EU TARGETS

IS THE EU 2030 HYDROGEN TARGET ACHIEVABLE?

by Hannah Wintle

The EU are aiming to reach a domestic production of green hydrogen of 10 Mt by 2030, as laid out in the REPowerEU plan in May 2022. With seven years left on the clock, reaching these targets will require an unprecedented acceleration in the deployment of electrolysers and renewable electricity capacities, a recent report concluded.

Jointly authored by Zenon Research and Archery Strategy Consulting, the report highlighted that to meet this goal, the EU would need to nearly double its production capacity each year until 2030 in order to meet its target, based on the 0.012 Mt of hydrogen from water electrolysis produced in 2020.

While there is a strong momentum for the increased use of electrolysis – the European Commission has approved €10.6bn worth of public investments into two programmes, with 91% of the projects included using electrolysis – the report asks whether this is enough to achieve the EU’s hydrogen ambitions.

Julien Lamarque Lacoste, Partner at Archery, explained that while reaching this target is a challenge, it isn’t impossible.

He added: “What we have to think of when we think about H2, is that it’s not just compressing and substituting one source of power generation for another one, which is what happened in wind and PV in the beginning of the ramp up.

“Simultaneously, you also have to stimulate the demand in all of the value chain, so it's a faster, more complex ecosystem to build. This is the challenge we have in front of us.” There will need to be a sufficient supply of renewable electricity

It is estimated that to produce 10 Mt of green hydrogen, the EU would need between 500 and 550 TWh of renewable electricity, translating to 160-175 GW of solar power capacity and 120-135 GW of wind power capacity.

With another EC goal to more than double its generation of renewable electricity by 2030, solar capacity must continue to grow by at least 16% per year, and wind capacity growth rate must double.

However, of this additional electricity, up to 36% would be needed to power electrolysers.

Thomas Boigontier, Analyst at Zenon Research and co-author of the report said: “It's a lot of electricity. We need to choose which sector we prioritise because the EU sets rules and targets for the decarbonisation of multiple sectors.

Julien Lamarque

Partner Archery

“We have to look at this as a system and not just sectors, because it might be possible that we won't have enough renewable electricity for all the things we plan.”

Electrolysis capacity will need to significantly scale up

The electrolyser deployment rate will also need to significantly increase, achieving an average 83% growth rate per year to meet EC targets.

Such a growth is precedented in the energy sector, with solar panel deployment growing by 75% between 2003, and 2011. The two technologies also share common features, such as their standardised and mass-produced nature.

However, electrolyser capacity growth rates would still have to surpass those of solar panels to keep in line with the 10 Mt target, although the report highlights that political will to develop the industry, and the modular nature of the technology could facilitate such a growth.

Furthermore, the Ukraine war has accelerated the phase out of natural gas, and as such, many European countries are supportive of the development of electrolyser technology.

This support has triggered a pipeline of projects under development, but one that would still only produce less than 60 GW by 2030.

Carbon capture could provide the solution to meeting EU targets

In an attempt to offset the aforementioned limitations facing green hydrogen production, the report posits complementing it with other methods of producing low-carbon hydrogen.

Manon de la Motte Saint Pierre, Archery Project Manager, commented: “We tried to study other solutions, complementary solutions, because we think that actually we need to combine different technologies to achieve low-carbon hydrogen production for all our purposes.

“If you look at the available technologies by the end of the decade, only a few of the different hydrogen production methods are mature enough to be available and tangible by the end of the decade.”

Considered the ‘main viable options by 2030’, the report offers possible solutions in steam methane reforming or autothermal reforming combined with carbon capture and storage (NG+CCUS).

Today, announced NG+CCUS projects would represent no more than 600 kt hydrogen by 2030, but it is hoped that with a greater number of projects, a positive industrial dynamic could develop, which would shorten lead times of future CCUS projects and lower costs through economies of scale.

Moreover, financial support is starting to be made available for CCUS solutions, with the EU innovation fund selecting two H2 production + CCUS projects and four CCUS projects for a subsidy in 2021. In 2022, two other calls for tenders were launched, which could provide subsidies to other CCUS projects.