In light of the ongoing geopolitical tensions and the current European energy crisis, Commission President Ursula Von Der Leyen declared that “hydrogen can be a game-changer” during her State of the European Union address. In her mission statement, she explained how investments in hydrogen are necessary to scale up the hydrogen market so it can contribute to decarbonizing the EU economy and move away from fossil fuels. The REPowerEU plan, presented by the Commission on 18 May 2022, reflects equally ambitious plans for hydrogen, doubling the production and import of renewable hydrogen by 2030.
In order to outline the impact and feasibility of the EU’s ambitions, Dr2 Consultants interviewed Gijsbert Wierink, founder of Plutonic Raw Materials Advisory (RMA), to share his views on the recent policy developments. As an expert in strategic sustainable raw materials and supply chains, Plutonic RMA finds itself right in the midst of the proposed policy measures.
How do you see the role of hydrogen in the EU’s sustainable economy?
Smart use of hydrogen can make EU economy more sustainable. The key here is to assess the energy economy as an integrated and interdependent system.
Hydrogen can be used for different purposes, for example, to produce fertilizers and certain petrochemical products. Much of the hydrogen currently used is produced from non-renewable sources, both in terms of the raw materials and the energy needed for production. The production and use of hydrogen in these areas is associated with significant emissions of greenhouse gasses. Alternatively, green hydrogen is hydrogen that is produced using renewable energy sources and raw materials. The emissions for production and use of green hydrogen should be net-zero, or at least very close to that. For the most polluting activities, such as transportation or heavy industries like the metallurgical and materials sector, hydrogen could replace the role of energy carrier and reduction agent that is now fulfilled by hydrocarbons or coal. There are some great projects and innovations in these areas.
Building vehicles with an Internal Combustion Engine (ICE) that run on hydrogen is a good step. Such hydrogen ICE does not produce carbon dioxide (CO2), although the combustion process still generates nitrogen oxide (NOx) emissions. Hydrogen fuel cells, however, do not emit CO2 or NOx and can be a greenhouse-gas-neutral solution. Another great example of decarbonization is the use of hydrogen as a reducing agent in the metallurgical industry. In simplified terms, iron metal is made from iron ore (an oxide) by bringing it into contact with a material that has an even stronger tendency to oxidize. In most cases this is carbon, resulting in liquid iron, carbon monoxide, and carbon dioxide. Nevertheless, a leading steelmaker recently made the first fossil-free steel by using hydrogen as a reducing agent. This provides perspective, but importantly, technology needs to be adapted and scaled to meet the current demand.
There are quite a few technologies under development that could abate heavy industries and transportation. I believe there is experience and a willingness from the industry and the markets to make hydrogen work. When the European institutions can set standards and support industries and education in this area, we have a good chance of decarbonizing the European economy and beyond.
Do you believe the proposed hydrogen volumes under the REPowerEU are feasible (i.e. 20 million tons of renewable hydrogen by 2030; 50% import/50% domestic production)?
“Bloody hard, but possible”, to paraphrase the European Commission’s Vice President Frans Timmermans. There are many great challenges to addressing this forced demand for hydrogen in the production, transport, storage, and use phases. Current global hydrogen demand is around 90 million tons per year. Importantly, however, the REPowerEU refers to so-called green hydrogen. Hydrogen comes in different flavors, so to say, depending on both the raw materials and the source of energy used for the process.
On the least environmental end of the spectrum, there is black, brown, and grey hydrogen, produced from fossil materials and using fossil fuel as energy source and emissions may not be captured. On the other end of the spectrum, there is green hydrogen – produced from the electrolysis of water, using renewable energy. Water molecules (H2O) consist of two hydrogen (H) atoms and one oxygen (O) atom. The hydrogen and oxygen atoms can be split into hydrogen and oxygen gas using electricity – this is called electrolysis. Hydrogen gas is called green hydrogen when it is produced from the electrolysis of water using renewable energy.
The EU-27 annual electricity production is around 2700-terawatt hour (TWh), of which about a third comes from renewable sources. At an electrolysis efficiency of 70%, the production of one ton of green hydrogen requires about 57-megawatt hour (MWh). Here, I ignore losses due to the transport and storage of both hydrogen and electricity. Producing 10 million tons domestically would require about 571 TWh of renewable energy capacity just for electrolysis. In practice, this would mean roughly doubling the current renewable energy production capacity.
Europe has about 17% of current electrolysis capacity globally, the US about 45%, and the rest is produced mostly in the Asia Pacific. The Middle East, China, as well as Australia, are increasing their renewable energy production as well as hydrogen production rapidly. Hence, there will probably be enough global capacity for Europe to be able to import 10 million tons of green hydrogen per year by 2030. The question is whether this hydrogen will be available for import into the EU. This depends greatly on how the geopolitical landscape develops over the coming decade, as we see currently with natural gas and battery metals.
How do you think we can move the hydrogen economy from niche to scale?
I agree that scaling is key to further developing the technology and experience necessary to bring down costs. In this respect, there are many lessons to be learned, both good and bad, from the recent scaling up of solar and wind energy. Europe, and in particular Germany, has had a respectable global position in photovoltaics development and production in the past despite many challenges. One of these challenges has been that production has moved to the Asia Pacific, particularly China, and costs have been driven down. This made production and development less feasible in Europe. Nonetheless, apart from environmental concerns, we must consider the supply chain security and the geopolitics that come with the territory.
Scaling up hydrogen technology is on the one hand a technical and educational issue, where we need to promote and support companies and educational institutes to expand capacity in the EU. On the other hand, this is very much a legislative and policy issue, where the European Institutions play a crucial role. To scale up, we need consistency and stability in the investment, industrial, as well as educational arenas. Nobody will invest money or dedicate their career to something that might change in two years. This is one of the things we can learn from other renewable technologies in the past. Consistent policies and a stable investment environment are crucial to long-term success.
Perhaps not a popular and flashy way of putting it, but here boring is good. The European Union and its Member States need to build trust among the industries, the markets, and the public. Trust and stability will bring down investment risk and increase the chances of this technology scaling up and contributing to our climate goals.
In terms of raw materials necessary to produce hydrogen, do you believe the EU’s ambitions are feasible?
To produce green hydrogen, we need electrolyzers and renewable energy capacity, both of which require a dramatic increase.
Many of the raw materials needed to produce green hydrogen are in limited supply in Europe or are so-called critical materials, materials that are subject to supply risk and are not easily substituted. The main types of electrolyzers are alkaline (AEL), proton membrane exchange (PEM), and solid oxide (SOEL) electrolyzers. Generally, these technologies require membranes and electrodes that are made from critical materials including platinum, palladium, iridium, nickel, and aluminum for the electrodes and graphite, titanium, and others for membranes. Furthermore, metals such as copper, aluminum, and tin are necessary for connections and the electric grid.
Besides, the technologies used to produce renewable energy including wind turbines, solar cells, hydropower, and other technologies, require a wide variety of special metals and minerals, which are often not available in sufficient amounts in Europe for the dramatic expansion in renewable energy capacity needed. Examples of these materials include silicon, tellurium, germanium, boron, indium, and gallium for photovoltaic cells. Production of wind turbines requires boron, niobium, and others. Most of the above renewable energy sources require so-called Rare Earth Elements (REEs). REEs are a group of 17 special metals and are needed to produce, for example, the permanent magnets in windmills and electric motors.
Clearly, we will need to significantly improve European control over critical raw materials supply. This means a more engaged foreign policy and collaboration with producing countries, as well as improving processing and recycling capacity and knowledge in Europe. The European Union and its Member States are currently focused on crucial areas, such as improving and promoting raw materials education, supporting renewable energy and battery companies, and investing in research, aimed to make the processing capacity in Europe more feasible. I believe this is possible in Europe. The important and challenging part will be to do all this in a fast, coordinated and aligned way.
Do you have any advice for other organizations or companies which might also see threats and/or opportunities with the EU’s ambitions for hydrogen?
I believe it is important to look at such problems and possible solutions on a systemic level. The last thing you want is to do good in one area and damage our environment, society, or economy in another area. At the same time investment risk is another concern. You do not want to invest in one area and have a problem in a few years, such as many farmers recently experienced.
Realism, collaboration, and a systemic approach. The main driver for the hydrogen economy in the EU comes from the European Green Deal and its latest addition REPowerEU. There are amazing opportunities in the hydrogen economy, and these can be realized by an integrated and multipronged approach. I believe that industry, educational institutes, and policymakers want REPowerEU to be a success. An integrated approach can be realized with strong integration between policy, industry, and education. We need to speak with each other and listen. We must keep our eyes on the greater goals – reducing the effects of climate change and sustaining a democratic and autonomous Europe.
Anyone interested in contributing to and benefiting from the hydrogen economy can engage with the R&D community and industrialization of green hydrogen. Such strong collaboration can create momentum that would be hard to generate alone. The European Institute of Innovation and Technology (EIT) provides a great set of platforms for this through a range of so-called Innovation Communities in the areas of raw materials, manufacturing, energy, and more. Other specific organizations include Hydrogen Europe, the European Clean Hydrogen Alliance, H2 Forum, and many others at European and Member State levels.
The key message is to take action and to take action together.
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About Gijsbert Wierink
Gijsbert Wierink is the founder of Plutonic RMA and has over 15 years of experience in mineral processing and recycling, innovation management, and mathematical modeling. He combines a high level of technical knowledge in raw materials processing with an analytical approach and international business experience.
Over the past decades, raw materials have become critical raw materials, requiring an understanding of both the benefits and risks of working with such materials. Through his knowledge, Gijsbert advices organizations on the potential benefits and risks, helping them create a strategy that gives them control over their objectives.