Analytics, Energy, Energy Market, EU – CIS

"The new hydrogen economy can be a growth engine to help overcome the economic damage caused by COVID-19. In developing and deploying a clean hydrogen value chain, Europe will become a global frontrunner and retain its leadership in clean tech," he said.   

Commissioner for Energy Kadri Simson, said that with 75% of the EU's greenhouse gas emissions coming from energy, EU needs a paradigm shift to reach its 2030 and 2050 targets.

"The EU's energy system has to become better integrated, more flexible and able to accommodate the cleanest and most cost-effective solutions. Hydrogen will play a key role in this, as falling renewable energy prices and continuous innovation make it a viable solution for a climate-neutral economy," Simson said.

The European Commission said that the EU Strategy for Energy System Integration will provide the framework for the green energy transition. The current model where energy consumption in transport, industry, gas and buildings is happening in ‘silos' -- each with separate value chains, rules, infrastructure, planning and operations -- cannot deliver climate neutrality by 2050 in a cost efficient way; the changing costs of innovative solutions have to be integrated in the way we operate our energy system. New links between sectors must be created and technological progress exploited.

Energy system integration means that the system is planned and operated as a whole, linking different energy carriers, infrastructures, and consumption sectors. This connected and flexible system will be more efficient, and reduce costs for society.

For example, this means a system where the electricity that fuels Europe's cars could come from the solar panels on our roofs, while our buildings are kept warm with heat from a nearby factory, and the factory is fueled by clean hydrogen produced from off-shore wind energy.

There are three main pillars to this strategy -- first, a more ‘circular' energy system, with energy efficiency at its core; second, a greater direct electrification of end-use sectors; and for those sectors where electrification is difficult, the strategy promotes clean fuels, including renewable hydrogen and sustainable biofuels and biogas. 

The strategy will identify concrete actions to apply the "energy efficiency first" principle in practice and to use local energy sources more effectively in our buildings or communities.

There is significant potential in the reuse of waste heat from industrial sites, data centers, or other sources, and energy produced from bio-waste or in wastewater treatment plants. The renovation wave will be an important part of these reforms.

As the power sector has the highest share of renewables, the strategy recommends to increasingly use electricity where possible, for example for heat pumps in buildings, electric vehicles in transport or electric furnaces in certain industries.

A network of one million electric vehicle charging points will be among the visible results, along with the expansion of solar and wind power.

The Commission will propose a new classification and certification system for renewable and low-carbon fuels.

The strategy sets out 38 actions to create a more integrated energy system. These include the revision of existing legislation, financial support, research and deployment of new technologies and digital tools, guidance to member states on fiscal measures and phasing out of fossil fuel subsidies, market governance reform and infrastructure planning, and improved information to consumers.

In an integrated energy system, hydrogen can support the decarbonization of industry, transport, power generation and buildings across Europe. The EU Hydrogen Strategy addresses how to transform this potential into reality, through investments, regulation, market creation and research and innovation.

Hydrogen can power sectors that are not suitable for electrification and provide storage to balance variable renewable energy flows, but this can only be achieved with coordinated action between the public and private sector, at EU level, according to the European Commission.

The priority is to develop renewable hydrogen, produced using mainly wind and solar energy. However, in the short and medium term other forms of low-carbon hydrogen are needed to rapidly reduce emissions and support the development of a viable market.

This gradual transition will require a phased approach. From 2020 to 2024, support will be provided for the installation of at least 6 gigawatts of renewable hydrogen electrolyzers in the EU, and the production of up to one million tonnes of renewable hydrogen.

From 2025 to 2030, hydrogen needs to become an intrinsic part of the integrated energy system, with at least 40 gigawatts of renewable hydrogen electrolyzers and the production of up to ten million tonnes of renewable hydrogen in the EU.

From 2030 to 2050, renewable hydrogen technologies should reach maturity and be deployed at large scale across all hard-to-decarbonize sectors.

To help deliver on this strategy, the Commission is launching today the European Clean Hydrogen Alliance with industry leaders, civil society, national and regional ministers and the European Investment Bank.

The Alliance will build up an investment pipeline for scaled-up production and will support demand for clean hydrogen in the EU.

To target support at the cleanest available technologies, the Commission will work to introduce common standards, terminology and certification, based on life-cycle carbon emissions, anchored in existing climate and energy legislation, and in line with the EU taxonomy for sustainable investments.

The Commission will propose policy and regulatory measures to create investor certainty, facilitate the uptake of hydrogen, promote the necessary infrastructure and logistical networks, adapt infrastructure planning tools, and support investments, in particular through the Next Generation EU recovery plan.