This month, the European Commission announced that it will roll out carbon contracts for difference (CCfD) for green hydrogen “to support a full switch of the existing hydrogen production in industrial processes from natural gas to renewables and the transition to hydrogen-based production processes in new industrial sectors such as steel-making”.
As highlighted in our previous article “Earth Day also means faster industrial sites modernization“, this will lead to a major acceleration of revamping in the chemical, refining, steelmaking, as well as gas transportation & storage infrastructure. And possibly nuclear.
The new REPowerEU plan sets a target for 10Mt of green hydrogen to be produced in the EU by 2030, with a further 10Mt imported. These 20 Mt would require approximately 600GW of new wind and solar power capacities, and 200GW of electrolysers
As a reminder, the current global production of hydrogen is about 100Mt/year, most of which is used to produce ammonia, a key precursor for fertilizers. Another important fraction is used for desulphurization in refining processes.
Although the European plan does not set a precise ramp-up calendar by 2030, it is nevertheless ambitious, and the target figures fall in the right orders of magnitude.
This plan focuses primarily on hard-to-abate sectors, since more than two-thirds of the planned hydrogen will be used for industrial applications:
- Chemical sector
- Industrial heat
The EC also highlights the need for important work on technical hydrogen standards and expedition of authorization procedures for hydrogen infrastructure, to ensure that the necessary projects will be executed as soon as possible.
Several projects have already started, whether on a pilot scale like the transformations of Yara’s ammonia plants in Norway and Australia, or complete industrial upgrades like ArcelorMittal’s Sestao plant in Spain.
The refining sector, which has already embarked on significant biofuel production upgrades over the past decade, is also accelerating its investments in green hydrogen globally.
REPowerEU also highlights that power generation facilities will only be allowed to produce green hydrogen under the “additionality” principle. This will avoid the risk that investments in renewable energy are diverted from the energy transition.
For now, the door seems to remain open for nuclear, as the plan states: “other forms of fossil-free hydrogen, notably nuclear-based, also play a role in substituting natural gas”. Yet, it is still unclear whether nuclear power will be included in the EU’s Green Taxonomy.
At Samp we want to be the catalyst of this sustainable transformation. We help industrial facilities successfully go through an accelerated pace of modernization and meet the fundamental challenges of safety and efficiency. Our current customers are getting ready for this major shift.
Our intelligent as-built portal helps to rapidly regain control of the as-built status of industrial facilities. It slashes the time needed to prepare for plant turnarounds and ensures a smooth handover of up-to-date data to operations teams.
We are thrilled to help a growing number of industries ride the wave of decarbonization and circularity.
Do you want to continue the conversation and take action? Get in touch with Samp!