Europe’s hydrogen revolution: the outlook for transport

On 8 July, the European Commission unveiled its long-anticipated Hydrogen Strategy, laying out a roadmap to make the EU the global leader in the hydrogen economy. The Hydrogen Strategy aims to foster the energy transition and act on the ambition of achieving climate-neutrality by 2050. The Commission aims to grow the share of hydrogen in the EU’s energy mix from the current 2% to 13-14% by 2050.

The momentum for hydrogen has grown in recent months. Market demand has significantly increased and the costs of renewable energy have decreased. Moreover, several Member States already published national hydrogen initiatives (e.g. Germany, France, the Netherlands). According to the Commission, a coordinated approach at EU level is necessary to scale up fast and streamline investment needs.

With the Hydrogen Strategy, the Commission charts the path towards ‘green’ hydrogen, based on renewable electricity (e.g. solar and wind energy). However, as green hydrogen is not yet cost-competitive against fossil-based hydrogen, the Commission acknowledges the potential of low-carbon hydrogen (e.g. Carbon Capture Storage) as a facilitator to scale up production and stimulate the market demand for hydrogen.

Hydrogen as enabler of emissions-free transport

The Hydrogen Strategy presents opportunities for the transport industry to act on the ambition of decarbonization and reducing CO2 emissions. Although electrification seems to be the most viable option on the short term, hydrogen is dubbed as the energy source for the future of transport. According to the Commission, the application of hydrogen in the transport industry is likely to develop through a gradual trajectory.

  • In the first phase (2020-2024), the objective is to produce up to 1 million tonnes of renewable hydrogen and to facilitate the take up of hydrogen consumption in commercial fleets (e.g. taxi’s) and specific parts of the railway network. Moreover, it could also be applied to heavy-duty transport, such as buses, lorries, coaches – currently responsible for about 6% of total EU CO2 emissions.
  • In the second phase (2025-2030), the objective is to make hydrogen an intrinsic part of an integrated energy system and to produce up to 10 million tonnes of renewable hydrogen. In this phase, green hydrogen should be cost-competitive with other forms of hydrogen production, but demand-boosting policies will be needed for the application of hydrogen in the railway sector and maritime transport (e.g. short-sea shipping and inland waterborne transport).
  • In the last phase towards maturity (2030-2050), renewable hydrogen and hydrogen-derived synthetic fuels could be applied to several hard-to-decarbonize modes of transport, such as aviation and deep-sea shipping, although the Commission acknowledges more research and innovation efforts are required to realize these ambitions.

In order to realize the hydrogen ecosystem and trajectory for transport, the Commission opts for an integrated value chain approach. In doing so, the Commission incorporates several aspects which are necessary to facilitate the hydrogen transition, ranging from infrastructure (e.g. the deployment of hydrogen refueling networks for the different modes of transport) to production techniques and market regulation (e.g. EU incentives to stimulate demand-side support policies).

The Commission is still exploring further renewable hydrogen appliances in the transport industry. This broader uptake of green hydrogen in the transport sector will be reflected in the Strategy for Sustainable and Smart Mobility, which is due for publication in the fourth quarter of 2020, and for which the public consultation has recently opened

Stimuli for the Hydrogen revolution

The Clean Hydrogen Alliance, a Commission-led coalition that brings together industry, governments and civil society, will identify a robust pipeline of projects to accelerate the upscaling of hydrogen production. The Alliance will be strongly anchored in the hydrogen value chain, covering green and low-carbon hydrogen from production via transmission to mobility, industry, energy and heating applications.

Financial instruments such as InvestEU, the Horizon partnership for clean hydrogen and the Cohesion Fund, which will expectedly be topped up by financial resources from the €750 billion Next Generation EU Recovery Fund, will help drive clean hydrogen past its tipping point.