The energy industry is rising to the challenge of a hydrogen economy. For many, it is essential for a clean energy future. Some three quarters (73%) of senior energy professionals say Paris Agreement targets will not be possible without a large-scale hydrogen economy and a similar share (74%), say there is no way to achieve a zero-carbon economy by 2050 without hydrogen.
Following the adoption of the EU Hydrogen Strategy and the EU Energy System Integration Strategy in July 2020, the European Commission has worked on various regulatory initiatives, as announced in the respective strategies, to facilitate the development of a well-functioning hydrogen market.
In order to meet the EU’s climate and energy targets for 2030, and reach the objectives of the European Green Deal, the EU deemed it vital to direct investments toward sustainable projects and activities. To achieve this, the Commission needed a common language and clear definition of “sustainable” – they in turn created a common classification system for sustainable economic activities, or an “EU Taxonomy”.
A revised State aid framework should help boost the demand and supply of hydrogen in Europe. The European Commission set out this promise in the EU’s hydrogen strategy for a climate-neutral Europe, adopted in July last year. Has the Commission delivered on its promises?
High costs and low demand have hindered the creation of an emissions-free hydrogen market. With IPCEI Hydrogen, the EU’s new gigantic push to bring together public and private hydrogen investments, the hydrogen market may finally have its much needed kick-start.
Hydrogen will play a key role in decarbonising the global economy. But how do you successfully develop your business to reach your projected target?
In the coming decades, the shipping industry will have to make a transition to sustainable fuels and energy carriers. Hydrogen has been highlighted as one of the means to achieve this transition, and in Norway several interesting projects are currently ongoing.
Marine transportation solutions and applications of hydrogen – contractual considerations for hydrogen projects and the hydrogen value chain
The hydrogen industry is undergoing rapid development, in particular due to the ever-increasing focus on reducing the carbon footprint and emissions across all businesses and industries. Hydrogen has a wide range of applications, and projects of various scales are being developed to cater for the varying local- and end-users’ needs. As a result, a variety of contractual frameworks and structures will likely emerge – both on a project-by-project basis and regarding the hydrogen value chain as a whole.
For countries not endowed with abundant renewable energy sources, Carbon Capture and Storage (CCS) may be the way (at least in the short term) to transition to a low carbon hydrogen economy. CCS projects have been referred to as “moon landings”. One may presume that, along with some of the technology, the underlying business and contracts are also something akin to rocket science. However, a closer look reveals major similarities to the gas sales business and gas sales agreements rather than something more ground breaking.
With its ample hydropower, developing wind power, and gas reserves, Norway is particularly well placed to produce both green hydrogen and blue hydrogen. Although the potential is obvious and there is a clear will to develop it further, the hydrogen industry is still in early stages. At present, relatively few supply contracts have been entered into and few clear market principles have developed. As such, the hydrogen industry faces similar questions in respect of the contractual regulation as the natural gas industry faced in its early phase.
Brazil has an increased focus on low-carbon hydrogen. Brazil’s National Hydrogen Policy, adopted in July 2021, identifies the development of a low-carbon hydrogen industry as a national priority.