Europe takes the lead in the hydrogen race as the pipeline of global projects grows

BRUSSELS (Reuters) – Most of the world’s planned hydrogen projects and most of the related investments in this decade are expected to take place in Europe, an industry report said on Wednesday, as the continent is racing to increase low-carbon fuel tackle the climate goals.

The European Union has made hydrogen a key element in its goal of eliminating greenhouse gas emissions by 2050, with plans to install 40 GW of electrolysers this decade – equipment to produce emission-free hydrogen using water and renewable energy.

Currently, the EU has less than 0.1 GW of electrolysers and is betting on a rapid increase to decarbonize steel, heavy transport and chemicals, the latter already using hydrogen produced from fossil fuels.

Of the 228 hydrogen projects announced globally, 55% of them – 126 projects – are in Europe, said the Hydrogen Council business group in its first count of the global project pipeline, done with McKinsey consultancy.

Most are due to be launched this decade, with a focus on renewable hydrogen or hydrogen based on fossil fuel using technology to capture the resulting emissions.

If all the planned projects were carried out, the report said that global investments would exceed $ 300 billion this decade – about 1.4% of total investments in the energy sector – with Europe pulling about 45% of the total. Most of this funding has not yet been secured.

The Hydrogen Council’s executive director, Daryl Wilson, attributed Europe’s leadership to early investments in hydrogen supply chains and projects such as Germany’s hydrogen-powered trains, as well as climate change policies.

“This environment of stable political commitment allows the industry to have the confidence to act,” he said.

Hydrogen Council members – including Royal Dutch Shell Plc, BMW, Microsoft Corp and Sinopec – plan to increase hydrogen investments six times by 2025, from 2019 levels.

The report pointed to the enormous challenges ahead to increase hydrogen production, build transport and storage infrastructure and massively expand the capacity of renewable energy to produce fuel.

If that happened, renewable hydrogen could reach cost parity with fossil-based versions by 2028 in regions with abundant cheap renewable energy, such as the Middle East, according to estimates by members of the Hydrogen Council.