The European Union (EU) is moving forward with its intentions to develop a hydrogen economy. The European Commission (EC) approved on September 21st, up to 5.2 billion euros (roughly $5.2 billion) in public funding for hydrogen projects – the second round of investment in hydrogen deployment from the EC.
The initiative called IPCEI Hy2Use is said to unlock a further 7 billion euros of investments from the private sector. According to EC, IPCEI Hy2Use will involve 29 businesses that will participate in 35 projects.
13 member states will supply the funding – Austria, Belgium, Denmark, Finland, France, Greece, Italy, the Netherlands, Poland, Portugal, Slovakia, Spain, and Sweden.
The public funding follows and complements IPCEI Hy2Tech – another initiative by the EC that involves €5.4 billion of public funding for the development of novel technologies for the production, storage, transportation, and distribution of hydrogen, along with applications in the mobility sector. IPCEI Hy2Tech was approved in July 2022.
IPCEI Hy2Use, on the other hand, will focus more on the construction of large-scale electrolyzers and transport infrastructure, for the production, storage, and transport of renewable and low-carbon hydrogen, according to the Commission. It will aim to develop more sustainable technologies for the integration of hydrogen into the industrial processes of multiple sectors like glass, cement and steel.
EU And Hydrogen Deployment
On March 8th, the European Commission issued a contingency plan called REPowerEU that outlines the measure it plans to take to replace Russian oil and gas by 2030. Hydrogen took part in the strategy of the bloc to replace Russian supplies.
The EU outlined the production of an extra 25 to 50 billion cubic meters of hydrogen to replace natural gas by 2030.
Hydrogen is also part of the EU’s clean energy transition. In July 2020, the Commission published its EU Hydrogen Strategy, setting ambitious goals for clean hydrogen production and use, and launched the European Clean Hydrogen Alliance, bringing together the European hydrogen community.
Additionally, the EC announced last week the creation of a new €3 billion European Hydrogen Bank that will “bridge the investment gap and connect future supply and demand” as presented by the European Commission President Ursula von der Leyen.
The hydrogen economy will require building up extra production capacity, equipment, pipelines, and storage depots over the next several years either for producing hydrogen fuel within the block or for importing it from overseas.
According to DNV, the policies and scaling of hydrogen production could enable it to take 11% of the energy mix by 2050. Goldman Sachs has more ambitious projections and claims green hydrogen alone could eventually make up 15% of the energy system.
To develop the hydrogen economy, the EU will need an interconnected system of power networks and hydrogen pipelines to substitute hydrocarbon imports from low-cost producers like Iberia, parts of Southern Europe, and the UK.
The measures taken by the EU to increase hydrogen development are estimated to translate into a reduction of dependency on energy imports, higher energy efficiency, and lower costs for the average European consumer.