I always had an interest in hydrogen. Not sure fully why, but the lightest element in the periodic system always raised my attention. During my professional career, I didn’t have a real opportunity to directly engage in the policy work around the future of hydrogen in Europe. Until recently, when I joined Air Products, the leading global producer of hydrogen, jumping into the middle of the most exciting developments in the energy area, for years.

There has been a lot of recent excitement around hydrogen. Almost daily, different known and newly established companies or joint ventures announce their investments in hydrogen and all its derivates across the value chains. Major fossil-fuel dependent industry sectors tunning their furnaces and processes to adopt hydrogen. The nuclear sector grasps new arguments to pull nuclear energy back into the political focus and Russia is developing a new strategy on how to rebrand its natural gas. Hydrogen for Mobility hype is as big as was TESLA hype some 10 years ago. Currently maybe less for cars, but certainly for trucks, trains, buses, ships, and potentially planes. When people get excited about something, they usually want things to happen almost overnight.

In the case of hydrogen, the situation is different and quite unique. Technologies to produce hydrogen and known for decades. They have matured over the years and can reliably provide for the current hydrogen needs, manly in industry. However, for the time being, hydrogen is produced from reforming natural gas or coal, emitting significant amounts of CO2. This has also proven to be the most cost-efficient solution for decades.

EU’s de-carbonization path aims at steering away from the use of fossil-based fuels. This requires hydrogen producers to rethink and recalculate their returns on fossil-fuel-based investments in Europe. Two choices appear as potential solutions: a) either they apply Carbon Capture and Storage (CCS) to their existing installations and/or b) add CCS costs to the planned new investments. But this does not solve the use of natural gas as their feedstock.

Electricity based technologies for hydrogen production prevail as the preferred future solution. But the amounts of electricity electrolyzers use daily can often cover the yearly electricity needs of an entire city. If we want to produce a low carbon and renewable hydrogen, vast amounts of additional renewable electricity capacities will have to be added in Europe. Complementary grid balancing, storage, and backup facilities will have to enable stable electricity supply to ensure production and utilization efficiencies.

On average Europe is not the sunniest and windiest place on the planet, therefore consideration of hydrogen imports from other parts of the world needs to be included in the hydrogen market roll out in Europe. Projects, such as NEOM should be seriously considered as strategic, complimentary, and swift enablers.

Similar types of big projects will be needed, probably also in Europe. Without going into specific numbers, let me just draw a simplified picture of the scale of the challenge. In 2050, hydrogen and its applications shall supply 25% of the total global energy demand. If electricity-based solutions prevail, most of the new capacity will still have to be built as currently, only 0,1% of the world’s hydrogen production comes from electrolytic processes. Stable electricity supply from renewable or low carbon electricity sources will have to feed the electrolyzers, (new) market demand will have to be created and will require new infrastructure and innovative business models to create public acceptance and attractiveness for future costumers.

Good intentions from the European legislators are welcomed. But current policy proposals, based on the (emotional) excitement, spiced up by different interests and implementations in the EU Member States, often unrealistic demands from NGO’s, create confusion amongst (potential) investors. EU policies should keep the door wide open for all renewable and low carbon technologies to play their role and help the European and global hydrogen market to develop. The regulatory doors should also remain wide open to include imports of renewable and low carbon hydrogen to Europe. This could make the excitement come true much earlier and help Europe to maintain global energy and climate leadership.