European Union Announced a €2 Billion Industrial Collaboration on Clean Hydrogen

The president of the International Energy Agency (IEA) warned that a head start may not be in Europe’s favor as the EU launched its €2 billion cooperation with industry to expedite research and development in green hydrogen. 

Fatih Birol, the IEA’s executive director, reminded the audience that Europe was the first to invest in solar energy a decade ago. Money was spent on subsidies, giving Europe a head start, only for China and other competitors to catch up once the market for the technology was established. Solar panels are now produced in eight out of 10 countries outside of Europe. 

Green hydrogen, in Birol’s opinion, is currently at a comparable phase. There is a lot of ambition and movement, but there isn’t yet a market. Europe is taking the lead once more, and the cooperation is designed to ensure technical leadership. 

One of its key goals is to scale up green hydrogen electrolyzers from megawatt to gigawatt scale, which uses renewable energy to split water into hydrogen and oxygen. This will lower the cost of technology, which is currently too costly to compete in the market. 

The new cooperation is an important part of the European Union’s hydrogen strategy, which was introduced in July 2020. It draws on earlier industrial cooperation under the former Horizon 2020 program, which was co-founded half and half by industry and the Horizon Europe research project. 

Policymakers authorized the hydrogen collaboration earlier this month as part of a €22 billion package of industrial partnerships. Calls for 2022 are already open, with €300 million in funding expected to be released in the first quarter of the following year. 

By 2030, Europe wants to lower the price of hydrogen down to €1.80 per kilogram. With natural gas prices on the increase, hydrogen could become a cost-effective option. 

Scaling up the technology, developing worldwide collaboration, and cooperating with industry and researchers are all part of Von der Leyen’s strategy for getting there. 

Regions across Europe are currently expanding their hydrogen marketplaces. The EU Innovation Fund awarded €1 billion in funding for seven green energy demonstrator projects, four of which would address hydrogen constraints, just two weeks ago. Member states are also putting money towards hydrogen with their EU recovery fund shares.  

The goal is to create hydrogen clusters that bring together infrastructure connected to hydrogen. In the Netherlands, there is one that covers the full value chain, and now Mallorca and a border region in Slovenia, Italy, and Austria are attempting to imitate it. 

Green hydrogen linkages are being established on a global scale. The Commission is looking at northern and sub-Saharan Africa as a potential source of solar power electricity. 

However, while Africa is a natural partner for Europe, Birol warns that Sub-Saharan Africa has yet to create enough renewable energy for its own consumption, let alone export. Despite the region’s huge potential, Belgium now generates twice as much solar power as Sub-Saharan Africa. Furthermore, there are 600 million individuals who do not have access to energy in the country. 

With the conclusion of the COP26 meeting in Glasgow, the race is expected to pick up speed as investors unleash private capital. The conference’s key message, according to Birol, is a signal to investors to get money flowing into sustainable energy.