Post-pandemic era, hydrogen and EU’s Green Recovery
2020 will be one of the turning points in the 21st century. As the tension between the U.S. and China is growing, global economy order was under an ambiguous and shaking situation. Moreover, when society still tries to recover from the first wave of coronavirus, the second wave is already looming. Facing this systematic pressure, the voice for applying sustainable transition as recovery motor has become louder, especially coming from the European Union. In recent year, different actors, e.g. governments, business, and NGOs, etc., have gradually seen the sustainable issue as a mainstream action paradigm for social and business development. The current situation seems to create an opportunity to accelerate and deeper society’s sustainable transition process. Echoing from its 2019 Green Deal Strategy, EU has announced a Green Recovery Deal in this July to stimulate green transportation, clean industry and housing renovation. The EU government has earmarked 750 billion euro of policy fund to support climate-related technology and climate-neutrality projects. The goal is to tackle climate change and strengthen the economy growing at the same time.
One of the clean technologies that the Green Recovery would like to stimulate is hydrogen. To be specific, the EU government has a vision to grown the bloc’s renewable hydrogen production capacity. Hydrogen can be used as a fuel cell for transportation, or it can blend with natural gas to supplement industry electricity demand. Technologically speaking, renewable hydrogen is a type of hydrogen that produce from renewable energy — in other words, using the residual electricity generated by a solar panel or wind turbine to conduct electrolysis to separate hydrogen and oxygen from water. In this case, hydrogen can be the energy carrier to store the residual energy that generates renewable energy sources. According to Bloomberg’s report, the EU’s hydrogen roadmap under the Green Recovery is to increase six-fold of hydrogen production, which now is less than 1% of total energy consumption, by 2024. The implementation strategy is encouraging energy system integration, which means “bringing together the electricity and gas sectors on the energy supply side and linking them with major energy-consuming sectors on the demand side — such as transport, building household, industry and agriculture .”[4] According to Kadri Simson, EU energy commissioner, hydrogen will be the cornerstone of the energy system integration under the EU’s green development process.
There are three main barriers for the (renewable) hydrogen development. First, a European-wide regulation package is needed. This package should include instructions about (1) harmonize different nations’ regulatory systems; (2) remove infrastructure and interconnectivity limitations between bloc member; (3) provide clear supply chain definition and tax responsibility for electrolysis and storage providers; and (4) looser the state aid rules. Secondly, hydrogen technology still needs to improve for market-scale. Smaller-size production and delivery equipment are required. Lastly, the cost of hydrogen production, especially the electrolysis process, need to decrease. The critical business activity is investing efficiency measures in the whole hydrogen value chain.
Sources:
[1] Bloomberg (2020). Europe unveils plan to boost hydrogen market in green recovery. Retrieved from https://www.jwnenergy.com/article/2020/7/8/europe-unveils-plan-boost-hydrogen-market-green-re/ (08.22.2020).
[2] BloombergNEF (2020). Global gas industry set to resume growth post-pandemic, adopt low-carbon technologies for long-term growth. Retrieved from https://about.bnef.com/blog/global-gas-industry-set-to-resume-growth-post-pandemic-adopt-low-carbon-technologies-for-long-term-growth/ (08.22.2020).
[3] Harder, A. (2020). How Europe’s green pandemic recovery will push the rest of the world. Retrieved from https://www.axios.com/europe-green-pandemic-recovery-6fabad13-1c3c-4dfb-9316-1ad09a05f858.html (08.22.2020).
[4] Janssen, D. (2020). Policy brief: Energy system integration. Retrieved from https://www.euractiv.com/section/energy/linksdossier/policy-brief-energy-sector-integration/ (08.22.2020).
