Renewable Hydrogen, an essential vector for Europe’s energy future

By Nicolás González Casares, MEP (S&D Group, Spain), Member of the ITRE

A year ago, the global energy system was shaken by a surge in energy prices linked to post-pandemic recovery. But since Russia’s aggression against Ukraine, this shock has turned into a significant disruption, causing severe energy insecurity and hardship for citizens due to rising energy prices. In the Union, our high dependency on external energy and on fossil fuel sources explains a large part of our vulnerability. The current situation has also highlighted the Union’s over-dependence on Russian fossil fuels.

The European Union has long been working to transform the challenge of combating climate change into an opportunity to move to a cleaner and more sustainable, secure, affordable, and socially just economy. The solutions for the current crisis are align with those for climate change: more efficiency, renewable energy sources, and less fossil fuels. The difference is that we now need to accelerate decarbonisation quickly. This requires rethinking the European energy strategy with rapid, short-term actions and reinforcement of medium- and long-term measures, as we cannot rely in the same way on so-called transition fuels.

Since the Ukrainian crisis, the Commission, with the mandate of the Council, has proposed several strong measures in diversification, interconnections, more renewables, and energy efficiency. The REPowerEU is an ambitious plan to accomplish the Herculean task of eliminating energy links with Russia by 2027.

Correspondingly, implementing the Fit for 55 package should pave the way in the medium to long term. The goals remain in line with the Paris Agreement. The European Green Deal continues to be the essential path to protecting ourselves from climate change, but it is also crucial to reduce our dependence on foreign energy and fossil fuels.

One of the main pillars of this action is accelerating renewable energy deployment. The REPowerEU proposes increasing the share of renewable energy sources to 45 percent by 2030, as well as reforming key instruments like the acceleration of the permitting processes for renewable installations. It is clear that the successful increase in the cost-competitiveness of renewable electricity production and its rapid growth represents one of the most cost-efficient measures to reduce emissions and increase energy independence. This must go hand in hand with further electrification of energy demand.

However, hard-to-decarbonise sectors in industry and part of the transport sector, like aviation and shipping, need other energy carriers to phase out fossil fuels and use renewable energy sources. In this sense, renewable gases will play an essential role, with a remarkable predominance of renewable hydrogen. In addition, hydrogen from renewable electricity can offer solutions to store energy produced from variable renewable sources, taking advantage of synergies between the electricity, gas, and end-use sectors.

Today, hydrogen represents a modest fraction of the global and EU energy mix and is primarily produced from fossil fuels (fossil gas). Therefore, we are either focusing in green hydrogen or falling into the same trap. We must be consistent with our climate goals and think about the economic sense of our plans.

In this sense, the Fit for 55 package translates the European hydrogen strategy into legislation through the gas package (promoting clean hydrogen) and the Renewable Energy Directive (RED). With REpowerEU, there is a more significant step, from 5.6 million tonnes (Mt) of renewable hydrogen in the Fit for 55 package to 20 Mt (production and import).

The deployment of clean hydrogen should focus on sectors difficult to electrify, such as the high-temperature industry, maritime, and aviation sectors, through synthetic fuels. It would be a bad strategy to focus on deploying hydrogen where there are cheaper alternatives through electrification. The Commission has emphasised promoting green hydrogen in the Renewables Energy Directive with very ambitious goals in transport and industry.

As co-rapporteur of the RED, I believe that we must ensure that only sustainable and additional renewable hydrogen is promoted in this Directive. Furthermore, some adjustments are needed in this Directive to focus renewable hydrogen better on hard-to-abate sectors.

The framework for developing green hydrogen must also be an opportunity to promote a European industry and jobs associated with the massive green hydrogen production needed.

In this regard, we are waiting for a crucial delegated act specifying the criteria of the renewable fuels of the non-biological origin (RFNBOs) for developing the projects on green hydrogen. It should be balanced and encourage additional renewable electricity without blocking investments. Additionality is necessary to make sense of the fact that the renewable hydrogen produced has an added value in the penetration and promotion of renewable energy. If we remove renewable electricity from electrical end uses to produce hydrogen, we only lose energy performance.

We are at a decisive moment where it is easy to make mistakes because we must take bold steps. We need additional energy infrastructure to swift energy flows and switch energy carriers. We must be clear that these measures avoid investments in stranded assets or that they make us trade one dependency for another. It cannot be done overnight, but it needs to be done quickly, considering the territories and populations. The way forward is decarbonisation through the sustainable and just obtaining and use of energy. With this in mind, it will be easier to pave the way for an optimal energy transition.