Important hydrogen projects underway in Europe

The pictures that German Economics Minister Robert Habeck uploaded to his Instagram channel at the beginning of the year showed him in the depths of winter in Norway, where he was discussing energy supplies with the Norwegian government. No wonder, given that Germany became Norway's most important export partner last year, as the German-Norwegian Chamber of Commerce announced. Compared to the previous year, the export volume more than doubled in 2022. It amounted to around 68 billion euros at the end of the year, of which 58 billion was accounted for by gas deliveries alone. "These figures show the importance of Norway for Germany," says Michael Kern, managing director of AHK Norway. And Norway will remain important: "The two countries are striving for a close energy partnership outside oil and gas. This is predominantly based on wind power, hydrogen and CCS."

Hydrogen, in particular, is where the future of energy supply lies. The European Commission's REPowerEU plan, which aims to end EU's dependence on Russian fossil fuels and accelerate action to reduce emissions, states that "renewable hydrogen will be the key to replacing natural gas, coal and oil in hard-to-decarbonize industries and transport."

And so it was fitting that German Chancellor Olaf Scholz traveled to his french neighbors over the weekend. There, the main focus was on celebrating 60 years of the Élysée Treaty - with an attempt to patch up the somewhat frosty relations between Europe's two largest economies. Extensive resolutions on economic cooperation between the two countries, including the extension of the planned H2Med hydrogen pipeline, are likely to contribute to this.

Last year, the issue had caused controversy because Spain and Germany, which had been working on plans for a gas pipeline between the countries for some time, met with resistance from France. The French preferred to build a hydrogen pipeline between Spain and France. Now the deal was finalized: The hydrogen pipeline will be extended from Spain through France to Germany. Siemens Energy and Air Liquide are working together to build one of the world's largest hydrogen production facilities, which will be built in France.

The development of the necessary infrastructural measures will play a decisive role in determining how quickly renewable hydrogen becomes economically viable for Europe. As analysis institute Aurora Energy Research shows in a new study, this could happen as early as 2030 with green hydrogen from Australia, Chile and Morocco - provided a cross-border pipeline network is in place.

The now-announced expansion of the H2Med project to Germany could create such an operational pipeline network by 2030, connecting German consumers with Spanish hydrogen producers, Aurora calculates. If no pipeline supplies will be available by 2030, imports by ship would still be economically attractive, but more expensive than pipeline transports.

Anise Ganbold, Head of Research, Hydrogen, at Aurora Energy Research, said: "The global momentum behind the hydrogen industry shows no signs of slowing in 2023—export project announcements are coming thick and fast. Our analysis provides a fact check to this and finds that importing hydrogen into Europe even over long distances makes economic sense given the much lower cost of renewable energy in markets such as Morocco and Australia"

Bright prospects, then - if the speed of implementation of the planned projects is right. But at least the first foundations have now been laid.