tonnes required in 2030 to help reach the net zero emissions goal by 2050.

Around 70 million tonnes of dedicated hydrogen are produced today, 76% from natural gas and almost all the rest (23%) from coal, according to IEA data. Electrolysis currently accounts for 2% of global hydrogen production. Annual hydrogen production consumes around 205 billion cubic meters (m3) of natural gas (6% of global natural gas use) and 107 million tonnes (Mt) of coal (2% of global coal use)--most of the latter in China. Global hydrogen production today is responsible for 830 millions tonnes of CO2 emissions--equivalent to the annual CO2 emissions of Indonesia and the U.K. combined.

Von der Leyen added: "[Green hydrogen] is beginning to be competitive also from an economic point of view. Because of the current rise in gas prices we all see, green hydrogen today can even be cheaper than grey hydrogen. Our target should be to bring the cost below 1.8 euro per kilo by 2030. And this goal is within reach. We have to scale up clean hydrogen production, expand its applications, and create a virtuous circle where demand and supply feed each other and bring the prices down. That is the principle. This is without any doubt a global endeavour, but I want Europe to be leading the race."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.