Hydrogen - a priority for the new industrial revolution

Yesterday, president?Ursula von der Leyen ?and Executive Vice-President?Maro? ?ef?ovi? ?kicked off the highly anticipated Clean Transition Dialogues. The first dialogue was dedicated to #hydrogen with European Commission ?officials engaging with representatives from the?entire?#H2 ?value chain.

The new industrial revolution has started. No one doubts that #cleantech are at the core of this revolution. Sovereignty in building up these sectors is crucial.

It’s encouraging to see on the map of the International Energy Agency (IEA) on a global scale the projects on hydrogen all over the globe. They are mushrooming!

Europe is by far leading when it comes to the absolute number of projects. This is good. What’s the problem? The final investment decision is at 4% of all of these projects. 4%! The gap is tremendous.?

How can we overcome the situation?

The sector is broad as many parts of the value chain are represented. From the production of renewable energy and the translation into hydrogen over the transmission and transport of hydrogen, it’s carriers and derivatives towards the storage.

But also and especially the final use of hydrogen for the production of energy, for the use as a fuel in ?mobility and especially for the use as chemical feed stock in industry. Roughly 8 million employees are only represented by Hydrogen Europe with a turnover of more than €5 trillion annually.

But what is more important:

The hydrogen sector would generate 250,000 new jobs by 2030.?

However, we face the chicken and egg dilemma. We have now a robust legislative framework and we are grateful for the “fit for 55” achievements.

On more than 3000 pages we find more than thousand mentions of hydrogen.

However, stagnation of investments in hydrogen starts with the reluctance of off-takers.

The hydrogen bank helps to overcome the current funding situation which is characterised by many tools on different layers like regions, member states and the EU but are quite cumbersome and complex.

What we need is indeed a Swiss knife like way of funding whereby the hydrogen bank could serve as a one-stop shop. We are looking forward to the pilot auction expected for November. Yet, we need to move quite fast to the next auction as the necessary endowment exists in the ETS Innovation Fund.

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It also is extremely encouraging to see the achievements of the EU energy platform with regards to joint purchasing of gas. The experiences gathered by Maro? ?ef?ovi? ?are extremely valuable when it comes to the pooling of hydrogen demand in the future, the coordination of the infrastructure use the negotiating with international partners and hence joint hydrogen purchases. What we need is an auction that corresponds to this logic covering the extra costs by a contract for difference.

• In order to get there we need a fast implementation of the renewable energy directive possibly with a stronger guidance towards the member states.
• We also need a better understanding and also a flexible use of the different definitions of hydrogen both renewably produced or low-carbon hydrogen.
• The first auction which will be piloting the way as of end November shows already the right flexibility which we need in order to compete on global scale.
• Finally a certification scheme is key, we believe that something like a digital passport could pave the way!?

We have seen that the IRA initiated by President Biden has caused quite some attraction for European companies to simply go to the United States.

But it’s not only the US that is preparing for cleantech. China has started in 2020 when our European strategy on hydrogen was issued with a level of 10% of global electrolyser capacity. Today they have reached already 50%. This is fast and this is based on the well-known Chinese commitment. But also on taking care of keeping production in in China.

If we want to cope with this we need to come back to a good old principle that you highlighted in your State of the Union and we are grateful for that! ?Made in Europe!“

This means that sensitive technologies like electrolysers, like the whole fuelling process for hydrogen gaseous or liquid, like cracking and like producing synthetic fuels and gases based on hydrogen needs to be considered by qualitative criteria in funding.

To simply look at price criteria will not do the job and will open the doors massively especially to Chinese production.

We welcome the European Investment Bank (EIB) guarantee schemes for electrolyser producers. But honestly: The EIB needs to be bit more agile here and move faster – these instruments are needed now!

Ursula von der Leyen has nominated Mario Draghi as the mastermind of a future plan on EU competitiveness.

Mario Draghi witnessed an important meeting of the International Energy Agency together with the European Investment Bank but also the European Central Bank on how to push forward investments into cleantech needs.

It is crystal clear that the double digit billions per year that are needed especially to ramp up the infrastructure will not be invested if the right framework is missing.

• Global Gateway paves the way for Europe’s future in clean and green energy. We need to build up our own European hydrogen backbone, we have started already to consider a core backbone including of course not only pipelines but ports and industrial hubs.
• We need to consider clearly an infrastructure for massive storage of hydrogen and it’s carriers on big scale.
• We focus on the three corridors north sea, Mediterranean and future corridor from Ukraine.
• ?We see the global dimension but we also understand it needs investments.

A Green Capital Market Union with EU initiated green bonds has been put forward by the President of the European Central bank.

Europe will do ?whatever it takes“ to keep it competitive edge. Here, as an energy hungry region we have this moment right now, this is a ?whatever it takes situation“. It’s therefore of utmost importance to send the ride signals over the next weeks.