As the global spotlight shines on the emerging hydrogen economy, the European Union (EU) has emerged as a key player, investing heavily in renewable hydrogen research, development, and early deployment. The EU’s hydrogen strategy, unveiled in 2020, sets an ambitious goal of installing at least 40 GW of renewable hydrogen electrolyzers by 2030, with the aim of positioning Europe as a leader in this critical clean energy technology.
However, the EU’s hydrogen ambitions are complicated by the diverse strategies and priorities of its 27 Member States. While the EU has prioritized the development of renewable hydrogen and stringent sustainability criteria, some Member States are exploring alternative pathways, such as blue hydrogen produced from natural gas with carbon capture and storage, or even nuclear-based hydrogen. This divergence reflects the Member States’ varying energy mixes, economic considerations, and political factors.
The Role of EU Policies
The EU’s hydrogen strategy is primarily shaped by two key policy instruments: the Renewable Energy Directives (RED) and the Hydrogen Strategy for a Climate-Neutral Europe.
The Renewable Energy Directives (RED), updated regularly, set binding targets for the adoption of renewable energy sources across the EU. The latest iteration, RED III, includes a specific target of 42% renewable hydrogen use in the industrial sector by 2030. This EU-level policy sets the stage for Member States to align their national hydrogen strategies with the bloc’s overarching goals.
The Hydrogen Strategy for a Climate-Neutral Europe, launched in 2020, outlines the EU’s vision for the development of a robust hydrogen economy. It identifies renewable hydrogen as the priority, with the aim of establishing Europe as a global leader in this technology. The strategy also highlights the need for cross-border hydrogen infrastructure and international partnerships to ensure a reliable supply of clean hydrogen.
Complementing these initiatives, the EU’s Just Transition Mechanism provides financial support to help regions and communities dependent on fossil fuels to adapt to the shift towards a climate-neutral economy. This fund can be crucial in facilitating the deployment of hydrogen technologies, particularly in regions with high potential for renewable energy production.
Member States’ Hydrogen Strategies
While the EU sets the overall policy framework, the success of the hydrogen transition ultimately depends on the implementation and priorities of individual Member States. Several key players have emerged, each with their unique approach to hydrogen development.
Germany, the EU’s largest economy, has been at the forefront of hydrogen innovation. Its 2020 National Hydrogen Strategy emphasizes the role of renewable hydrogen in decarbonizing hard-to-abate sectors, such as steel and chemicals. Germany’s strategy also highlights the need for international cooperation and the development of hydrogen import partnerships, recognizing its limited domestic renewable energy resources.
In contrast, France has advocated for a more diverse hydrogen portfolio, including nuclear-based hydrogen production. France’s 2020 Hydrogen Roadmap positions the country as a leader in low-carbon hydrogen, with plans to leverage its extensive nuclear power infrastructure to produce hydrogen. This stance has led to tensions with Germany over the role of nuclear power in the EU’s energy transition.
Spain, endowed with abundant renewable energy resources, has positioned itself as a potential hydrogen exporter to the rest of Europe. Its 2020 Hydrogen Roadmap outlines ambitious plans to develop a robust domestic renewable hydrogen industry and establish international partnerships, particularly with North African countries, to meet the EU’s growing demand.
Hydrogen Production and Distribution
The divergent national strategies have important implications for the development of hydrogen production and distribution infrastructure across Europe.
Renewable hydrogen production is a priority for the EU, with the bloc’s regulations setting stringent sustainability criteria. However, several Member States, such as Hungary and Italy, have expressed interest in blue hydrogen as a more cost-effective option, at least in the short term.
The deployment of hydrogen transportation and storage infrastructure is another crucial aspect. The Netherlands and Germany have emerged as pioneers, investing in the repurposing of existing natural gas pipelines and the construction of new dedicated hydrogen pipelines. In contrast, France has been more reluctant to embrace large-scale cross-border hydrogen infrastructure, preferring to focus on the development of regional hydrogen valleys or clusters.
Geopolitical Implications
The divergent approaches of EU Member States have significant geopolitical implications, both within the EU and on the global stage.
Energy security is a paramount concern, as the EU’s limited domestic renewable energy resources make it dependent on imports of renewable hydrogen and its derivatives. This has prompted Germany and the Netherlands to engage in hydrogen diplomacy, forging partnerships with potential exporting countries, such as Morocco and Chile.
The development of the hydrogen economy also has implications for the EU’s trade and diplomatic relations. As Member States position themselves as potential exporters or importers, they are shaping the emerging global hydrogen supply chains. This could lead to tensions, as countries compete to secure favorable positions in the future hydrogen market.
Finally, the EU’s ability to maintain its technological leadership in the hydrogen sector will be crucial. With China and the United States also making significant investments in hydrogen technologies, the EU must ensure that its regulatory framework and support schemes enable its domestic industry to thrive and capture a sizable share of the global market.
The geopolitics of hydrogen in Europe is a complex and rapidly evolving landscape, shaped by the interplay of EU-level policies and the diverse strategies of its Member States. As the EU continues to navigate this new energy frontier, the ability to harmonize national interests and strengthen cross-border cooperation will be key to realizing the full potential of hydrogen in the path towards a climate-neutral Europe.