Here at H2 View, we recognise this movement is an important step in Europe’s move to greener solutions across a range of different sectors, and so, we will look at what we know from this joint declaration.
Following an agreement on the European Climate Law in spring 2021, a legally binding target of Net Zero greenhouse gas (GHG) emissions by 2050 for all EU Institutions and member states was set. Underpinning the agreement was another target – this focuses on reducing net GHGs by at least 55% compared to levels recorded in 1990, by 2030.
Additionally, following Russia’s invasion of Ukraine in February this year, a renewed push to ween Europe off Russian fossil fuels finally seems like it will follow through. With a near-total ban on EU states importing gas and oil, it appears the time for energy independence in Europe is now.
Given both challenges, current capacity of electrolyser manufacturers in Europe is estimated at 1.75GW per year. This will obviously require dramatic scaling up to meet the expected demand for renewable hydrogen.
Given the unprecedented challenge and significant industrial opportunity, electrolyser manufacturers in Europe must expand capacities to support the expected exponential growth, following Fitfor55 and RePowerEU policies.
The goal posts have now been set with hopes to achieve an annual electrolyser manufacturing capacity of 17.5GW in Europe by 2025. With increases on this initial capacity possible by 2030 in line with projected demand for renewable and low-carbon hydrogen.
Given this, the EU Commission’s RePowerEU has proposed a ‘Hydrogen Accelerator’, setting out to double the previous renewable hydrogen target to 10 million tonnes of annual domestic production, as well as an additional 10 million tonnes of annual imported hydrogen.
In doing so this could support several initiatives aiming to import hydrogen from neighbouring continents such as Africa, the Middle East and the Americas. This will greatly accelerate the scaling of global hydrogen production with demand set to soar with these increasing targets.
Challenges of meeting the objectives
The manufacturers outlined to the EU, three main barriers that prevent a rapid increase in electrolyser manufacturing capacities:
Incomplete regulatory framework, supporting large-scale deployment of renewable and low-carbon hydrogen
Need for large investments in the absence of certainty on future demand for electrolysers
Challenges related to integrated supply chains and the availability of components and raw materials at scale.
How they plan on meeting them
The commission has already renewed and updated some of its ambitious policies to encourage further production of electrolysers and in turn, hydrogen. It has also said it will regulate the availability of renewable electricity to renewable hydrogen projects.
It has acknowledged, that simplifying and shortening permitting procedures for renewable energy projects is of ‘paramount importance’ and the EU is expected to adopt a recommendation and a legislative proposal on accelerated permitting for renewable energy projects, including renewable hydrogen.
Access to finance
To support the ramp-up of European electrolyser manufacturing capacities, the European Commission will seek to support electrolyser manufacturing projects in its third large-scale project call under the EU Innovation Fund, planned for the second half of 2022.
The European Investment Bank (EIB) also stands ready to support hydrogen projects. The Bank has also developed collaborations with key sector associations and stakeholders. The commission will be continuing to work with the EIB to facilitate the financing of electrolyser manufacturing and deployment projects.
Supply chain integration
With an integrated European electrolyser supply chain only just emerging, the demanded upscaling will be dependent on supply chains. The European Clean Hydrogen Alliance will set up an ‘Electrolyser Partnership’ to bring together manufacturers and suppliers of components and materials within its existing structures of the alliance.
The European Commission is also committing to creating raw material partnerships. Additionally, the commission plans to work with stakeholders on strategic sourcing, processing, and recycling of raw materials.
Electrolyser manufacturers have also committed to working with the commission to diversify and tackle dependency of key raw materials and chemicals within EU industrial strategy framework. Manufacturers have also committed to research into reducing dependence on raw materials in electrolysers and implementing appropriate recycling.
Given the significance of this declaration, and the depth of detail both manufacturers and the commission have gone to, it seems clear that the floodgates for hydrogen production in Europe are opening.
Whether the solutions providing surrounding regulation, finance and supply chains will go far enough remains to be answered, however, it appears to be a huge leap forward in Europe’s effort in reaching its climate targets.
An interactive platform for specialty talks on the latest hot topics and key trends, given by influential industry figures and authorities.
With the help of an actively engaged audience, there is opportunity for a collaborative Q&A session with discussions, debates and live feedback.