Unpacking Europe’s hydrogen road map

Hydrogen has received unprecedented policy support over the past year, with nations worldwide racing to publish national hydrogen decarbonization strategies. No region has been more engaged in this effort than the European Union.

The EU has provided a hydrogen strategy for its member states and many other states in the region have created similar road maps. These road maps provide a decade-long pathway to developing wide-scale utilization of low-carbon hydrogen as a means to achieving deep decarbonization in otherwise problematic sectors.

S&P Global Platts Analytics has extensively modeled hydrogen supply and demand for 10 European nations (E10) through 2050. While the analysis takes into consideration the hydrogen ambitions of these 10 countries, the analysis relies on Platts Analytics' Global Integrated Energy Model, our understanding of country infrastructure and other capabilities, and general energy policy to form a forecast of the actual potential.

From that analysis, we found that hydrogen can provide a 7.5% reduction in emissions by 2050—even with a conservative approach to adoption. This is significant because hydrogen can help to decarbonize sectors that are harder to abate.

In addition to a reduction in emissions, demand for fossil fuels will decline by 517,000 boe/d by 2050, and energy from renewables will increase by 813,000 boe/d.

However, it is important to note that natural gas demand does increase by an average of 80,000 boe/d (less than 1% of total natural gas demand in the E10) during the first decade of the forecast. This is due to the increased demand from fossil fuel-produced hydrogen with carbon capture, utilization and storage (CCUS). It will decline as hydrogen production shifts away from unabated fossil fuel, toward hydrogen produced with renewable generation.

This reliance on gas in the first decade of the forecast period also drives the relatively slow decline in E10 CO2 emissions versus the Platts Analytics Reference Case. Emissions begin to diverge substantially beginning in the 2030s, as low-carbon hydrogen supplant hydrogen sourced from unabated fossil fuels (gray hydrogen).

Further reading: Hydrogen: Beyond the hype

The sectors with the largest emissions reductions versus the Platts Reference Case are commercial transport and own use, encompassing emissions from refineries. These two sectors account for 60% of net decarbonization from the penetration of fossil-free hydrogen in Platts Analytics models.

The 10 European countries modeled have 7.0 million mt of existing hydrogen demand, largely in oil refining and the production of ammonia for fertilizer, and this hydrogen is produced largely via steam methane reforming. The replacement of this supply with hydrogen produced with lower or zero carbon intensity provides "low hanging fruit" in the drive of decarbonization.

Outside of these incumbent processes, we see commercial trucking having the most upside followed by power generation and heating in the residential/commercial sector.

At a glance: Key priorities and strategies

France

• Plans to spend Eur7 billion on a 6.5 GW electrolyzer capacity by 2030, with Eur2 billion available in 2021/22

Germany

• Strategy calls for €7 billion to be invested in domestic businesses and research with emphasis on green H2
• Targets up to 5 GW electrolysis by 2030, and another 5 GW by 2035-2040

Netherlands

• Has ambition to build 500 MW electrolyzers by 2025 and 3 GW-4 GW by 2030

Spain

• 60-point plan sets goal of 4 GW electrolysis by 2030, backed by a system of Guarantees of Origin, with green hydrogen quotas for industry
• Plan is estimated to cost Eur8.9 billion over 10 years, most of this coming from private sector

UK

• Strategy includes a 5-GW production target by 2030, supports both green and blue H2 production

Portugal

• Plan includes a target of 2-2.5 GW electrolysis by 2030 rising to 5 GW by 2050
• 10%-15% H2 in gas grid by 2030, rising to 75%-80% by 2050

Italy

• 5 GW of electrolysis and 2% share of hydrogen in final energy demand by 2030

Austria

• Green hydrogen projects to receive Eur500 million in state aid by 2030 to help decarbonize industries like steel

A full version of this report is available under Platts Future Energy Outlooks