— 2022-09-16
News from Brussels
President of the European Commission Ursula von der Leyen announced on Wednesday 14 September the intention of creating a new ‘European Hydrogen Bank’. However, hydrogen is not an energy source but an energy sink, requiring vast amounts of electricity to be produced, writes Jonas Helseth.
The State of the EU speech by European Commission President von der Leyen predicably and understandably followed the lines of recent EU policy on Ukraine and Russia and addressed the energy crisis – notably with highly anticipated plans for capping energy prices.
However, one specific element of the President’s speech came as a surprise, not only to outsiders but apparently also to many of her Commission colleagues: the announcement to “create a new European Hydrogen Bank”.
There have already been signals that this Commission has been easy prey for the hydrogen hype. A hype that appears to have captured its leadership.
We now see a departure from the initially quoted reasons for promoting hydrogen in the first place: to provide a renewable alternative to fossil fuels; to support the EU Green Deal and deliver on the Paris Agreement’s climate ambition.
Hydrogen, a well-known energy carrier, is increasingly being presented as an energy source. Hence also as a solution to Europe’s current energy supply crisis. Hydrogen, however, is not an energy source, it’s an energy sink.
Its production (when not derived from natural gas, which we dare hope few now believe should be relied upon), requires vast amounts of electricity for electrolysis, an energy-intensive process to split water into oxygen and hydrogen. For hydrogen to be renewable, all this electricity must obviously come from renewable energy sources.
Today, Europe’s grids are nearly all deeply dependent on fossil fuels, so grid-connected, electricity-hungry electrolysers in most locations will increase both emissions and electricity baseload demand. That is demand for non-variable sources like coal, gas, and nuclear energy.
This has long been dismissed by the hydrogen lobby as a necessary, temporary evil in the scale-up phase of a solution our future economies need. Even if we were to ignore the climate emergency and energy crisis, such arguments could only be accepted if plans for electrolysis scale-up were matched by (at least) a similar scale-up of renewable energy.
Without clear and transparent rules requiring such additionality, scaling up EU electrolysis won’t only have short-term negative consequences, but will cannibalise the entire Energiewende – our efforts to decarbonise our current electricity demand.
The hydrogen hype, fuelled by the Commission, has entailed various sectors making announcements in the category ‘hydrogen readiness’; a term meaning a fuel shift to run on gas, with the possibility to shift to hydrogen once available at scale. Notably, this ‘hydrogen readiness’ logic provided the twisted basis for labelling gas investments as ‘sustainable’ under the EU Taxonomy.
Particularly in the EU steel industry, we’ve seen a range of such announcements, most recently this month from ThyssenKrupp. In 2021, Tata Steel Netherlands did the same.
We did a case study, showing how eight wind farms the size of the biggest existing one would be needed to decarbonise Tata at Ijmuiden. Sounds good, right? Except no plan exists to build those additional wind farms. Dutch grid-connected electrolysis at scale will for a long time have to rely on coal and gas!
The EU steel industry is left in a desperate situation, as it has been incentivised to “go for hydrogen”. The plan was to run steel mills on gas, until such time when enough hydrogen is available.
Meanwhile gas is unaffordable, prompting the Commission to water down further its sustainability criteria for ‘green’ hydrogen, to boost electrolysis scale-up for hydrogen supply.
The result? Publicly subsidised, electrolysis-driven demand on our already squeezed electricity grids. This means the rest of us, consumers and businesses, will pay even more for what’s left.
Where is the Commission’s impact assessment for this apparent insanity?
This brings us back to the core point: hydrogen is not an energy source. Its production requires vast amounts of energy. Energy we currently don’t have, hence the energy crisis.
When von der Leyen now announces €3bn of taxpayers’ money “to help build the future hydrogen market”, this is not boosting renewable energy production or reducing energy demand. It’s increasing energy demand, costs and emissions.
The only way to end our dependency on gas is to use our renewable energy resources as efficiently as possible during the scale-up phase: direct electrification wherever possible is what gives the biggest bang for bucks.
This obsessive, misguided insistence on hydrogen to replace Russian gas will prolong fossil dependency, throw the EU Green Deal under the bus, drive consumer and business energy costs up even further, and risk inducing another recession.
To make things worse, it seems as though the European Parliament is as lost to the Hydrogen Hype as the Commission. At the time of writing this, MEP Pieper’s Amendment to Article 27.3 of the EU Renewable Energy Directive was approved.
The approved Amendment proposes to greenwash renewable (‘green’) hydrogen, with massive negative climate impact until well after 2030(!). Electrolysers connected to the grid will not be required to run on renewables. They will be allowed to run on fossil sources, but still be considered and labelled ‘renewable’ in the EU, receiving subsidies.
The rationale is ‘flexibility’, to scale up an industry that could drive us into a self-inflicted recession. As the societal price becomes evident, the political price is going to be at least as high.
Von der Leyen concluded her hydrogen bank announcement today by stating: “This is our Green Deal for Europe”. If this holds true, Timmermans, Vice-President for Climate, should resign without delay.