The European Commission and a group of leading industrial companies announced on Thursday a plans to rapidly scale hydrogen production capabilities in Europe, including a commitment to grow electrolyser manufacturing capabilities by 2025.
According to a Joint Declaration signed by Commissioner for Internal Market Thierry Breton and the industry CEOs, the initiative comes as Russia’s invasion of Ukraine has strengthened the need for a green energy transition to reduce dependency on Russian fossil fuels.
“Clean hydrogen is indispensable to reduce industrial carbon emissions and contribute to our energy independence from Russia. We have no time to lose, which is why this European electrolyser summit is so opportune.”
Hydrogen is viewed as one of the key building blocks of the transition to a cleaner energy future, particularly for sectors with difficult to abate emissions, such as aviation, transport and steel production, in which renewable energy solutions such as wind or solar are less practical. Despite being the most abundant element in the universe, however, there are no pure hydrogen deposits on Earth and it must be extracted from other materials. Around 90 million metric tons of hydrogen are produced annually, primarily extracted from natural gas through steam methane reforming. The extraction process often creates pollutants and GHG emissions. Significant investments are required to develop clean extraction processes, such as green hydrogen, which uses a renewable energy-powered electrolysis process to extract hydrogen from water.
The European Commission has proposed a Hydrogen Accelerator, envisioning scaling renewable hydrogen domestic production to 10 million tons, along with 10 million additional tons of hydrogen imports. According to the Commission, reaching this level of production would require a massive scale-up of electrolyser capacity to at least 90 GW/year from current levels of 1.75 GW, and manufacturers have set an objective to reach 17.5 GW by 2025, with further increases targeted for 2030.
The declaration outlines a series of bottlenecks facing the industry in its efforts to scale up electrolyser capacity, along with the Commission’s commitments and initiatives to address these obstacles. Bottlenecks include an incomplete regulatory framework to support large-scale deployment of renewable and low-carbon hydrogen, the need for major investment in the absence of demand certainty, and supply chain, and raw materials and component availability challenges.
To address these issues, the declaration highlights a series of actions by the Commission, including ensuring that regulation will support a fast and affordable ramp-up of the market for renewable hydrogen, the adoption of a legislative proposal to accelerate permitting for renewable energy projects, including renewable hydrogen, an assessment of state aid notification for hydrogen projects as a matter of priority, developing raw materials partnerships with other countries, and working with stakeholders on raw materials dependency issues. The manufactures also committed to apply only with high quality project proposals aligned with EU climate targets. The actions also include the establishment of an “Electrolyser Partnership” bringing together electrolyser manufacturers and suppliers of components and materials within the existing structures of the European Clean Hydrogen Alliance.
“Today, industry agreed to a tenfold increase in electrolyser manufacturing capacities in Europe. The Commission will support this important industrial upscaling for an industrial leadership in the clean energy technologies of the future.”