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March 15 (Renewables Now) - Blue hydrogen was declared dead by the Hungarian gas TSO chief at the Budapest Hydrogen Summit, an all-colours hydrogen event organised in the Hungarian capital on March 10 with the war in Ukraine as the background.
Several speakers at the gathering noted that the Summit could not be more timely, but it was Ferencz I Szabolc, chairman-CEO of FGSZ Natural Gas Transmission Ltd, who spelled out one of the implications of Russia’s invasion of Ukraine for the European energy and hydrogen sector -- gas-derived blue hydrogen died on February 24 when the military aggression started.
“From geopolitical aspect, [blue hydrogen] projects will be harder to implement,” commented Szabolc.
Nuclear energy-powered pink hydrogen, which is what Hungary is willing to explore, could be in trouble too should a nuclear catastrophe happen in Ukraine as the war progresses, noted foreign policy expert Feledy Botond, director of the European Leadership Programme, when he took the stage.
“The future of nuclear will be again changed, because Fukushima was able to change it from thousand kilometres far away and now we are talking about Ukraine,” Botond said.
As natural gas prices soar in Europe, green hydrogen may emerge as the front runner in the hydrogen colours race sooner than expected. From what could be heard at the Summit, it will not be just decarbonisation and sustainability targets that will drive up the demand for green hydrogen, but also energy security and the need for Europe to reduce its gas dependence from Russia.
Germany, already addicted to Russian gas, has started shopping for green hydrogen far and wide, making arrangements with countries such as Chile, Morocco and Namibia, unconcerned about going to places located even further than Russia to buy energy.
“Germany will remain dependent on energy products from abroad for around 80% of its demand,” Stefan Kaufmann, innovation commissioner for green hydrogen at the German Federal Ministry of Education and Research, said at the Summit.
The country will need to import large amounts of green hydrogen, Kaufmann added before calling for international cooperation and the establishment of global supply chains.
“No national strategy on its own is the guarantee of success,” said Kaufmann.
Thomas Schubert, partner at law firm Dentons’ Berlin office, agrees with Kaufmann’s position on the need to develop global green hydrogen ties and dismisses the notion that the search for cheap hydrogen abroad would mean trading one dependence for another.
The keyword in the green hydrogen era is diversification.
“The more you diversify, the more stable you get,” Schubert told Renewables Now.
“Being totally independent doesn’t quite work. You need to be interconnected, cause that is also producing stability. You just need to make sure you don’t depend entirely on someone,” he said.
Sourcing green hydrogen from more countries abroad will not just be good for Germany, but will also have a stabilising effect on African countries by allowing them to make money from exports, Schubert argued.
With the Summit being mostly focused on Central and Eastern Europe, several panelists highlighted the region’s capabilities to contribute to Europe’s hydrogen economy -- from production sites in Ukraine, the CO2 storage potential of Romania to hydrogen transport using existing or repurposed gas pipelines going from East to West.
Asked whether Germany's search outward for green hydrogen represents the country’s lack of trust in Europe’s plans, Schubert said no, adding that there is just not going to be enough of it.
At a panel discussion at the Summit, Johannes Truby, Managing Director of Economic Advisory at Deloitte, argued the opposite:
“In our database, we have more than 300 hydrogen projects announced for the next three years. If we assume that all of these projects reach FID, that would be the production of over 5 million tonnes of clean hydrogen by 2030. Today’s consumption of hydrogen in Europe is around 10 million, mostly in the refinery and chemical industry which is grey hydrogen[…]," Truby said.
"If we look at current project announcements, we have a realistic estimate that pipelined projects could deliver up to 20 million tonnes of clean hydrogen by 2030 if the good momentum is continued,” he added.