In November 2022, the Minister of Energy Transition, Agnès Pannier-Runacher, and the Minister of Industry, Roland Lescure, announced a revision of the national hydrogen strategy. Three years after its presentation in September 2020 by Ministers Bruno Le Maire and Barbara Pompili, it is appropriate to take stock of the initial milestones and address any potential shortcomings in the envisioned plan.
First and foremost, we should acknowledge the efforts made over the past three years, which have led to significant progress in deploying hydrogen technologies. Several projects have been initiated, such as the ZEV project in Auvergne-Rhône-Alpes and the H2 Corridor in Occitanie. Within local communities, bus projects have multiplied. At the European level, hydrogen has been recognized as a strategic value chain, leading to an Important Project of Common European Interest (IPCEI). Two waves of projects have already been published. For the first wave, known as Hy2Tech1, which focuses on the components of the value chain, ten French projects (out of a total of 41) have been selected, which will notably enable the construction of gigafactories for electrolyzers, fuel cells, and hydrogen tanks in France. Subsequent waves are expected to lead to the development of significant projects.
Concurrently, the French Environment and Energy Management Agency (Ademe) has supported the development of over 35 ecosystems2 through two calls for projects, with a total funding of 320 million euros, resulting in 80 megawatts of electrolyzer capacity.
Furthermore, in late August, the Minister of Energy Transition announced the establishment of a support mechanism for renewable or low-carbon hydrogen production, aiming to deploy one gigawatt of electrolysis through calls for tenders of 150, 250, and 600 megawatts from 2024 to 2026. An amount of 4 billion euros has been allocated to this support within the overall 9.2 billion euros promised to the hydrogen sector by 2030.
During the past year, France Hydrogène collected all the projects envisaged by industry players in the hydrogen sector in France. In total, 250 projects3 are expected to develop, particularly within seven geographical clusters, including ports, the Seine and Rhône valleys, and regions bordering Spain and Germany. During the first half of this year, the collection of needs from the various industry sector strategic committees, representing different components of the French industry, led to an estimate of hydrogen demand by 2030 ranging from 680,000 to 870,000 tonnes. This confirms the need for an electrolysis capacity of 6.5 gigawatts by 2030, in line with the initial objectives of the national strategy.
While we can rightfully celebrate these significant advancements in hydrogen technology implementation in France, it is crucial to recognize that few projects have been decisively initiated to date.
The reasons for this hesitancy, if not outright delays in decision-making, are numerous. Beyond inflation affecting business plans and supply chain issues causing delays in equipment delivery, the revision of the national strategy offers an opportunity to examine the underlying reasons for these delays.
Firstly, there is insufficient demand stimulation. The mechanisms in place so far have favored the upstream side, which includes the production of materials across the entire value chain and hydrogen production itself, but have not sufficiently addressed the utilization of hydrogen in industrial processes or mobility. To reduce costs and promote hydrogen development, France Hydrogène advocates for the establishment of large-scale territorial ecosystems, bringing together various industrial and mobility applications within a cluster, reaching a minimum capacity of 20 megawatts, beyond which economies of scale become less pronounced.
To encourage stakeholders to commit more decisively to their projects, providing them with visibility is absolutely necessary. Generally, the legislative and regulatory framework is being established progressively but far too slowly.
Regarding electricity prices, a major component of hydrogen production costs by electrolysis, the ongoing discussions in Brussels on the Market Design for electricity are undoubtedly the first step to provide the essential visibility needed for hydrogen production. In this regard, the agreement reached within the Council on October 17 represents a remarkable step forward and should enable Member States to define the modalities for supplying electricity to electrolysis hydrogen producers while adhering to competition rules.
Furthermore, we must also welcome the progress made in recognizing decarbonized nuclear electricity at the European level for hydrogen production. In a world where electricity is becoming increasingly important and demanding significant quantities, we should avoid dogmatism and not exclude any clean energy sources, including nuclear electricity, as well as biomass resources that contribute through processes like thermolysis or pyrogasification to achieving our goals. It is unnecessary to emphasize, as highlighted in the International Energy Agency’s (IEA) latest report, “World Energy Outlook,” that all clean hydrogen production methods need to be accelerated. In France, the two acceleration laws related to nuclear and renewable energies should contribute to this effort, particularly by reducing administrative authorization and permitting delays.
Additionally, the growth of renewable energies necessitates increased flexibility in managing the electrical system. Given the role they will play in the production system (10 to 12 gigawatts by 2035), considering electrolyzers as flexible consumers will contribute to providing the necessary grid flexibility. However, to ensure continuity and security of supply for consumers, alternative sources of hydrogen must be available in case of electrolyzer shutdown. A joint study, published this summer, by the two French electricity and gas network operators, RTE and GRTgaz, demonstrates the benefits of seeking synergies between the two networks and swiftly developing a network of pipelines to connect production sites, large hydrogen storage facilities, and consumers to ensure security of supply.
The collection of needs from various sectors conducted by France Hydrogène during the first half of this year highlighted the significant quantities of alternative fuels required to decarbonize the aviation and maritime industries.
This includes substantial amounts of ammonia, methanol, and Sustainable Aviation Fuel (SAF) to meet the requirements of the FuelEU Maritime and ReFuelEU Aviation regulations.
The quantities involved may necessitate imports. However, France Hydrogène believes that establishing a national base for producing these alternative fuels is essential, given France’s expertise, industry players, and resources. Nevertheless, to ensure fair competition in the production of these alternative fuels, it will be necessary to implement a global certification system that enforces the same rules for all. Additionally, with regard to the production of these alternative fuels, it is unfortunate that the capture of carbon dioxide beyond December 31, 2040, from industrial installations for synthetic fuel production, such as methanol or SAF, is not recognized. This is particularly regrettable considering that processes in certain industries, such as cement or lime production, inevitably emit carbon dioxide, even when using the best decarbonized fuel in their kilns. Direct Air Capture (DAC), which some advocate for to obtain large quantities of CO2 necessary for synthetic fuel production, will capture carbon dioxide from industrial chimneys…
Lastly, the implementation of hydrogen technologies should be carried out while avoiding new dependencies. Research efforts continue to reduce the need for platinum-group metals (platinum and iridium) in fuel cell and PEM electrolyzer production. The “Net Zero Industry Act” and the “Critical Raw Material Act,” currently under discussion, should provide the essential framework to maintain technological and economic sovereignty in this field. Furthermore, ongoing progress in recycling will make a significant contribution to the supply of raw materials necessary for production chains.
As a conclusion, the revision of the national hydrogen strategy gave rise, and it is to be welcomed, to a broad consultation of the different stakeholders, and in particular the industrial sectors, who were thus able to express their needs. From the consultation, it appears that the development by 2030 of an electrolysis power of 6.5 gigawatts is a “no regrets” decision. By 2035, this power will have to be increased beyond 10 gigawatts in order to meet the very significant needs identified and which will probably have to be supplemented by imports of hydrogen or derived products. This complementarity between domestic production and imports will be clarified in the revised national strategy which is expected within a few months.
In order to ensure the credibility of the approach, it is important, beyond economic or sovereignty considerations, to take temporalities into account.
The deployment of technologies, whether at the level of electricity production (renewable or nuclear energy) or at the level of energy transport and hydrogen distribution infrastructures, requires time that one must obviously try to reduce as much as possible in this necessary acceleration phase to fight against climate change.
Finally, we must continue to reconcile decarbonization and reindustrialization4 and ensure that the fight against climate change, perceived as a constraint, becomes an opportunity for French industry to redeploy in technologies of the future. In particular, this requires developing skills and training now so as to have the operators, technicians and engineers needed for the deployment of hydrogen technologies as quickly as possible.