Accelerating Europe’s Hydrogen Economy

Background

Hydrogen, the lightest existing molecule, is a major building block in chemistry and widely used as a raw-material by the chemical sector. It is a potent but volatile source of energy, meaning that its use and handling should be done carefully. The climate potential of hydrogen is linked to the used source and production method that all can vary in greenhouse gas intensity. 

The European chemical industry is a major hydrogen consumer and producer

As the Commission’s latest data shows, the EU Chemicals Industry is a frontrunner in the clean Hydrogen Economy. Hydrogen is already massively used by the chemical industry as feedstock, for example, but the conventional production method generates a lot of emissions. The sector already has the technical abilities to produce climate-friendly hydrogen via alternative production methods, like with fossil-free energy or from natural gas without CO2  emissions, but the cost of such production remains too high compared to the conventional hydrogen production. Cefic therefore welcome the increase in the size of the Innovation Fund as well as the introduction of additional supporting instruments such as Carbon Contracts for Difference, as introduced in the ‘Fit for 55’ package and the ETS revision. The development of a hydrogen economy where the production of climate-friendly hydrogen is affordable and supported by effective infrastructure will be crucial to unlocking the potential of climate-friendly hydrogen in Europe. 

Cefic’s position

The European chemical industry has the ambition to become climate neutral by 2050. We agree with the European Commission that accelerated deployment of a clean hydrogen economy will be essential to make the energy transition succeed. Europe needs a Hydrogen Strategy that will scale-up the production and use of climate-friendly hydrogen, helping the chemical industry to significantly reduce its GHG footprint. For this strategy to deliver, Cefic calls on the European Commission to consider the following: 

• The cost of production of climate-friendly hydrogen needs to be reduced to compete with current sources of energy production.
• Several types of incentives could support diverse production methodologies, onsite and offsite, but should guarantee industry an internationally competitive supply of energy and feedstock. No restrictions should be imposed on the origin of hydrogen for the users of hydrogen for energy and feedstock purposes
• A solid and credible certification framework should be created to track the developments in hydrogen production and finance climate-friendly hydrogen production.
• Once the growth of climate-friendly hydrogen starts to accelerate, regulators and competition authorities will have to ensure that the hydrogen market is subject to a sufficient degree of competition.
• Infrastructure should be carefully planned to safeguard gas quality requirements, allow safe and efficient transport, and build on the potential of hydrogen as a storage solution.
• Support in research and innovation will encourage progress on innovative technologies such as methane pyrolysis and water photolysis.

Cefic has answered to the Public Consultation on the EU hydrogen strategy, see our reply here.