European Hydrogen Bank
On Sept. 14, President of the European Commission, Ursula von der Leyen, in her annual State of the Union speech, announced the intention of creating a new ‘European Hydrogen Bank’ that is potentially a game-changing development for the bloc’s hydrogen sector. Ms der Leyen hinted that the bank would “guarantee” purchases of hydrogen to create certainty of demand, using seed capital from the €38bn Innovation Fund. “We need to move our hydrogen economy from niche to scale,” she told her audience in the European Parliament, adding that “[H]ydrogen can be a game changer for Europe. We need to move our hydrogen economy from niche to scale. With REPowerEU, we have doubled our 2030 target to produce ten million tons of renewable hydrogen in the EU, each year. To achieve this, we must create a market maker for hydrogen, in order to bridge the investment gap and connect future supply and demand. That is why I can today announce that we will create a new European Hydrogen Bank.”
The new European Hydrogen Bank will guarantee the purchase of hydrogen, notably by using resources from the Innovation Fund, through an investment of €3 billion to help build the future market for hydrogen. As per the REPowerEU – the European Commission’s plan to make Europe independent from Russian fossil fuels – the European Union will strive to achieve a supply of twenty million tons (20Mt) of green hydrogen – 10Mt produced and 10Mt imported – by 2030 that are echoed by the new binding targets for different sectors:
· renewable fuels of non-biological origin (RFNBO) at least 5.7% of all fuels by 2030, including 1.2% in the hard-to-abate maritime sector;
· 50% of the industry to transition to green hydrogen by 2030 (70% by 2035).
This will help ramp up the sector and make hydrogen a key component of Europe’s green energy strategy. Additionally, for the transport sector, greenhouse gas intensity reductions of at least 16% have been set by 2030. These are strong signals that Europe is committed to de-carbonising the continent. Hydrogen will have a vital role to play in this initiative.
Hydrogen is the simplest element. Each atom of hydrogen has only one proton. Hydrogen is also the most abundant element in the universe. Stars such as the sun consist mostly of hydrogen. The sun is essentially a giant ball of hydrogen and helium gases. Hydrogen occurs naturally on Earth only in compound form with other elements in liquids, gases or solids. Hydrogen combined with oxygen is water (H2O). Hydrogen combined with carbon forms different compounds — or hydrocarbons — found in natural gas, coal and petroleum.
As source of energy
Because hydrogen does not exist freely in nature and is only produced from other sources of energy, it is known as an energy carrier and it can deliver or store a tremendous amount of energy. It is a clean-burning fuel, and when combined with oxygen in a fuel cell, hydrogen produces heat and electricity with only water vapor as a by-product. Today, hydrogen is most commonly used in petroleum refining and fertilizer production, while transportation and utilities are emerging markets.
Hydrogen can be produced — separated — from a variety of sources including water, fossil fuels or biomass.
Green hydrogen: It is produced by electrolysis of water using renewable energy (like solar, wind) and has a lower carbon footprint. Electricity splits water into hydrogen and oxygen.
Brown hydrogen: It is produced using coal where the emissions are released into the air.
Grey hydrogen: It is produced from natural gas where the associated emissions are released into the air.
Blue hydrogen: It is produced from natural gas, where the emissions are captured using carbon capture and storage.
Importance for EU
Hydrogen forms a key part of the European Green Deal, which is the EU’s long-term growth path to make Europe climate natural by 2050. This target is enshrined in the European Climate Law, as well as the legally binding commitment to reduce net greenhouse gas emissions by at least 55% by 2030, compared with 1990 levels. The bloc has doubled its 2030 target to produce ten-million tons a year of renewable hydrogen in the EU. This domestic target, combined with hydrogen imports of ten-million tons a year, would replace natural gas, coal and oil in hard-to-carbonise industries and transport sectors.