The EU unleashes hydrogen for the next energy transition

The EU aims to be climate-neutral by 2050 and hydrogen is the central element to meet the net-zero emissions target in the next years.

Hydrogen is not the “magic bullet” for the decarbonization of our economy, yet it is an energy carrier on which we need to invest more. It can be used as a feedstock, as a fuel, as an energy carrier or for storage, and has many possible applications across industry, transport and buildings sectors. Hydrogen costs are not competitive enough, yet it holds an important place to hit the target of a profound decarbonization of the Europe in the long run.

The Commission’s choice to focus on green hydrogen is not ideological: the costs of renewable hydrogen are in fact falling rapidly. Those of electrolysers have already fallen by 60% over the past decade and are expected to halve by 2030 thanks to economies of scale. In regions where renewable electricity is cheap, electrolysers are expected to be able to compete with hydrogen based on fossil fuels.

This is why the EU set a long-term strategy to prepare both the market and industries to the transition.

The hydrogen roadmap to 2050

The EU draft strategy schedules a roadmap of investments which will promote a massive increase in the production of electrolysers, necessary for the transformation of renewable energy (wind and solar, above all) in green hydrogen, through a process of electrolysis from water.

The strategy aims to build a European ecosystem for hydrogen:

By 2024, the European Union aims to expand its production capacity of electrolysers to 6 GW. Currently, electrolysers installed in the whole territory have a capacity of 1GW, therefore Brussels’ short-term objective is to decarbonise the existing hydrogen production destined for current uses, for example in the chemical sector, and to promote new applications.

Between 2024 and 2030, hydrogen is expected to become an essential part of an integrated energy system: the goal is to install at least 40 gigawatts of renewable hydrogen electrolysers by 2030 and produce up to 10 million tons of renewable hydrogen in the EU. Gradually the use of this source will be extended to new sectors, including steel, trucks, heavy transport and shipping.

Between 2030 and 2050 technologies based on renewable hydrogen are expected to reach maturity and find large-scale application in sectors that are difficult to decarbonise, where alternatives may not be viable or have higher costs.

European countries are investing on hydrogen

Europe is competitive in clean hydrogen technologies: countries like Austria, Holland, Germany, Spain, Portugal have several concrete projects going on both in research and development sectors. France focuses on the production of hydrogen from nuclear electricity. Hollandpossesses a multifaceted model based both on offshore renewable energy and fossil sites, thus focusing on both renewable and low-carbon hydrogen. Germany’s strategy prioritizes green hydrogen production but expects to consume both blue and green hydrogen. Italy, on the other hand, is advantaged both by excellent energy companies in the territory and by its geographical position, which makes importing from other Mediterranean countries easier.

What about hydrogen in Italy?

Italy ranks among the most competitive countries and is likely the one to benefit the most from the energy transition. The country is characterized by a production structure in which high-emissions industries predominate and, as energy prices are a significant variable in the cost structure, switching to renewables or hydrogen produced within the national borders constitutes a great opportunity.

Both for its technologies, its position and infrastructures, Italy can serve as the link between North-Europe and other Mediterranean countries, in fact:

  • Italian gas infrastructures support hydrogen. This means that South-Italy can meet North-Italy’s energy demands by transmitting hydrogen in a very efficient way, through the existing architectures.
  • Italy could employ its existing pipelines to import hydrogen from North Africa at 14% below the national production cost, also providing hydrogen exports from Italy to the rest of Europe.

Given those reasons and an expected cost lowering for hydrogen production (due to costs reduction of electrolysers), Italy has a great opportunity to be at the frontline of the European energy transition, consequently energy management systems will be necessary to optimize hydrogen production and consumption.

This is why BaxEnergy is investing on advanced digital technologies to manage, control and store hydrogen. Today BaxEnergy is the only Italian company to boast a reference in the development of an independent monitoring system for hydrogen, providing European utilities with an energy management platform for intelligent market forecast of green hydrogen, applied to different sectors.

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