Projekt

The potential of hydrogen for decarbonising EU industry

Given the vast potential for renewable electricity generation, the production of renewable hydrogen, i.e. using renewable electricity for producing hydrogen via water electrolysis, is seen as a promising option for decarbonising EU industry, in particular the hard-to-decarbonise energy-intensive sectors. Even more, transforming the EU’s energy system to a hydrogen economy is perceived to provide benefits with respect to job creation, economic growth, innovation and air pollution. Accordingly, the European Commission has published its Hydrogen Strategy in 2020 with the aim to boost hydrogen use in the industry and transport sectors, while fostering the uptake of renewable hydrogen production. However, there are huge economic implications for the current stock of production technologies, the energy system and operational costs. The infrastructure required is another aspect that has not yet been resolved. The upcoming STOA study 'The potential of hydrogen for decarbonising EU industry' will take stock of the current situation with respect to the realization of the EU Hydrogen Strategy and to identify policy options addressing gaps in the current hydrogen policy landscape. The final report will be presented to the STOA Panel of the European Parliament in October 2021.  

The EU aims at becoming the first climate-neutral political entity by 2050, as announced in its Strategic Long-Term Vision in 2018 that is to be enshrined in the European Climate Law. To this end, the EU has developed a new growth strategy, the European Green Deal (European Commission 2019a), which is meant to make the EU the global leader on green technologies, while ensuring economic growth and a just transition. Experts and researchers agree that reaching greenhouse gas (GHG) neutrality will require the decarbonisation of the whole economy.  Some sectors are assumed to be harder to decarbonize than others. In particular, this applies to the aviation and navigation sector but also to heavy industry (among others, the production of steel, basic chemicals and cement). In these sectors, there is a need for renewable fuels, as full electrification is expected not to be feasible.

Given the vast potential for renewable electricity generation, the production of renewable hydrogen, i.e. using renewable electricity for producing hydrogen via water electrolysis, is seen as a promising option in this regard. Moreover, hydrogen offers a much larger potential for storing surplus renewable electricity, compared to pumped hydro and batteries. Therefore, the production and use of renewable hydrogen is seen as a key lever for the decarbonisation of the hard-to-decarbonise sectors. Even more, transforming the EU’s energy system to a hydrogen economy is perceived to provide benefits with respect to job creation, economic growth, innovation and air pollution (Fuels Cells and Hydrogen 2019).

Accordingly, the European Commission has published its Hydrogen Strategy in 2020 with the aim to boost hydrogen use in the industry and transport sectors, while fostering the uptake of renewable hydrogen production (European Commission 2020a). In particular, it includes the target to ramp-up electrolysis capacity in the EU to 40 Gigawatts by 2030, as well as to a similar magnitude in neighbouring countries exporting to the EU.

The study will contribute to three overall objectives:

  • Stocktaking and potential: The study will present and analyse the state of play regarding the potential of hydrogen for decarbonising the EU industry.
  • Current policies and gaps: The study will analyse how the EU is currently performing, including the main opportunities and challenges for implementing the Hydrogen Strategy as proposed by the European Commission.
  • Policy options: Based on the specific study results, the study will offer and assess policy options for the creation of a hydrogen ecosystem in the EU that will enable the replacement of fossil fuels in hard-to-decarbonise sectors.

The potential to be considered under the first objective goes beyond the EU industry’s production processes but also covers the production of hydrogen and its transport to industrial users. Accordingly, the potential of a hydrogen economy is considered along the whole calue chain (sourcing of renewables, production of hydrogen, its transport via networks and other means, hydrogen applications) and a stocktaking of the current status is carried out.  

Under the second objective, the study addresses the targets of the European Hydrogen Strategy and assesses the main challenges for reaching it along the value chain. Furthermore, it analyses which policies are in place to address these main challenges, which impacts can be expected from them and where there are gaps in the current policy landscape.

Under the third objective, policy options for improving the performance of the present policies and closing gaps in the policy landscape will be derived along the value chain, in order to seize the opportunities of a hydrogen economy, while limiting potential unintended side-effects.

Duration

March 2021 - October 2021

Client

STOA Panel of the EU Parliament

Partners

  • Fraunhofer ISI (lead)
  • Institute for Technology Assessment and Systems Analysis (ITAS)