{"id":633938,"date":"2024-07-23T00:00:00","date_gmt":"2024-07-23T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/why-the-eu-is-unlikely-to-meet-its-2030-green-hydrogen-targets\/"},"modified":"2024-07-23T00:00:00","modified_gmt":"2024-07-23T00:00:00","slug":"why-the-eu-is-unlikely-to-meet-its-2030-green-hydrogen-targets","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/why-the-eu-is-unlikely-to-meet-its-2030-green-hydrogen-targets\/","title":{"rendered":"Why the EU is unlikely to meet its 2030 green hydrogen targets"},"content":{"rendered":"

Europe\u2019s green hydrogen targets could turn out to be a pipe dream:<\/strong> The EU\u2019s targets for expanding its green hydrogen market are \u201cunrealistic,\u201d the European Court of Auditors<\/a> (ECA) said in a report (pdf)<\/a> on the bloc\u2019s industrial policy for green hydrogen. The bloc\u2019s targets<\/a> of producing 10 mn tons of green hydrogen and importing another 10 mn tons by 2030 under its REPower EU<\/a> plan \u201cturned out to be overly ambitious\u201d and are unlikely to be met, the audit body said. The European Commission \u201cdid not undertake robust analyses\u201d before setting the targets, it added.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

Background:<\/strong> With the launch of the European Green Deal<\/a> in 2019, the EU set forth the goal of becoming climate-neutral<\/a> by 2050 \u2014 in other words, achieving net-zero greenhouse gas emissions within that time frame. The target is legally binding under the European Climate Law<\/a>. Recognizing that green hydrogen could catalyze the transition toward climate neutrality, the European Commission adopted the EU Hydrogen Strategy<\/a> in 2020. Two years later, it set more ambitious hydrogen targets as part of the REPower EU plan, which aims to eliminate the bloc\u2019s reliance on Russian fossil fuels by the end of the decade in response to Moscow\u2019s invasion of Ukraine.<\/p>\n

The hydrogen targets are non-binding:<\/strong> The EU\u2019s production and import targets are non-binding for member states and are \u201cmore aspirational than compulsory,\u201d the report reads. Not all countries set their own targets, and those who did aren\u2019t necessarily aligned with the Commission\u2019s targets, the report reads. However, member states did have to set national energy and climate plans (NECPs), which may include green hydrogen targets. Some 24 members of the 27-nation bloc had submitted their NECPs by last December.<\/p>\n

Only one country has committed to green hydrogen targets in its NECP: <\/strong>Of the 24 states who submitted NECPs, only Germany had included green hydrogen import targets as of last December. None set forth production targets.<\/p>\n

The strategy is more ambitious than the sum of its parts:<\/strong> The sum of the installed electrolyser capacity targets set by 16 member states in their NECPs ranged from 46 GW to 50 GW of input, well below the installed capacity needed to produce 10 metric tons of green hydrogen. Additionally, some of this capacity pertains to low-carbon hydrogen rather than green hydrogen.<\/p>\n

Accessing funds is no walk in the park:<\/strong> The estimated EUR 18.8 bn of funding earmarked by the EU for hydrogen-related projects between 2021 and 2027 is scattered over several programs with different funding rules. The fragmented funds make it difficult for hydrogen project developers to identify the program that is best suited to their needs. Some 72.3% of the funds are allocated by the Recovery and Resilience Facility (RRF), while the remainder comes from an array of programs managed by different Commission directorates-general according to different management modes. <\/p>\n

Public investment plans have some ways to go: <\/strong>While much of the investments along the hydrogen value chain will have to be financed by the private sector, public investment is crucial to support the development of hydrogen infrastructure and a green hydrogen market, according to the report. As of yet, however, the EU\u2019s estimates of investments needed are \u201cnot exhaustive,\u201d the report reads, with the Commission not in possession of complete data on either national or EU-wide plans. And while the Commission has taken steps to ease individual member state\u2019s ability to provide aid to shepherd the green transition along, hurdles still remain in deploying that aid, slowing down projects in the pipeline.<\/p>\n

The demand isn\u2019t quite there: <\/strong>According to the report, demand for green hydrogen \u201cwill not even reach 10 Mt by 2030, let alone 20 Mt.\u201d Hydrogen accounted for less than 2% of Europe\u2019s energy consumption in 2022, with most of the demand for hydrogen coming from refineries. Some 96% of the hydrogen used in Europe that year was produced using natural gas, generating significant CO2 emissions. <\/p>\n

It\u2019s a catch-22 situation:<\/strong> Seeing as the green hydrogen market is nascent, demand is needed for supply to grow and vice versa, resulting in what the report describes as the \u201cchicken and egg\u201d problem.<\/p>\n

Pricing is a sticking point, too:<\/strong> The EU\u2019s Hydrogen Strategy states that renewable energy should be available at a competitive price, without setting a target for the cost of producing hydrogen. In contrast, the US\u2019s Clean Hydrogen Strategy (pdf)<\/a> targets a production cost of USD 2 per kilo by 2026 and USD 1 per kilo by 2031.<\/p>\n

On a slightly brighter note, <\/strong>the report did say that some of the countries on the European green hydrogen vanguard already have projects entering the advanced phases \u2014 notably Germany and the Netherlands, which are also actively developing green hydrogen pipeline infrastructure. The report notes that some ministry representatives the audit body met with see the 2023-2030 targets as \u201cno-regret\u201d measures, meaning that \u201cthey are worth implementing whatever the actual market developments turn out to be.\u201d<\/p>\n

Industry players are urging the commission to keep its feet on the ground:<\/strong> Industry body Hydrogen Europe earlier this month sent a letter<\/a> to the European Commission outlining some of the policy adjustments it thinks are needed over the next five years in order for the bloc\u2019s hydrogen ambitions to \u201cmaterialize in time for our 2030 reality check,\u201d the body said. Key among these, the letter notes, is a greater level of public investment that will \u201cderisk\u201d the industry\u2019s development. \u201cEurope needs to move from the notional inclusion of hydrogen in the energy mix to an earnest development of the hydrogen economy\u201d in order to hit its 2030 targets, it asserted.<\/p>\n

The commission responds:<\/strong> \u201cOur work is far from finished,\u201d the commission commented on the ECA report in an emailed statement picked up by Bloomberg<\/a>. \u201cWe now have to accelerate the deployment and uptake of renewable and low-carbon hydrogen in Europe and further develop this emerging market.\u201d <\/p>\n

Still can\u2019t get enough green hydrogen? <\/strong>In a recent Going Green<\/a>, we take a look at the barriers facing green hydrogen production in Egypt.<\/p>\n

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