Hydrogen Generation in Europe: Overview of Costs and Key Benefits

The European Commission published its hydrogen strategy for a climate-neutral Europe on the 8th July 2020. This strategy brings different strands of policy action together, covering the entire value chain, as well as the industrial, market and infrastructure angles together with the research and innovation perspective and the international dimension, in order to create an enabling environment to scale up hydrogen supply and demand for a climate-neutral economy. The strategy also highlights clean hydrogen and its value chain as one of the essential areas to unlock investment to foster sustainable growth and jobs, which will be critical in the context of recovery from the COVID-19 crisis. It sets strategic objectives to install at least 6 GW of renewable hydrogen electrolysers by 2024 and at least 40 GW of renewable hydrogen electrolysers by 2030 and foresees industrial applications and mobility as the two main lead markets. This report provides the evidence base established on the latest publicly available data for identifying investment opportunities in the hydrogen value chain over the period from 2020 to 2050, and the associated benefits in terms of jobs. Considering the dynamics and significant scale-up expected over a very short period of time, multiple sources have been used to estimate the different values consistently and transparently. The report covers the full value chain, from the production of renewable electricity as the energy source for renewable hydrogen production to the investment needs in industrial applications and hydrogen trucks and buses. Although the values range significantly across the different sources, the overall trend is clear. Driving hydrogen development past the tipping point needs critical mass in investment, an enabling regulatory framework, new lead markets, sustained research and innovation into breakthrough technologies and for bringing new solutions to the market, a large-scale infrastructure network that only the EU and the single market can offer, and cooperation with our third country partners. All actors, public and private, at European national and regional level, must work together, across the entire value chain, to build a dynamic hydrogen ecosystem in Europe.