Hydrogen - the next battlefield

For three months, Investigate Europe investigated investment in natural gas infrastructure throughout Europe.

With the support of European institutions, the fossil industry is investing billions in potential stranded assets, Investigate Europe discovered. The next battlefield is hydrogen, but again, industry interests turn out to be setting the priorities.

Hydrogen (H2) is the stuff of dreams: it is the lightest of the elements and burns to harmless water vapour at high temperatures. It can be stored, even for a long time - traces of H2 have been found in Zeppelin airships of the 1930s.

It could be used to boil steel and produce all kinds of chemicals without emitting greenhouse gases. It could power heavy trucks with fuel cells and even fire aircraft engines, as the Airbus group recently announced.

One question remains: where will this hydrogen come from?

Not present in nature alone, hydrogen can be produced through a process of electrolysis, the splitting of the molecules in water, with electricity from renewable energy sources like wind and solar.

This type of hydrogen is called 'green', as the process does not emit any greenhouse gas emissions to the environment.

40 times as expensive as oil

A rock star indeed.

However, as the electrolysis process is still very expensive - today, it is 40 times as expensive as oil - and requires enormous amounts of renewable electricity, the oil and gas industry is now also putting its bets on another type of hydrogen, labelled with the color 'blue'.

Blue or 'low-carbon' hydrogen is made with natural gas, however, and produces the same quantities of carbon dioxide as the fossil fuel itself. But there is a way out, proponents say: natural gas can be 'decarbonised'.

Greenhouse gas emissions resulting from the production of blue hydrogen can be stored underground, in the depleted gas fields under the North Sea for instance, a process called Carbon Capture and Storage (CCS).

Over the last decade, the commission has funded about six CCS projects - they all failed.

In a 2018 report, the European Court of Auditors therefore concluded that the "intended progress" of full-scale CCS demonstration was "not achieved in the past decade."

Industry and member states have not given up.

Today, major natural gas producer Norway is the only country already using CCS. This September, the government promised to invest €1.6bn in an enormous CO2 storage project.

Countries such as Italy and the Netherlands are beginning to set up CCS facilities.

But besides being heavily debated, CCS is extremely expensive, with estimates ranging between €100 up to €550 per tonne CO2, according to economists at Atkins Norway and Oslo Economics, and energy experts at the German Institute for Economic Research.

"We are preparing to decarbonise gas by 2050," Jan Ingwersen, director general of Entsog, the European umbrella organisation of gas network operators, told Investigate Europe.

While some European regions will, according to him, still be using natural gas until then, in other areas natural gas infrastructure will be repurposed to transport hydrogen or a mix of natural gas and hydrogen.

"We can convert some pipelines, we can build some new ones," adding that many of the current investments into new natural gas infrastructure throughout Europe are thus "transition projects", Ingwersen says.

"Technically, it is not very difficult to adjust natural gas pipelines to transport hydrogen," says Dutch Green MEP Bas Eickhout to Investigate Europe. "But the real question is: what volumes of hydrogen do we need in the future, and where will it come from?"

The commission is currently supporting investments in enormous new natural gas pipelines, such as EastMed, connecting gas fields in the Levantine Sea with Greece, and the Trans-Adriatic Pipeline (TAP), aimed at transporting natural gas from Azerbaijan via Greece to Italy.

"Do we really think Azerbaijan will provide us with hydrogen?" Eickhout asks.

Wind and sun supplies?

Instead, investments could go to green hydrogen production facilities in locations with lots of wind, like the North Sea, or sun, like southern Europe or north Africa.

Moreover, says Eickhout, we do not need hydrogen for everything.

It offers a good intermediate solution for energy-intensive industries, as well as for shipping and aviation. But cars, for instance, can better run on renewable electricity. "Don't put the hype on everything, it's a waste of time and money," he says, adding that he understands why the gas sector is plugging hydrogen everywhere. "It allows them to continue to use natural gas. Blue hydrogen is still fossil".

In Brussels, the industry position does not remain unnoticed.

Two weeks before the commission presented its Hydrogen Strategy on July 8, oil and gas companies such as ExxonMobil, Eni and Equinor, as well as umbrella organisation Entsog, sent an urgent letter to president Ursula von der Leyen: "Hydrogen from natural gas with carbon management technologies will be necessary to create the necessary scale and make hydrogen applications cost competitive," it reads. "Today, it is two to five times cheaper than renewable hydrogen' (...) We thus urge the EU to create a strong policy framework in support of all forms of clean hydrogen."

The commission got the message by extending its objectives to low-carbon hydrogen: "Our priority is to develop clean, renewable hydrogen," the Hydrogen Strategy states. "However, in the short and medium term, other forms of low-carbon hydrogen are needed."

Industry dominated

It therefore also launched the Clean Hydrogen Alliance - a platform that should spearhead Europe's leading role in hydrogen innovation and development worldwide.

Yet with NGO's and renewable energy companies almost entirely absent, the alliance is dominated by fossil energy companies.

Internal documents show that the commission asked Hydrogen Europe, a fossil-focused lobby group, to help set up the alliance's governance structure.

During the alliance's launch in July, Hydrogen Europe's secretary general and former MEP Jorgo Chatzimarkakis took the floor, stating "the key to success is the leadership of the industry."

Since then, Hydrogen Europe has been installed as the secretariat of Alliance, EUObserver discovered last month.

While industry and the commission are jointly pushing for a "low-carbon" future, Portugal is a step ahead.

In early September, the Portuguese government decided to immediately stop its exploration of fossil fuels. "I don't think that the development of natural gas reserves makes sense nowadays, gas is not necessary for the transition," says João Galamba, state secretary for energy, in an interview with Investigate Europe.

Instead, Portugal is investing massively in hydrogen production from solar power, and exports to Germany and the Netherlands are expected to start soon.

In the meantime, climate scientists warn us not to be blinded by the new rock star's bright promises. "Green hydrogen and CCS can both contribute to the solution and investments in their development are essential," says Joeri Rogelj, lecturer at Imperial College in London and lead author on carbon budgets for the sixth assessment by the Intergovernmental Panel on Climate Change, in an interview with Investigate Europe.

However, "we should not follow a climate strategy that relies blindly on those technologies becoming a success on a big scale."

In the meantime, we should focus on energy efficiency, on changing our habits, and on near-term emissions reductions for industry. "Basically just putting less and less CO2 in the atmosphere."