If European countries want to be a leader in the emerging market for green hydrogen, they would be better served to work together as opposed to working alone.
After enduring months of a global health pandemic that has unleashed a profound economic crisis, Europe should not lose the opportunity to leverage its recovery plans to kick-start a clean hydrogen society.
Success is possible, but this transformational effort will require close coordination between policy, technology, capital, and society – to avoid falling into the traps and inefficiencies of the past. Only by working together, can the European Union become a global leader in clean hydrogen innovation, and simultaneously contribute to the EU’s climate and energy security goals, a stronger economy, and a more integrated union.
As countries like China, South Korea, Japan, and most of Europe pledge to remove nearly all CO2 emissions from their economies within the next forty years, the spotlight has moved to the deep decarbonization of all energy sectors and revived interest in clean hydrogen. While hydrogen has been a staple in the energy and chemical industries for decades, renewable hydrogen is enjoying unprecedented political and business momentum as a versatile and sustainable energy carrier that could be the missing piece in the carbon-free energy puzzle.
[Con la colaboración de Red Eléctrica de España]
Hydrogen produced from renewable electricity by splitting water has a variety of potential uses, both in mobility and stationary applications, and most importantly the potential to tackle hard-to-abate emissions in sectors, such as iron and steel production, high-temperature industrial heat, aviation, shipping, long distance road transportation and heat for buildings. which account for over one fourth of global CO2 emissions.
Hydrogen experienced a short-lived wave of enthusiasm in the early 2000s that ended in disillusionment, but a fast-growing number of new investments supports more bullish expectations of clean hydrogen becoming a game-changer in accelerating the transition to a low carbon economy.
Renewables are widely perceived as an opportunity to break the hegemony of fossil fuels-rich states and to democratize the energy landscape. Virtually all countries have some access to renewable resources (e.g., solar and wind power) and could thus substitute foreign supply with local resources. Our research shows, however, that the role countries are likely to assume in future renewable hydrogen systems will be based not only on their resource endowment but also on their policy choices.
This is evident also in Europe, where renewable resources vary significantly between member states. Many countries lack either the resources or the land availability required to produce renewable hydrogen at scale. As a result, the future geopolitical realities of resource-poor countries in Europe might look very similar to the present ones, as energy import dependencies may continue.
A narrow focus on short-term cost considerations could drive European countries to implement national roadmaps, with little or no coordination among member states. As each country tries to secure renewable hydrogen supplies at the lowest possible cost, regional markets could emerge. North African countries, such as Morocco, are also well-situated to act as key suppliers of renewable hydrogen to the EU. Furthermore, flexibility of supply concerns could be addressed via shipping from resources rich regions, like North America.
On the other hand, if economic cooperation and energy security were to be prioritized, the EU could meet most of its hydrogen demand internally. Countries like Spain and France, have the potential to develop their renewable hydrogen industries beyond domestic production needs and thus to export surpluses. While these nations lack the renewable resources potential to become major global export champions, they could still thrive as regional exporters. Demand for renewable hydrogen could rapidly grow thanks to coordinated policies, encouraging cross-national trade and the deployment of enabling infrastructure at scale, giving rise to a fully functioning European clean hydrogen market and deepening integration of the Union.
While all these options would accelerate the EU transition to low carbon energy systems, the economic and geopolitical implications are glaringly different. In the end, the actions of the Commission and the member states will determine which scenario will unfold. But while Europe is still paying an unacceptable price for lack of true coordination among members states during the Covid-19 pandemic, it is concerning to see that the future of EU energy systems is being decided at the national level, yet again.
In an increasingly competitive world, renewable hydrogen offers a unique opportunity. Making it a significant part of the EU future energy mix will not be easy; requiring appropriate policies and market structures aimed at spurring innovation along the value chains; scaling technologies while lowering costs; and deploying enabling infrastructure at scale. Success is possible but will require a truly coordinated effort.
Will Europe unite behind renewable hydrogen or fall in the traps of the past?