Comment: Europe requires low-carbon hydrogen. The Middle-East and North Africa are capable of producing it
The European Commission has presented its ten-year plan to reduce 55% of EU’s emissions over the past year. It has three major pillars.
First, electrification for all consumer needs. The second is a massive increase in hydrogen production to replace the fuels used in industry. Third, mechanisms around a high price for carbon to reduce the economic effects of the transition in countries and communities most affected.
These pillars are not easy to achieve, but the hydrogen segment is. Despite achieving 24% reductions in emissions by 2019, the EU actually saw heavy transport emissions rise, and industrial decarbonisation efforts seem to have stagnated since 2009.
Although studies on European hydrogen demand are not all consistent, they all show significant increases. Even at the low end of the scale, there is a projected 700% growth in Europe’s hydrogen demand by 2050. Europe will need all the hydrogen it can get. Because domestic production is unlikely scale fast enough for this rapid increase in demand, a significant amount will have to be imported.
Europe has seven and a quarter years to jump from 24% to 55% emission reductions. There is no time to waste.
Fundamentally, difficult-to-electrify sectors – such as heavy industry and heavy transport – will require a new set of low-carbon fuels like hydrogen and ammonia to replace the fossil fuels in use today, as well as carbon capture and storage (CCS) to eliminate leftover emissions. It is relatively easy to convert hydrogen and ammonia into fuel-focused processes. They contain no carbon molecules, so are considered ‘zero-carbon’ at the point of use.
These fuels are the main climate threat.
Upstream emissions and the risk of carbon capture
The EU’s primary focus remains hydrogen produced using electrolysers powered by renewable energy. This is a laudable strategy that deserves enthusiastic backing, but it isn’t a quick fix.
Europe is in a race to build renewables fast enough to decarbonise the electricity grid, so may not have the additional renewable electricity needed to produce meaningful volumes of ‘green hydrogen’ in the near term. Europe’s largest port estimates it will be importing 20Mt per year in 2050, more than double Europe’s current total consumption.
There are many challenges associated with the alternative option: producing hydrogen from fossil gas with carbon capture and storage, often referred to as ‘blue hydrogen’.
First, methane could be a significant source of upstream emissions. Scientists have estimated that methane could outweigh blue hydrogen’s emissions at high carbon capture rate, as shown in the chart below.
As our colleagues at CATF demonstrated, methane is 80x more potent than CO2 so it is leaked and vented across the fossil gas network. The most urgent climate action of the decade is to reduce methane emissions. Research shows that significant reductions can be achieved with technologies that are already in place, at low or even negative costs. This is true regardless of whether fossil gas is used to make blue hydrogen.
Second, the inevitable CO2 emissions from extracting hydrogen form fossil gas must be considered. Blue hydrogen plants must adopt technology to prevent CO2 from entering the atmosphere, and then store it in geologic formations.
CCS technology has been safe and effective for almost 50 year. Today, commercial technology can be used in order to build hydrogen production plants that achieve 90% overall carbon capture or more.
It is possible to make hydrogen with lower methane leak rates than fossil fuels and advanced carbon capture units that have high capture rates. This results in a roughly 80% reduction of greenhouse gas emissions.
However, these capture rates have not been proven on a large enough scale. There are risks that the promised emission reductions will not be realized, just like any new climate technology. Many groups have been resistant to CCS being added to the technology mix due to these risks.
This links to a major reason we are yet to see such capture rates at scale: we haven’t really tried it yet.
Only 0.6% of fossil fuel-derived hydrogen today is produced using carbon capture technology. Without policy pressure to increase the production of low-carbon hydrogen, producers have no reason to cut the emissions for the ‘grey’ hydrogen produced from fossil fuels which we overwhelmingly use today.
Where the European Union must take action
Scaling up is a major concern in the low-carbon hydrogen economy.
The EU’s climate chief Frans Timmermans recently stated that “Europe is never going to be capable of producing its own hydrogen in sufficient quantities” in a speech aimed at potential low-carbon fuel producers in neighbourhood countries.
A combination of blue and green hydrogen is likely necessary to meet European and global hydrogen demand at least up until mid-century – the IEA’s flagship Net Zero by 2050 report shows a 62/38 percent split between the two even in 2050.
However, hydrogen is not a viable option in Europe unless there are climate controls that include strong methane management and significant carbon storage.
This is already being reflected in European policies to a certain extent. The term ‘low-carbon hydrogen’ is included in the EU’s Hydrogen Strategy and the Gas Package, but the details are lacking. It’s crucial that the Gas Package, in particular, lays out the terms to ensure that hydrogen imports will be climate beneficial.
The Commission has not yet established a certification system for low-carbon hydrogen, and plans to do so in 2024. That’s far too late. Many member countries have already secured import deals and are now in the process of creating their own schemes. This will lead to confusion among producers. These certification schemes do not take into account adequate life cycle analyses. They also ignore upstream and transport-related emission which must be addressed. The EU must intervene.
The lack of clarity has impeded investment from potential hydrogen producers from the Middle East and North Africa. These countries have been long-standing energy partners with Europe, and they have the know-how and resources to increase hydrogen production. However, they believe that only green hydrogen will be accepted in Europe by importers. Producing blue hydrogen means significant infrastructure investments – these will not happen overnight.
The longer Europe takes in laying out its vision for hydrogen imports the longer it will take both regions to transition from the status quo that continues extraction, transport, and consumption of unabated fossilfuels.
As the EU seeks to build new energy relationships around world, it must find win-win solutions that address both the scale and speed required to reach climate goals while also addressing security issues in energy.
Olivia Azadegan is Clean Air Task Force’s energy transition director for the MENA region
Magnolia Tovar is Clean Air Task Force’s global zero-carbon fuels policy director
Source: Climate Change News