The energy transition cannot be achieved without hydrogen. This is well known by the International Energy Agency (IEA), which in its ‘Net Zero Scenario’ assigns to hydrogen a fundamental role as a fuel, both in the transport sector – especially heavy and long-distance transport, where it is much more complex to implement electrification – and in the so-called ‘hard-to-abate’ industries (such as steelmaking), where process heat requirements cannot be replaced in any other way.

Equally important is the role of seasonal energy storage. This provides storage of excess energy produced by renewable sources at certain times of the year – think of photovoltaics in the summer months – and then reuse at other, less ‘productive’, times in terms of distributed generation.

REPowerEU and its potential shortcomings
Well aware of its relevance, the European Union (EU) has included seasonal energy storage in the strategic guidelines of REPowerEU – the plan to rapidly reduce dependence on Russian fossil fuels – setting the ambitious target of producing 10mn tonnes of green hydrogen domestically and importing the same amount by 2030. The problem is that these volumes represent a poor compromise between feasibility and the real need to contribute to decarbonisation.

In fact, according to their publicly available national strategies, Germany, Spain, France and Italy aim to build 30.5 GW of electrolysers and produce just over 2.6mn tonnes of green hydrogen by 2030, a meagre 26% – considering the weight of these countries – of the target. Looking at the investment projects declared by private companies and reported in the IEA database, we should have well over 100 GW of electrolysers in Europe by 2030. Achieving this figure, more in line with the production target, runs into two main problems.

The first concerns the distribution of private projects and their consistency, in terms of both size and location, with hydrogen needs, unless we imagine a fully operating European hydrogen transport and interconnection network by 2030 or an endless stream of tankers on our roads. Indeed, more than 25 GW (one in four) of these projects are expected to be realised in Spain, far exceeding the national target of 11 GW and thus posing serious concerns of excess production. Germany, on the other hand, has the highest number of projects – 131, scattered across the country – for a total of about 11 GW of capacity.

The second problem relates to the fact that more than 400 GW of renewable energy plants should be installed to supply 100 GW of electrolysers. Such a quantity could only be achieved if the entire installed renewable energy capacity in the period 2024–2030 was dedicated exclusively to hydrogen. Indeed, in 2023 Europe as a whole installed just over 70 GW of capacity. Not to mention the economic sustainability of these investments, as the production of green hydrogen is still at least four to five times more expensive than production from fossil fuels, and around eight to 10 times more expensive than generating hydrogen from natural gas for industrial thermal needs.

Cooperation with Africa is paramount
The situation is equally problematic outside Europe, where, in accordance with the objectives of REPowerEU, 10mn tonnes of hydrogen should be recovered. Africa could play a key role. To date, five African countries – Algeria, Kenya, Namibia, Morocco and South Africa – have announced their national strategies, while another six are participating in the African Green Hydrogen Alliance (AGHA), a consortium that aims to intensify intra-continental cooperation on supply chain development.

At present, however, the EU is far from being able to import 10mn tonnes of hydrogen, as there is no real European strategy for cooperation with Africa. Diplomatic and investment action is being taken only by individual countries, rather than by the EU. This leaves plenty of room to manoeuvre for Russia and China, which are certainly not free from the ambition to control Africa’s natural and energy resources.

Stronger integration in the EU hydrogen energy policy
Last but not least, we should consider the quantities required. For Italy alone, the hydrogen necessary to meet the needs of industry and transport (that is, without seasonal storage) has been calculated at 4.6mn tonnes, which represents 46% of the entire European production expected by 2030. This discrepancy is so significant that decisive action is required. In addition to a reassessment of the quantities in question, there is an urgent need for a more intelligent redistribution of resources, taking into account the production potential and the needs of each and every country.

A possible avenue for achieving this is the establishment of a supply chain for electrolysers at a European level. It is a solution that we have already experienced in the aerospace industry, and which has been recently proposed for electric vehicle (EV) batteries as well, as a response from competition from China.

The creation of a European industrial base for electrolysers could leverage existing but scattered competences and assets, and avoid duplication of investments in different countries. It would also create a scale economy effect by ensuring demand for electrolysers  in the EU, contributing to a reduction in the cost of production.

The creation of a European industrial base for electrolysers could leverage existing but scattered competences and assets and avoid duplication of investments in different countries.

Another possibility is the formulation of a common foreign policy on hydrogen energy. A European plan for the production and the import of hydrogen from Africa has higher chances of success – particularly considering the competition from Russia and China – than leaving each country to manage their own investments. Moreover, if paired with the above-mentioned EU industrial base for electrolysers, this political action would create the condition for expanding the market potential of EU production plants.

While these may seem ambitious goals, they could offer a more effective approach than the strategies that have been pursued thus far.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘New developments to boost Europe’s hydrogen value chain’. The European Commission providing a further €1.4bn in state aid to support development of Europe’s hydrogen value chain. Meanwhile, plans for green hydrogen export between Scotland and Germany, and from Tunisia to Central Europe, have been unveiled.
• Europe’s largest green hydrogen plant at Herøya Industrial Park, Norway has made its first fertiliser deliveries.