Europe maps out green hydrogen vision on path to net-zero

BRUSSELS (Reuters) - The European Commission on Wednesday mapped out its vision to promote renewable hydrogen, a sector expected to lure up to 470 billion euros (£420.97 billion) in investment as the European Union strives for net zero emissions by 2050.

European industry already uses around 8 million tonnes of hydrogen annually, but most is so-called grey hydrogen, which is made from natural gas through a process that produces planet-warming emissions.

The EU’s priority is to develop carbon-neutral or green hydrogen for use from 2030-50 in sectors, such as the steel industry, that are hard to decarbonise, or where electrification is difficult or impossible.

Climate Commissioner Frans Timmermans said the bloc needed progressively to grow “a small niche market” to one of scale.

He acknowledged the need for a transitional phase, requiring blue hydrogen, which is made from fossil fuel, but the carbon generated is captured and stored.

In a first phase from now to 2024, he said production capacity would be increased six-fold through the installation of hydrogen electrolysers with the capacity to produce up to one million tonnes of green hydrogen.

A second phase, from 2025-30, would allow production of up to 10 million tonnes.

Investments in renewable hydrogen, meanwhile, could reach between 180 billion and 470 billion euros by 2050, the Commission, the EU executive, has said.

To further bolster green hydrogen, the European Commission on Wednesday launched the European Clean Hydrogen Alliance, bringing together industry leaders, civil society, ministers and the European Investment Bank.

Industry is keen on hydrogen as a way of moving towards a net zero economy that can use existing infrastructure.

“Next to being an alternative fuel and energy carrier, hydrogen can become an important low-carbon building block for the chemical industry’s production processes,” Marco Mensink, director general of the chemical industry association Cefic, said.

Wednesday’s policy outline should be followed by firm legislative proposals next year, the Commission said.

(This story corrects spelling of Cefic director-general’s surname in paragraph 11)

Reporting by Marine Strauss @StraussMarine; editing by Barbara Lewis