Green hydrogen defines EU’s energy security goals. India is its gateway to achieve them

With rising cooperation between India and European partners, the road to the EU's transition to renewables will pass through trusted connections such as New Delhi.

A green hydrogen plant | Representational image | www.airbus.com

No conversation on clean energy and climate goals today is complete without deliberations on the new buzzword — hydrogen — and its various versions with differing efficacies and environmental costs. They range from grey to blue to green to turquoise to pink — each requiring a specific infrastructure and technological innovation.

Europe, with its quest for energy security accelerated by the ongoing Ukraine war, has been a global pioneer in shaping the clean energy discourse. But the shift to clean energy sources will entail a geostrategic reset and different supply chains that can be trusted and aren’t merely cost-efficient. It also answers some of the questions about Europe’s interest in Ukraine, which is touted to become the continent’s hydrogen hub by 2050.

Furthermore, it brings attention to India as New Delhi recently came up with its own green hydrogen policy, which is aimed at making the country a net exporter of green hydrogen by 2030.

In the midst of the Ukraine war, the European Union (EU) has vouched for €3 billion from its Innovation Fund to be invested worldwide for the production of clean hydrogen. With rising cooperation between India and European partners aiming to help the former set up clean hydrogen infrastructure, the road to Europe’s transition to renewables will pass through trusted connections such as New Delhi.

The question is – How realistic are these aspirations? And what must nations be prepared for?

Why is hydrogen the big thing?

Hydrogen’s massive utility comes from the fact that unlike any other traditional fossil fuel, the combustion of green and/or blue hydrogen does not produce a lot of carbon dioxide (CO2). At the same time, it creates high quantities of energy.

There’s also a constant search for the most energy-efficient hydrogen variant in the spectrum. Currently, the bulk of the hydrogen is ‘grey’, produced by steam methane reforming (SMR) natural gas and coal gasification. But there is another way of producing hydrogen, which is ‘green’, and that is through electrolysis of water—producing electricity using clean renewable sources such as water, wind, or sunlight.

Green hydrogen is the universal favourite. Until recently, it was not cost-effective. But with the decreasing cost of renewables and increasing efficiency of electrolysers — coupled with the green pastures of government subsidy — the industrial production of green hydrogen has picked up.

Yet another player in the energy game is the ‘blue’ hydrogen. It is a totally different process of producing hydrogen from fossil fuels like natural gas or by coal gasification in a way that minimises its greenhouse emission.

If done efficiently, GHG emissions can be reduced to net zero. However, as with most emerging technologies, research on the environmental hazards of blue hydrogen is a mixed bag.

The turquoise hydrogen could be a solution for blue hydrogen’s fuel issues. It does not require the same CCUS (carbon capture, utilisation and storage) as blue hydrogen does. Producing this hydrogen variant, however, is too futuristic to make immediate economic sense.

Even more futuristic is the research around pink hydrogen, which can be generated through nuclear energy-powered electrolysis. One major European player that can pioneer pink hydrogen production is France.

EU’s evolving hydrogen pathways

For the EU, 2019 was a coming-of-age year in many ways. Right from listing China as a systemic rival to sharpening its focus on the Indo-Pacific engagement, the EU commission also presented the European Green Deal, which has established the arduous objective of making Europe carbon neutral by 2050. Its difficulty lies in achieving that goal while also maintaining the desired economic growth, which is in doldrums because of the global recession.

In 2020, this important document was followed by the publication of the EU Hydrogen Strategy, which took a more realistic view of energy consumption patterns and requirements within the region. It was designed with a “phased” approach that aims to phase down fossil fuels and simultaneously phase up hydrogen shares to 14 per cent by 2050.

The plan is largely divided into three phases from 2020 to 2050. In the first phase, stretching from 2020 to 2024, the EU is focussing on installing at least 6 gigawatts (GW) of renewable hydrogen electrolysers and producing up to 1 million tonnes of renewable hydrogen. In the second phase — from 2025 to 2030 — the EU will focus on making hydrogen an intrinsic part of the bloc’s integrated energy system, which aims to ramp up production by ten times by 2030. The bloc has even bigger plans for the third phase — to deploy green hydrogen in all large-scale sectors by 2050.

The question is: Where will all the green hydrogen come from and how environmentally sustainable is it?

While developing a hydrogen market has been the EU’s need for a few years, its latest documents have better clarity on the role of blue and green hydrogen within the bloc’s energy regulatory framework. While green hydrogen is definitely favoured, the report states that the EU will promote the use of blue hydrogen as well — at least till 2030 to compare the performance and viability of both.

This has been a welcome step in EU markets as previous ambiguity on legal frameworks on blue and green hydrogen impeded infrastructural development. Taken together, the EU’s plan of action for cumulative investments is to the tune of approximately €500 billion to develop clean hydrogen by 2050.

Challenges ahead

The road to green hydrogen is not free from problems. Electrolysis requires ample amounts of water, a clean electricity supply, and other logistics in place. The biggest challenge to green hydrogen production is the fuel costs — accounting for nearly 50 to 70 per cent of the entire production cost.

Keeping this in mind, Europe will have to shift its expanding hydrogen production outside the continent. Just like oil and gas, green hydrogen production will require trustworthy supply chains that are cost-effective and have smooth transport routes.

Big players like Germany assess more realistically that green hydrogen production in the future might be more cost-efficient outside the country. In its 2020 National Hydrogen Strategy, Berlin pledged €2 billion for hydrogen projects in Ukraine.

The Middle East North Africa (MENA) region is resource-rich when it comes to liquefied natural gas (LNG) reserves. But the countries’ infrastructure development potential for green hydrogen is low due to the lack of sufficient water supply.

India is identified as a ‘renewable-constrained’ but ‘partially high infrastructure potential’ region. So, while it cannot really champion hydrogen export as New Delhi aspires, it can play an important role in building the infrastructure required by the EU in future.

Green hydrogen production opens up more possibilities for cooperation among trusted partners. The Ukraine war has shown that dependencies are catastrophic, no matter how cost-effective. The future of hydrogen and its role in Europe’s energy security will generate an intersectional mesh of wide-ranging foreign and security policy imperatives alongside technological innovations. India, with its own policies for climate goals, can join the bandwagon.

There is little doubt that the future of the world’s energy needs lies in clean production. Those pioneering the transition now will be setting the rules of engagement and rivalries around the most abundantly found element in the universe – hydrogen.

The writer is an Associate Fellow, Europe and Eurasia Center, at the Manohar Parrikar Institute for Defence Studies and Analyses. She tweets @swasrao. Views are personal.

(Edited by Humra Laeeq)