Europe’s hydrogen strategy “a gift to fossil fuel companies”

The EU’s strategy to boost the production of hydrogen risks locking Europe into burning fossil gas for generations, the European Environmental Bureau (EEB) said today.

In this press brief:

How clean is hydrogen?
What role for hydrogen in tomorrow’s energy mix?
The gas industry’s invisible hand

The European Commission has unveiled its strategy to upscale hydrogen [1] – a fuel that, if produced sustainably using renewable electricity, can become a strong ally in the race to climate neutrality.

The strategy would raise more than €180bn in total investments to boost the technology and infrastructure needed to produce, store and transport renewable hydrogen. A significant amount of funds will come from the EU’s post-coronavirus recovery plan, [2] which is currently being finalised.

Priority will be given to hard-to-decarbonise sectors such as the steel and cement industry and shipping and aviation, the Commission said.

However, the proposal also foresees fresh investments to boost the production of hydrogen made from fossil fuels, which every year is globally responsible for as many CO2 emissions as those of the United Kingdom and Indonesia combined. [3] Most worryingly, the Commission estimates that fossil gas will still account for 15% of Europe’s energy mix in 2050 – the year the EU is meant to go climate-neutral.

While welcoming the focus on renewable hydrogen, the European Environmental Bureau (EEB) warned of a “double-edged sword”. Barbara Mariani, the EEB’s senior policy officer for climate and energy, said:

“Investing in fossil-based hydrogen, the production of which is already available on an industrial scale, risks making truly clean and fossil-free hydrogen uncompetitive for the EU market and creating stranded assets. It’s a costly gamble that Europe cannot afford and could easily avoid.”

The EEB said the strategy risks turning into yet another gift to the fossil fuel industry rather than a chance to advance on the climate agenda. Calling on the European Parliament and governments to request a timeline to stop investing in fossil fuel use, infrastructure, and technology, Mariani said

“EU leaders must gear up for a complete phase-out of fossil gas by 2035, in line with the goal of limiting global warming to 1.5°C. This is not going to happen if we invest in false solutions such as fossil-based hydrogen and carbon capture technology, which together would create the perfect storm for deepening Europe’s dependence on fossil fuels.”

The Parliament and member states will discuss the strategy in the coming months, with a view to consolidating a final strategy before the end of the year.

How clean is hydrogen?

Only hydrogen that is produced via electrolysis using renewable electricity can be defined as clean.

But here is the catch. Hydrogen today is mostly produced from fossil fuels, including gas and coal used to generate electricity or as feedstock. This process, which the strategy refers to as ‘low-carbon’, is responsible for an estimated 70 to 100 million tonnes of carbon dioxide a year in Europe alone.

The Commission plans to invest heavily in expensive carbon capture and storage (CCS) and in a very early-stage process known as pyrolysis, which can mitigate the carbon emissions resulting from the production of hydrogen made from fossil gas.

Investing billions of euro in this technology would be a huge mistake. Firstly, to be commercially scalable and profitable, both CCS and pyrolysis require the continued use of fossil fuels, which would hamper the uptake of fossil-free solutions and the untapped potential of renewable energy. Secondly, CCS cannot trap all carbon emissions, and frequent leakages must be taken into account.

While useful in a supportive role to reduce emissions in the short-term, relying on carbon capture technology would be a costly gamble – one that would keep Europe dependent on gas imports from countries such as Russia and the US and delay the transition to climate neutrality. Europe has plenty of sun, wind and water to produce its own renewable hydrogen.

Fossil fuels set to remain part of the EU’s energy mix in 2050

Despite the hype, renewable hydrogen may account for about 10% of the final energy demand in the EU and UK by 2050. [4] This scenario assumes that all fossil fuels will be phased out by 2040, including gas used to produce hydrogen.

However, the Commission also published an Energy System Integration strategy today, in which it is estimated that the share of renewable energy in the EU’s energy mix will only be 84% by 2050. By assuming that fossil fuels will still be part of our energy system, the Commission paves the way for the production of fossil-based hydrogen, and reliance on other fossil fuels, therefore undermining its own climate neutrality target set in the European Green Deal.

Source: EEB and CAN Europe, 2020. “Building a Paris Agreement Compatible energy scenario” Developed in cooperation with grid operators and industry representatives.

The EEB pointed out that Europe doesn’t need more fossil fuels. The projected increase in electricity generated from renewable energy is set to boost the production of truly clean hydrogen in the next 10 to 30 years.

However, because of current production costs and limited availability, its deployment will have to be strategically assessed. A cost-effective role for renewable hydrogen would be in the decarbonisation of Europe’s most energy-intensive industries and transport – particularly steel and cement manufacturing as well as shipping and aviation – where electrification may be more challenging.

For all other sectors, including heating, Europe can already count on scalable solutions such as solar power, renewable electricity, and heat pumps. In fact, electricity made from renewable energy – coupled with the increasing energy efficiency of buildings, industrial processes, and consumer products – can deliver most of the progress needed to decarbonise our energy system.

The gas industry’s invisible hand

The gas industry is not only going to pocket huge sums of money in public and private investments. If left unchecked, it will largely dominate the upcoming policy discussions about hydrogen too.

This is the concern of many following the Commission’s announcement regarding the development of the Clean Hydrogen Alliance. The alliance was meant to bring together researchers, industry representatives and NGOs to oversee the implementation of the strategy. Regrettably, it turned into a one-sided club made up mostly of gas companies.

Jeremy Wates, Secretary General of the EEB, said:

“Gas companies have absolutely no interest in renewable hydrogen. We cannot trust them to lead an alliance for clean hydrogen when it is in their commercial interest to continue selling a polluting version of it. We need more civil society participation if we want the Hydrogen Strategy to be a success.”

Last month, gas companies and operators urged the European Commission to include substantial funding for fossil-based hydrogen. [4] In a bewildering letter, the lobby groups claimed that Europe must continue burning fossil fuels to achieve zero carbon emissions.

Notes to editors

[1] https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1259

[2] https://eeb.org/eu-plans-multi-billion-euro-green-recovery-but-falls-short-in-crucial-areas-1/

[3] https://www.iea.org/reports/the-future-of-hydrogen

[4] https://eeb.org/new-energy-scenario-sets-path-to-climate-neutral-europe-by-2040

[5] https://www.euractiv.com/section/energy-environment/news/industry-alliance-rebels-against-all-renewable-hydrogen/