Legislation to scale up hydrogen production should be pragmatic and address the whole value chain simultaneously, according to panellists on a Hydrogen Economist roundtable in association with Air Liquide.

In practice this will mean not restricting hydrogen production to blue hydrogen in the short term, according to Thorsten Herdan, director-general in Germany’s energy ministry.

“If we start not going the pragmatic way and trying to be as green as possible from the very beginning, trying to be as strict as possible with the offtakes, then we will never succeed,” he says.

“What we need to do in Europe is to bring down the cost” Castelein, Port of Rotterdam

Herdan adds that taxpayers’ money should be directed towards hard-to-decarbonise sectors such as steel and other industries that will be hardest hit by the transition. Legislating that green hydrogen electrolysers can only use additional green electricity “would kill them from the very beginning”, he says.

Additionality is one of the issues currently being discussed by EU legislators as part of the revision of the Renewable Energy Directive.

Incentives to reduce cost

While establishing the infrastructure and incentives to create a demand-side pull, regulators also need to do what they can to bring down the costs of green hydrogen, according to Allard Castelein, CEO of the Port of Rotterdam.

“What we need to do in Europe is to bring down the cost from $4/kg to, say, approximately $2/kg,” he says. “We should include levies on grey hydrogen and we should import the green hydrogen from those sources that provide us with the security of supply at parity cost.”

Such sources are likely to be in regions with abundant renewable resources such as the Middle East, North Africa or Latin America.

It is still important to develop domestic green hydrogen production in addition to imports in order to gain experience and stimulate demand, according to Armin Schnettler, executive VP for new energy business at Germany's Siemens Energy.

“We are in an export country, so it is very important that we have some kind of competitive advantage. This is something you do to gain experiences and expertise via our own operations and building up in your home markets,” he says.

$2/kg – Targeted cost of green hydrogen production in Europe

This expertise will allow firms such as Siemens and Air Liquide to help accelerate the growth of the hydrogen economy around the world, according to Dominique Rouge, VP for sales and technology at Air Liquide.

“We are supporting this transition and this transformation all over the world in local markets which are facing the same dynamics and challenges as Europe,” he says. “These projects will play a role in the overall picture and we will be supporting them.”

The Hydrogen Economist roundtable, ‘Backing hydrogen’, held in association with Air Liquide, is now available on demand.

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Author: Tom Young