Hydrogen’s place in an energy-efficient EU

The scale of Hydrogen production proposed, a massive 10 million tons per year by 2030, poses significant problems to the European Union’s climate ambition, energy security and consumer welfare. With the current energy crisis, reducing dependence on fossil gas, while avoiding negative impacts for end consumers is paramount.

In this year’s State of the Union speech, European Commission’s President von der Leyen established that the heart of the Green Deal is Hydrogen and that to facilitate its rapid uptake, a Hydrogen bank would be set up, funnelling resources of up to 3 billion euros from the Innovation Fund. The scale of Hydrogen production proposed, a massive 10 million tons per year by 2030, poses significant problems to the European Union’s climate ambition, energy security and consumer welfare. With the current energy crisis, reducing dependence on fossil gas, while avoiding negative impacts for end consumers is paramount.

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Scale of the hydrogen target
Electrolytic hydrogen production requires a large amount of energy, 1.6 times its output. This 40% loss in energy does not include the additional energy required to compress or transport hydrogen. The amount of electricity required to produce the targeted 10 million tonnes of hydrogen would be close to 500 TWh, or approximately the total electricity consumption of France in a year. Sourcing this electricity demand from renewables to ensure it is green hydrogen would mean using up nearly all of the 537 TWh of current EU solar and wind generation.

Considering that the hydrogen target is set for 2030, the ambitious RePowerEU plans would shrink to deliver roughly 900 TWh as compared to the initial 1400 TWh. Hydrogen takes a big bite out of the 2030 renewables production “pie”.

On a system level, hydrogen’s big bite means added electricity demand overall. Meeting these elevated demands would mean turning to sources of electricity production that can match the pace of uptake, which is often fossil gas. If all the additional electricity needed to produce the hydrogen target is sourced from gas, it will increase demand by 85 bcm or over half of the fossil gas imported from Russia in 2020. This would mean a significant increase in emissions, in fact, if the electricity is sourced from gas, additional emissions from hydrogen production would equal the current EU aviation sector emissions.

The impact of hydrogen is only fully understood when the alternatives for the electricity used in its production are weighed out. Electrolytic hydrogen production can have more emissions associated with it than hydrogen produced via steam methane reforming (MR). Coal and gas plants (both open cycle and combined cycle) produce 5 to 25 more tons of CO2 per ton of hydrogen produced than SMR.

Hydrogen is not an energy source: it is an inefficient energy carrier. Especially when electrolytic hydrogen is converted back into electricity, almost two third of the initial energy is lost. Most of the losses in the value chain occur when converting from electricity to hydrogen and back.

Given this, alternative use of electricity yields far more efficient results. In-home heating heat pumps displace more than four times the emissions renewable hydrogen would against fossil fuels. The contrast is even starker for light-duty transport, with battery EVs displacing seven times more GHG emissions compared to fossil-based ICE (internal combustion engines) than E-fuels would.

Beyond emission profiles, hydrogen throws into question the energy security of the EU through its inefficiencies. Alternatives to hydrogen provide far greater benefits to the EU’s energy security by displacing more bcm of gas per TWh. With renewables directly in the grid, nearly 2.4 times more bcm of gas are displaced per TWh than green hydrogen for electricity production.