The European Commission (EC) has approved a huge hydrogen initiative that would be financed by 15 European Union (EU) countries and 35 companies as it continues to diversify its energy supplies. 


Under the plan, EU member states would work on 41 “important projects of common interest” (IPCEI) to create a hydrogen hub. The IPCEI Hy2Tech initiative would contribute to EU decarbonization targets. It would also aid the bloc’s REPowerEU Plan, which is aimed at reducing the continent’s reliance on Russian fossil fuels. 

The plan’s projects include developing hydrogen generation technologies, hydrogen storage, production, transportation and distribution.

“Russia’s unprovoked and unjustified military aggression against Ukraine has only underlined the need for Europe to diversify its energy sources and fast-forward the green transition,” said EC Executive Vice President Margrethe Vestager. “Among the many technologies required, hydrogen proves to be an indispensable component.” 

EC’s Thierry Breton, commissioner for the Internal Market, said in June that “we see EU hydrogen production moving from ‘lab to fab’ with the objective of  “decreasing the EU’s greenhouse gas emissions by at least 55% by 2030 compared to 1990, and the absolute necessity to phase out as soon as possible our dependency on Russian fossil fuels.”

Creating A Market 

With no established market in Europe. EU member states and companies would work together to construct a hydrogen supply and demand hub. They have agreed to jointly fund about $5.5 billion for projects. The Commission expects to attract nearly $9 billion in private investments.

“There is no doubt that the EU, UK and Australia and other developed economies are very fixated on hydrogen just now, so the EU multi-billion euro funding  will encourage collaboration across borders and within Europe,” said University of Edinburgh’s Stuart Haszeldine, professor of carbon capture and storage.

Green hydrogen is produced by a renewable energy-powered electrolyzer splitting water. “The biggest problem to solve,” Haszeldine told NGI, “is how to make a lot of hydrogen at a cost comparable to gas. This used to be very difficult, but now with the rise in gas prices,  green hydrogen is a lot more feasible and could become a more stable and less volatile market. 

“Green hydrogen costs depend on electrolyzers and renewable electricity, and declining costs for solar and wind power technologies will help.”

What is also needed, Haszeldine explained, is a large supply of low carbon electricity to power the electrolyzers.  “So that means a lot more wind onshore and offshore…and I expect a lot more nuclear power too.”

Hydrogen currently accounts for less than 2% of Europe’s energy consumption, according to the EC. Fossil fuel imports including oil, natural gas and coal, have accounted for 57-60% of the gross energy consumption over the last five years, according to the Commission.

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The Hy2Tech brief published earlier in July said renewable hydrogen could be used “to replace fossil-based hydrogen for transport and industrial processes,  and to start new industrial products, such as green fertilizers and steel.”

Renewable hydrogen is also planned to support the EU’s electricity sector, providing long-term and large-scale storage, particularly beneficial for power grids, as it “allows for renewable energy to be kept not only in large quantities, but also for long periods of time,” the report said.

Although Hy2Tech would help reduce the bloc’s reliance on natural gas, it would not be achieved overnight. Under the REPowerEU plan published in May, the goal is to produce 10 million tons (Mt) and import 10 Mt of renewable hydrogen by 2030. 

The EC report did not indicate if blue hydrogen, which is produced from natural gas, would be included in the plan, as details about the projects have yet to be disclosed

“But this so-called blue hydrogen is a seductive cul de sac,” Haszeldine said, “as it still requires a supply of gas. In fact, our calculations show that 2.5 times more gas is needed to get the same total energy. A better method in the medium- and long-term, is to improve electrolyzers – which split water into oxygen and hydrogen – both valuable.

“This is being done now to make green hydrogen, but the cost needs to decrease and the size of equipment to increase – an important point for EU hydrogen projects to focus on.”