ICEF 2020
Low-carbon hydrogen:Accelerating the emergence of aEuropean hydrogen market.
François-Régis Mouton, Regional Director Europe

IOGP in Europe

57% of EU Overall Energy Demand(Oil = 33% , Gas = 24%)

Hydrogen & the EU’s Climate Objectives
Climate Neutrality by 2050

EU Hydrogen Strategy• The European Green Deal includes the first European“Climate Law” which enshrines the 2050 climate
neutrality target into law. Europe is the first continent todo so.

• The 2020 EU Hydrogen Strategy aims to increaseclean hydrogen production in Europe.
• The overall objective of the strategy is to provide aclimate solution as fast as possible (for the sectors
which cannot be electrified).

• The EU counts on renewable electrification to achieve
the lion’s share of emissions reductions.

• The Commission’s economic recovery plan ‘Next
Generation EU’ highlights hydrogen as an investment
priority to boost economic growth, create jobs andconsolidate the EU’s global leadership.

• Question remains around energy-intensive industries:
how will they do it?

• The share of hydrogen in Europe’s energy mix is
projected to grow from the current less than 2% to13-14% by 2050.

3Challenges ahead• Strong hopes for Hydrogen – but will the Strategy deliver?
• The Commission is counting mainly on electrolysis using renewable electricity. ‘Low carbon hydrogen (made fromgas reforming + CCS or methane pyrolysis) is only seen as an ‘intermediate’ solution.
• Questions around cost and scale perspective: European H2 Strategy focuses almost only on renewable H2 whichtoday is microscopic and expensive, whereas the role of low carbon H2 is secondary in the EU Strategy.

• Big uncertainty on 2X40 GW of electrolysers by 2030 (40GW in the EU and 40GW in neighbouring countries?) how
much will they be able to produce ?
• High reliance on Guarantees of Origin–H2 produced from electrolysers using grid power will be re-labeled as‘green’• Monitoring of imported H2 – will it really be clean?
➢ ‘Low-carbon H2 can accelerate the uptake of a H2 value chain in Europe, and facilitate the integration ofrenewable H2.
➢ But it remains ignored today by policymakers
4Hydrogen production costs
IEA (2020): Global hydrogen production by technology in theSustainable Development Scenario, 2019-70

IEA (2020): Hydrogen production costs by production source

IEA’s Sustainable Development Scenario sees global H2 production of 513 Mt in 2070. Over 50% comes from electrolysis, which
will require the electricity equivalent to ca. half of today’s total generation. Ca. 40% comes from fossil fuels with CCUS, resulting
in the capture of 1900 Mt CO2. The cost-competitiveness of H2 will mainly depend on the costs of gas and renewable electricity.

5➢ Hydrogen from natural gas with CCUS can already be produced cost-effectively and atscale.
➢ It should be considered an integral part of the EU’s hydrogen strategy.

CCUS – More than a concept, a reality

Between 30
and 60 MtCO2
captured
before 2030
6

https://www.oilandgaseurope.org/wp-content/uploads/2020/06/Map-of-EU-CCS-Projects.pdf

Obstacles to CCS deployment• Persistent skepticism towards CCS→ It’s considered as costly, facing public acceptance issues, and an intermediary measure which
is not a good signal for investment.
• Despite IEA and IPCC made it clear that we need to accelerate the development of CCS
infrastructure to meet climate targets, the EU is still very shy→ In comparison with the US, UK and Norway, the EU is late to the game.
• The technology works, it’s safe and reliable but political support and incentives are stillinsufficient→ Incentives are needed to reduce costs for CCS, overcome public acceptance and scale up
projects.
➢ CCS value chain needs support from all stakeholders, policy makers and political players
7‘Hydrogen for Europe’ study – partners and exploitable results
Steering Committee
Consortium

A comprehensive analysis with an ambitious scope

Funding Partners

Combining two detailed energy system models8

Contributing to the debate with data

The study develops a silo-breaking
approach to the energy transition in orderto objectively demonstrate:

Hydrogen for Europe is a
first-of-a-kind study thatcomprehensively looks atthe EU energy system,
quantifies the economicand environmental benefitsof hydrogen in the energytransition.

1 Hydrogen’s strategic role in theenergy transition and the potential it
brings in terms of economic efficiency
2 What is needed to establish lowcarbon hydrogen as a pillar? What are
the optimal pathways and actions?
3 What is required from policy-makers
and regulators? What are the currentgaps that need to be filled?

9 9Our policy recommendations• Technology neutral approach for all sources of low carbon/renewable Hydrogen sources in theHydrogen Strategy’s initiatives• Recognition of the long-term, cross-sectoral role of gas and CCS and its significant scale-up potential• Comprehensive terminology and certification system to cover all energy sources based on full lifecycle GHG emission savings• A European CCUS Forum alongside the Clean Hydrogen Alliance, bringing together industry, civilsociety and policymakers to work together on scaling up these key technologies and retain industry
and jobs in Europe.
➢ Low-carbon hydrogen can produce large volumes and create European supply hydrogen value chains➢ This will in turn facilitate and accelerate the integration of renewable power based hydrogen into theinternal energy market.
10For more information please contact:
François-Régis Mouton
Regional Director Europe
frm@iogp.org

www.oilandgaseurope.org

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