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The Battle over Blue and Purple Hydrogen’s Place in the EU’s Green Taxonomy

Brief by Valentin Deleniv, Policy Briefs Coordinator

Europe needs hydrogen — but is the EU willing to decarbonise it?

Although the EU has made renewable energy (RE) development the centrepiece of its decarbonisation drive, the stark reality — as the ongoing energy crisis has made clear — is that as long as RE capacity remains far below demand, gas will continue to play an essential role in meeting Europe’s energy needs.

This is where hydrogen comes in. Industry and policymakers alike have pinned their hopes on hydrogen as a low-carbon gas alternative which can be used to power hard-to-electrify sectors and to maintain a buffer for when gaps between energy supply and demand arise. Hydrogen is produced by either running a current through water to separate hydrogen from oxygen (electrolysis), or through steam methane reforming (SMR), which separates hydrogen from methane molecules and captures leftover carbon using carbon capture and storage technology. Electrolysis using RE produces what’s called ”green” hydrogen, while SMR yields ”blue” hydrogen.

The catch? We can’t produce nearly enough of it (yet). The European Commission’s Renewable Energy Directive proposal specifies that half of all hydrogen used in industrial processes and 2.6% of hydrogen transport fuels will need to be low-carbon by 2030. This constitutes a thousand-fold increase compared to current production and would require roughly 500 TWh of RE generation, which is more than all existing wind power in the EU. Accordingly, unless the Green Deal makes room for considerable additional RE investments, green hydrogen production risks siphoning RE away from electrified segments of the economy and leaving gaps which would have to be filled by fossil fuels.

Consequently, some have suggested greater investment into blue hydrogen until RE generation catches up. But environmental concerns and risk of vendor lock-in could kill such an initiative before it even gets off the ground. A recent investigation found that blue hydrogen releases up to 20% more greenhouse gas than simply burning natural gas directly. This is due to methane leakage in natural gas extraction, transport and storage; energy losses during SMR; and inefficiencies in carbon capture and storage. Moreover, seeing as hydrogen won’t be affordable for domestic consumers for another decade or so, betting on equipment like hydrogen-ready boilers could prolong reliance on natural gas when instead we could pursue electrification and energy-efficiency now.

Finally, the RE deficit bumps into another one of the EU’s great headaches: the green status of nuclear energy. Recently, the Commission has classified hydrogen produced using nuclear power (”purple” hydrogen) as ”low-carbon”, making it a part of the green financial taxonomy. Continued resistance from Member States opposed to nuclear energy (most importantly — Germany), however, means that while the Commission’s decision may be enough to prevent or slow a complete nuclear phase-out, it is unclear whether the current climate will support the substantial investments into nuclear capacity needed to realise the Commission’s hydrogen ambitions.

The EU has some difficult decisions ahead of it. Scaling up green hydrogen will require large-scale infrastructure development, but more importantly an immense increase in RE capacity at a time when Member States are already calling for greater ”flexibility” in interpreting European decarbonisation directives. And unless future research provides evidence to the contrary, blue hydrogen is not the silver bullet it was thought to be. Lastly, while the current energy crisis has influenced the debate even among traditional opponents of nuclear energy, this may not create enough purple hydrogen to remedy the shortfall.

— Written by Valentin Deleniv, Policy Briefs Coordinator. Read more about this topic in The Economist and Euractiv (hydrogen’s need for low-carbon nuclear + turning hydrogen into a renewable boom + the polarised hydrogen debate + hydrogen risking fossil fuel lock-in).

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Transatlantic Perspectives — our short-form outlet — gives young atlanticists a voice to explore new and innovative ideas. To explore our broader policy work, visit our website above. Our Policy Briefs, in turn, provide digestible, insightful analysis that goes beyond the news.

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