EU calls for rapid expansion of green hydrogen despite infrastructure and financial challenges
It’s undeniable that green hydrogen has emerged as a cornerstone in the transition towards renewable energy sources, as it offers an environmentally friendly alternative to traditional fossil fuels. However, the development and roll-out of green hydrogen are fraught with challenges that need to be addressed to harness its full potential. The European Economic and Social Committee (EESC) has underscored the critical role green hydrogen will play in the future energy system of the European Union — and the primary challenges it faces.
A list of (manageable) hurdles
The first one is the need for a massive scale-up in the production of electrolyses. Electrolyses are the devices used to separate hydrogen from water, a process powered by renewable electricity. To meet future demand, the EU must significantly increase its manufacturing capabilities. Currently, production capacity is limited, and a rapid expansion is essential to avoid bottlenecks. The infrastructure to support the widespread use of green hydrogen also requires substantial development.
The second obstacle is the need for sufficient clean electricity production to fuel the electrolysis process. Since hydrogen is only as clean as the electricity used to produce it, ensuring that renewable energy sources such as wind and solar are available is crucial. However, renewable energy production is still developing and needs to be scaled up rapidly to meet the expected demand for green hydrogen.
A third challenge falls under the financial implications of developing green hydrogen infrastructure are also substantial. Building pipelines and other infrastructure to transport and store hydrogen will require a deep investment. This comes at a time when public and private funding is already stretched thin due to other green initiatives. As the EESC notes, “smart and integrated planning” is essential to ensure that resources are allocated efficiently and that hydrogen infrastructure can be built in a cost-effective manner. And in addition to the financial challenges, there are technical barriers. Hydrogen, as a light and highly reactive gas, presents unique storage and transport difficulties. Pipelines that can safely transport hydrogen over long distances must be developed, and suitable storage solutions need to be identified. These technical barriers, if not properly addressed, could hinder the rapid adoption of hydrogen technology.
The rollout of green hydrogen, which the EU and its governments want to speed up, must also consider the social and economic impact. In that vein, the EESC emphasised that fair distribution of the costs associated with hydrogen development is critical. This includes ensuring that both public and private investments are directed in a way that supports not only economic competitiveness but also social well-being. Investments in hydrogen should promote job creation and support industries transitioning to greener processes.
It will all be worth it
But one of the key arguments in favor of hydrogen is its potential to decarbonise sectors that are difficult to electrify. According to the EESC, the use of hydrogen should initially be targeted towards industries such as steel production and aviation, where direct electrification is not feasible. Hydrogen can also serve as an energy storage medium, helping to balance supply and demand in renewable energy systems. Another critical aspect of green hydrogen development is the establishment of robust certification schemes. What the EESC advocates for is certification systems that guarantee not only environmental standards but also social standards, ensuring that workers’ rights and safe working conditions are maintained. Certification schemes should be managed by a central EU body to prevent reliance on voluntary industry standards, which may not be as stringent.
Despite the challenges, the importance of green hydrogen cannot be overstated. It has the potential to really reduce greenhouse gas emissions and decrease the EU’s reliance on fossil fuels. As renewable energy sources continue to grow, hydrogen can act as a complementary energy carrier, enabling deeper integration of renewable energy into the grid. This will help the EU meet its climate targets and reduce its dependence on external energy supplies. Therefore, public funding for hydrogen projects should prioritise primarily renewable hydrogen, as defined by the Commission Delegated Regulation (EU) 2023/1184. However, the EESC acknowledged that, during the transitional phase, low-carbon hydrogen may also need to be supported to ensure the rapid scaling of hydrogen infrastructure. This pragmatic approach ensures that progress is not delayed by stringent adherence to green-only criteria.
The financial benefits of investing in green hydrogen are also deeply impressive. By developing a robust hydrogen infrastructure, the EU can position itself as a leader in the global energy transition. This will enhance the EU’s competitiveness in comparison to other regions, while also creating new economic opportunities. In the long term, these investments are expected to pay off by reducing energy costs and increasing energy security.
Which means that social and labor considerations are also central to the hydrogen transition. The EESC highlights the importance of protecting workers’ rights and ensuring that the transition to hydrogen is fair and inclusive. This means not only creating new jobs in the hydrogen sector but also supporting workers in industries that may be negatively affected by the shift away from fossil fuels.
It’s therefore no surprise that the European Union’s commitment to green hydrogen reflects a broader global trend towards renewable energy. As countries worldwide grapple with the challenges of decarbonisation, hydrogen offers a versatile and scalable solution. The EU’s leadership in this area will be critical to shaping the global energy landscape in the coming decades.
