New EU Hydrogen Policy: The Good, The Bad, & The Expensive

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The European Union unveiled its third hydrogen policy last week. The first two versions emphasized hydrogen fuel cell technology for passenger cars. The latest revision soft-pedals that ambition significantly while putting more emphasis on using hydrogen to reduce carbon emissions from steel making and cement.

The COP26 climate summit last month made it crystal clear that the world’s industrialized nations are not doing nearly enough to reduce their carbon and methane emissions. Suddenly, hydrogen is being seen as the magic bullet that will slay the climate crisis dragon once and for all. It’s true; it could do so if it were available in abundance from climate-friendly sources at a price that was affordable. Today, only one of those parameters is correct.

According to the IEA, the world consumed about 90 million tons of hydrogen in 2020 — virtually all of it made from methane, one of the most powerful of all greenhouse gasses. The current market price of such “gray” hydrogen is around €2.00 ($2.28) per kilogram. Green hydrogen can be made by passing a strong electrical current through water to split it into its component molecules, hydrogen and oxygen, but the cost is roughly triple that of grey hydrogen.

In remarks in Brussels last week, European Commission president Ursula von der Leyen said that by 2030, green hydrogen could be produced at a cost of around €1.80 per kilogram, which would make it less expensive than grey hydrogen. “This goal is within reach,” she said, according to Reuters.

“This new partnership builds on years of cooperation promoted by the Fuel Cell and Hydrogen Joint Undertaking,” she said, according to Euracitiv. “Clean hydrogen will have a central place in the climate-neutral economy of the future,” von der Leyen said, citing the EU’s leadership position in the manufacturing of new-generation electrolysers designed to be powered by renewable energy. “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,” she added.

There’s only one problem. To reach the goal of under €2 per kilogram hydrogen, Europe will need to have 80 GW of electrolyzers in place by 2030. Today, there are only 0.3 GW of electrolyzers available worldwide, according to the IEA. EU climate policy chief Frans Timmermans isn’t worried. “The stars are made of hydrogen, so let’s reach for the stars,” he said.

Where Will The Electricity Come From?

It should be as plain as the face on your nose that an electrolyzer needs electricity to work its magic. Where will that electricity come from? If it’s from methane or coal, the emissions from generating it could outweigh the benefits of green hydrogen. Nuclear isn’t much better. (You can add your pro-nuclear rant in the comments.) Most green hydrogen advocates blithely assume all the world needs to do is massively overbuild its solar and wind resources. If that happens, the electricity generators will be begging people to use all that excess electricity and will slash prices to make that happen. That assumes renewable energy developers are dumb enough to invest in money-losing ventures.

Transport and Environment says the EU plan will cause electricity prices to rise at a time when they are already at historically high levels due to a shortage of methane/unnatural gas.

“The EU’s plan to mandate green hydrogen in the EU energy mix by 2030 could drive up demand for electricity by almost one-fifth…..This would heap pressure on electricity demand at a time when energy prices are at an all time high. Any increase in hydrogen production is reckless without additional renewables.

“The European energy grid is gradually decarbonizing with more renewables and less coal and gas powered electricity. But without additional renewables tied to hydrogen targets, the EU’s plan will likely result in renewables being diverted from the grid and undercut the emissions savings from electric vehicles by making the grid dirtier. With gas the most common marginal fuel to plug gaps, this strategy would be punishingly expensive with gas prices so high.”

Geert Decock, electricity and energy manager at T&E, says, “The EU is playing a high risk hydrogen strategy. We do need hydrogen for ships and planes, but it is reckless to heap unnecessary pressure on wind and solar when clean electricity will be needed to power the growing number of electric cars and heat pumps for homes.”

The T&E analysis finds the EU’s green hydrogen plan would increase demand for electricity by an amount equal to the total energy usage of France. As a result, more renewable electricity in 2030 would be used to create hydrogen than all the electricity consumed by battery cars, buses, and trucks in that year. The group claims making hydrogen for fuel cells would consume 4 times as much energy as the electricity needed to power a battery-electric car.

Geert Decock concludes, “The EU must ensure that any hydrogen production is coupled with new renewable energy generation. Otherwise today’s high gas and electricity prices will feel like a bargain compared with what’s to come.”

Fuel Cell Cars Aren’t Dead Yet

Despite all the happy talk about low cost green hydrogen for industry, the dream of cars powered by hydrogen fuel cells refuses to die. The new Alternative Fuels Infrastructure Regulation, which goes along with the new EU hydrogen scheme says, “refueling stations must be accessible at least every 150 kilometers along our car Trans-European Transport (TEN-T) network by 2030,” Adina Valean, the EU’s transport commissioner, told the press last week.

The TEN-T network is an EU project to build a system of roads, railways, airports, and water infrastructure. Every node on the TEN-T system will be required to have one hydrogen refueling station “to serve both trucks and cars,” Valean said at the EU Hydrogen week on 1 December. “This would create a sufficiently dense network of hydrogen refueling stations to ensure adequate cross-border EU connectivity and to support the 60,000 hydrogen lorries that we envisage seeing on the EU roads by 2030,” she added.

The TEN-T program will receive €1 billion from the EU’s Horizon research funding and another €1 billion from Hydrogen Europe, an industry group that included Airbus, BMW, BP, and Iberdrola, along with more than 300 other corporations. Climate activists continue to insist that hydrogen is a pipe dream created by fossil fuel companies as a way to dress up their public image while continuing to pollute the Earth with millions of tons of carbon and methane emissions. They have a point.