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SWASTI RAO 27
January, 2023
Green hydrogen defines EU’s energy security goals.
India is its gateway to achieve them.
With rising cooperation between India and European
partners, the road to the EU's transition to renewables will pass
through trusted connections such as New Delhi.
A green hydrogen plant | Representational image |
www.airbus.com
No conversation on clean energy and climate
goals today is complete without deliberations on the new buzzword —
hydrogen — and its various versions with differing efficacies and
environmental costs. They range from grey to blue to green to
turquoise to pink — each requiring a specific infrastructure and
technological innovation.
Europe, with its quest for energy security
accelerated by the ongoing Ukraine war, has been a global pioneer in
shaping the clean energy discourse. But the shift to clean energy
sources will entail a geostrategic reset and different supply chains
that can be trusted and aren’t merely cost-efficient. It also answers
some of the questions about Europe’s interest in Ukraine, which is
touted to become the continent’s hydrogen
hub by 2050.
Furthermore, it brings attention to India as New
Delhi recently came up with its own green hydrogen policy, which
is aimed at making the country a net exporter of green hydrogen by
2030.
In the midst of the Ukraine war, the European
Union (EU) has vouched for
€3 billion from its Innovation Fund to be invested worldwide for the
production of clean hydrogen. With rising cooperation between India
and European partners aiming to
help the former set up clean hydrogen infrastructure, the road to
Europe’s transition to renewables will pass through
trusted connections such as New Delhi.
The question is – How realistic are these aspirations? And what
must nations be prepared for?
Why is
hydrogen the big thing?
Hydrogen’s massive utility comes from the fact that unlike any other
traditional fossil fuel, the combustion of green and/or blue hydrogen
does not produce a lot of carbon dioxide (CO2). At the same time,
it creates high quantities of energy.
There’s also a constant search for the most
energy-efficient hydrogen variant in the spectrum. Currently,
the bulk of the hydrogen is ‘grey’, produced by steam methane
reforming (SMR) natural gas and coal gasification. But there is
another way of producing hydrogen, which is
‘green’, and that is through electrolysis of
water—producing electricity using clean renewable sources such as
water, wind, or sunlight.
Green hydrogen is the universal favourite. Until recently, it was not
cost-effective. But with the decreasing cost of renewables and
increasing efficiency of electrolysers — coupled with the green
pastures of government subsidy — the industrial production of green
hydrogen has picked up.
Yet another player in the energy game is
the ‘blue’ hydrogen. It is a totally different process of
producing hydrogen from fossil fuels like natural gas or by coal
gasification in a way that minimises its greenhouse emission.
If done efficiently, GHG emissions can be reduced
to net zero. However, as with most emerging technologies, research on the
environmental hazards of blue hydrogen is a mixed bag.
The turquoise hydrogen could be a solution for
blue hydrogen’s fuel issues. It does not require the same CCUS (carbon
capture, utilisation and storage) as blue hydrogen does. Producing
this hydrogen variant, however, is too futuristic to make immediate
economic sense.
Even more futuristic is the research around pink hydrogen, which can
be generated through nuclear energy-powered electrolysis. One major
European player that can pioneer pink hydrogen production is France.
EU’s evolving hydrogen pathways
For the EU, 2019 was a coming-of-age year in many
ways. Right from listing China as a systemic rival to sharpening its
focus on the Indo-Pacific engagement, the EU commission also
presented the European
Green Deal, which has established the arduous
objective of making Europe carbon neutral by 2050. Its difficulty lies
in achieving that goal while also maintaining the desired economic
growth, which is in doldrums because of the global recession.
In 2020, this important document was followed by
the publication of the EU
Hydrogen Strategy, which took a more
realistic view of energy consumption patterns and requirements within
the region. It was designed with a “phased” approach that aims to
phase down fossil fuels and simultaneously phase up hydrogen shares to
14 per cent by 2050.
The plan is
largely divided into three phases from 2020 to 2050. In the first
phase, stretching from 2020 to 2024, the EU is focussing on installing
at least 6 gigawatts (GW) of renewable hydrogen electrolysers and
producing up to 1 million tonnes of renewable hydrogen. In the second
phase — from 2025 to 2030 — the EU will focus on making hydrogen an
intrinsic part of the bloc’s integrated energy system, which aims to
ramp up production by ten times by 2030. The bloc has even bigger
plans for the third phase — to deploy green hydrogen in all
large-scale sectors by 2050.
The question is: Where will all the green hydrogen come from and how
environmentally sustainable is it?
While developing a hydrogen market has been the
EU’s need for a few years, its latest documents
have better clarity on the role of blue and green hydrogen within the
bloc’s energy regulatory framework. While green hydrogen is definitely
favoured, the report states that the EU will promote the use of blue
hydrogen as well — at least till 2030 to compare the performance and
viability of both.
This has been a welcome step in EU markets as previous ambiguity on
legal frameworks on blue and green hydrogen
impeded infrastructural development. Taken together, the EU’s plan of
action for cumulative investments is to the tune of approximately €500
billion to develop clean hydrogen by 2050.
Challenges ahead
The road to green hydrogen is not free from problems. Electrolysis
requires ample amounts of water, a clean electricity supply, and other
logistics in place. The biggest challenge to green hydrogen production
is the fuel costs — accounting for nearly 50 to 70 per cent of the
entire production cost.
Keeping this in mind, Europe will have to shift
its expanding hydrogen production outside the
continent. Just like oil and gas, green hydrogen production will
require trustworthy supply chains that are cost-effective and have
smooth transport routes.
Big players like Germany assess more realistically that green hydrogen
production in the future might be more cost-efficient outside the
country. In its 2020 National Hydrogen Strategy, Berlin pledged €2
billion for hydrogen projects in Ukraine.
The Middle East North Africa (MENA) region is
resource-rich when it comes to liquefied natural gas
(LNG) reserves. But the countries’ infrastructure development
potential for green hydrogen is low due to the lack of sufficient
water supply.
India is identified as
a ‘renewable-constrained’ but ‘partially high infrastructure
potential’ region. So, while it cannot really champion hydrogen export
as New Delhi aspires, it can
play an important role in building the infrastructure required by the
EU in future.
Green hydrogen production opens up more
possibilities for cooperation among trusted partners. The Ukraine war
has shown that dependencies are catastrophic, no matter how
cost-effective. The future of hydrogen and its role in Europe’s energy
security will generate an intersectional mesh of wide-ranging foreign
and security policy imperatives alongside technological innovations.
India, with its own policies for climate goals, can join the
bandwagon.
There is little doubt that the future of the world’s energy needs lies
in clean production. Those pioneering the transition now will be
setting the rules of engagement and rivalries around the most
abundantly found element in the universe – hydrogen.
The writer is
an Associate Fellow, Europe and Eurasia Center, at the Manohar
Parrikar Institute for Defence Studies and Analyses. She tweets @swasrao.
Views are personal.
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