Green hydrogen is predicted to be a leading renewable energy source in the future, but production in Europe must ramp up massively to hit targets.
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00:00 Hydrogen is versatile and energy dense. If it could be made cleanly and cheaply, it could be the silver bullet fuel to clean up some of the world's dirtiest sectors. But that's a big if.
00:14 The main thing that we need in order to produce hydrogen is green electricity and water.
00:21 A good move for Europe is first like to decarbonize, but like direct electrification is not always feasible or cost efficient. So that's where you need renewable hydrogen.
00:34 Hello and welcome to Business Planet. This is where it all starts. Electricity is produced here at this solar power park in Puerto Llano in southern Spain.
00:44 That electricity is then sent to Iberdrola's nearby plant to produce green hydrogen, which in turn is used to make zero emissions fertilizer.
00:57 Clean hydrogen is seen as a big part of the puzzle of decarbonizing heavy industry in Europe.
01:03 The EU wants to see Europe produce 10 million tons of renewable hydrogen by 2030 and import a further 10 million tons as part of net zero goals.
01:18 However, renewable hydrogen production in Europe was just 20000 tons in 2022 and ramping up has its challenges.
01:27 We need to improve a little bit more the technology in order to be implemented in massive way. We need a clear regulation, a clear permitting process.
01:36 We need access to the grid. What happens to the hydrogen that gets produced here?
01:40 We supply this hydrogen to off-taker that is fertilizer. This is a fertilizer company. They use this hydrogen to produce ammonia.
01:48 And after that, with this ammonia, they produce a lot of fertilizers. Today, with the hydrogen that we can supply, they carbonize 10 percent of their ammonia production.
01:59 This is the building where the green hydrogen is actually made. Let's take a look inside.
02:06 Using an electrolyzer, green hydrogen is produced with renewable electricity to split water H2O into hydrogen and oxygen.
02:19 The European Commission's implemented a clean hydrogen regulatory framework and is investing heavily, 22 billion euros and counting.
02:28 The big question is that behind all of this is also the question of the money and the funds.
02:33 You have the innovation fund, you have the big one, which is the hydrogen banks that closed the first auction a few weeks ago.
02:38 It was 800 million euros, the first auction. So we estimated that it's around 600 megawatt of projects for renewable hydrogen that are going to be funded.
02:47 But to get to the targets and the levels we need that the EU has set forward as well, we need way more funding into this.
02:55 The so-called hard to abate sectors include transport, fertilizers and heavy industry.
03:03 Steel alone produces around 7 percent of CO2 emissions globally.
03:09 Swedish fossil free steel consortium Hybrids started producing steel using green hydrogen to remove the oxygen from the iron ore, replacing the traditional coal powered blast furnace.
03:24 I spoke to Susanne Eriksson-Rossmark of the Swedish mining company Elkeby, one of the hybrid members.
03:31 If we have fossil free energy available, hydrogen can be produced with only water and fossil free electricity.
03:41 So it can be produced without carbon dioxide emissions. And that's what we want to get rid of in the steel making process.
03:49 But there are, of course, challenges along the way.
03:53 One of the things that we are struggling with is the permitting processes.
03:58 They are quite slow. So we are ready to start building now, but we are waiting for the permits.
04:06 Right now, green hydrogen is more expensive than grey or brown hydrogen, which is generated from fossil fuels.
04:14 But industry is hopeful the gap will narrow as renewable prices continue to fall.
04:20 In the near to medium term future, we see that the prices will be approximately 20 percent higher than for brown steel.
04:28 If you translate that into a car, then it's about less than 200 euros extra per car.
04:41 At the moment, clean hydrogen suffers from a chicken and egg supply and demand issue.
04:45 The EU is hoping its focus on a clean hydrogen ecosystem will crack the problem of decarbonising heavy industry like this.
04:54 See you next time on Business Planet.
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