Authors: Gayle Kimberley & Nina Fauser
Why the hype?
With the EU 2050 targets of achieving carbon neutrality across all EU Member States, it is no surprise that the latest buzzword seems to be ‘hydrogen’. The use of hydrogen is an important solution which the EU is pushing, as it moves towards a low-carbon future and thus, various hydrogen-related funding opportunities are available, as discussed below. Indeed, hydrogen is a highly-efficient, low polluting fuel that can be used for transportation, heating, and power generation in places where it is difficult to use electricity. It could also be used as a CO2 neutral feedstock for chemical processes (ammonia-fertilizers). It is a safe, clean and versatile energy carrier and over the next decades, it will definitely be a catalyst for transforming Europe into a zero-carbon continent.
What is hydrogen?
Hydrogen is a colourless, odourless, tasteless and flammable gaseous substance, which is the simplest member of the family of chemical elements. It is also the most abundant chemical substance in the universe. The earliest known important chemical property of hydrogen is that it burns with oxygen to form water (H2O); indeed, the name ‘hydrogen’ is derived from Greek, meaning “maker of water.”
Uses of Hydrogen
Hydrogen can be applied across various sectors including industry, transport, power and buildings, and can be used in the following ways:
- Raw material to fuel or supply a process;
- Fuel;
- Energy carrier; and
- Energy storage.
One of the best features of hydrogen is that it doesn’t emit any carbon dioxide (‘CO2’), thus producing almost no air pollution. The use of hydrogen is an important solution which the EU is pushing, with the aim of reaching the goal of carbon neutrality by 2050, under the European Green Deal.
There are 3 types of hydrogen, namely grey, blue, and green hydrogen. Grey hydrogen is produced using fossil fuels such as natural gas and unfortunately, it accounts for roughly 95% of the hydrogen produced in the world today. Blue hydrogen is made from natural gas through the process of steam methane reformation. During this process, CO2 emissions are generated, however these are reduced through carbon capture and storage. Blue hydrogen is one of the methods which aims at cutting carbon emissions.On the other hand, green hydrogen is produced via the electrolysis of water. The electricity used in this process comes from renewable sources such as wind and solar energy. Green hydrogen is sometimes referred to a renewable, or clean hydrogen. As Europe looks to move towards a low-carbon future, the potential of green hydrogen has garnered increasing interest from several parties, including businesses, governments and investors alike.
Currently, the use of green hydrogen within the EU is rather limited. As a carbon-free energy carrier, hydrogen would also allow for the transportation of renewable energy over long distances and for the storage of large energy volumes. It offers a solution to decarbonise heavily emitting industry sectors which rely on fossil fuels, where converting to electricity is not an option.
The way forward
The European Commission published a “Hydrogen Strategy for a climate-neutral Europe” (the ‘Strategy’), which aims at making the production of hydrogen cleaner, and expanding its use in sectors where it can replace fossil fuels. The Strategy focuses primarily on renewable hydrogen since it has the highest potential of reducing carbon emissions. The Commission launched the “European Clean Hydrogen Alliance”, which will play a crucial role in steering and coordinating the rapid upscaling of clean hydrogen production and use in Europe.
The Strategy sets out the following 3 phases of development of the clean hydrogen economy:
- Phase 1: 2020-2024: the objective is to decarbonise existing hydrogen production for current uses (such as in the chemical sector) and promote it for new applications.
- Phase 2: 2024-2030: hydrogen must become an intrinsic part of an integrated energy system, with an objective to install at least 40 Gigawatt of renewable hydrogen electrolysers by 2030 and the production of up to 10 million tonnes of renewable hydrogen in the EU. In this phase, the use of hydrogen will be expanded to new sectors such as steelmaking, trucks, rail, and maritime transport applications.
- Phase 3: 2030-2050: renewable hydrogen technologies should reach maturity and be deployed on a large scale. The ultimate goal is for this to reach all sectors.
Funding Opportunities
The Next Generation EU recovery instrument consists of €750 billion worth of funding. Various funding programmes which target the hydrogen industry are outlined under this instrument, such as the “InvestEU” Programme. The aim of InvestEU is to support value chains by intervening at different levels of the industry, including hydrogen production and distribution. Furthermore, it will also contribute to supporting the deployment of hydrogen by incentivising private investment.
Another option is the EU Innovation Fund, which will pool together around €10 billion to support low-carbon technologies over the period 2020-2030, having the potential of demonstrating innovative hydrogen-based technologies. Hydrogen technology would also be eligible for funding under the Recovery and Resilience Facility.
Two other funds, namely the European Regional Development Fund and the Cohesion Fund, will be topped up by €55 million via the new initiative REACT-EU, which will also continue to be available to support the green transition. These additional funds will be provided in 2021-2022. Targeted support will be provided by the Commission, to build the necessary capacity for preparation of financially sound and viable hydrogen projects.
What projects are needed?
Hydrogen-related funding could extend over a number of innovative ideas. These could relate particularly to renewable hydrogen elctrolysers, steel making, and to the application of hydrogen to the field of transport as a whole. Examples of this could include:
- hydrogen-powered commercial vehicles, including taxis;
- hydrogen-powered ferries and boats;
- hydrogen-powered forklifts and other vehicles used in construction; and
- hydrogen-powered refueling stations.
Investing in hydrogen will lead to the fostering of sustainable growth and jobs, which will be critical in the recovery from the COVID-19 crisis. Clean hydrogen is one of the essential areas which must be tackled in the context of the energy transition. Renewable hydrogen offers a unique opportunity for research and innovation, creating economic growth and jobs across the full value chain and across the Union.
How do you think the potential of hydrogen to decarbonise our economy can be leveraged?
Do you have any ideas in mind which could be eligible for hydrogen-related funding?
Would you like to contribute to making EU carbon-neutral by 2050?
Here at Ewropa, we will assess your project, identify the appropriate funding opportunity and even help you find partners in other Member States. Ewropa’s team will take care of carrying out all the necessary research, liaising with external bodies and implementing the application process from A-Z.
We do recommend that you keep checking Ewropa’s website, LinkedIn and Facebook pages for further announcements on concrete calls for hydrogen-related funding opportunities. But if you already have a project which you would like to discuss, secure your funding now by contacting us on info@ewropa.mt and we will help you identify the right funding opportunity for your project!