Europe and China have long been battling it out for hydrogen dominance, but now the race is on to build up green hydrogen capacity specifically. As Shell announces the launch of one of the world’s largest hydrogen electrolyzers in China, European powers will be hot on its tail. Both China and Korea have major plans for green hydrogen, but European countries aren’t far behind. Even before the pandemic encouraged several world governments to drive the transition away from fossil fuels to renewable alternatives, China and the EU were vying for hydrogen supremacy. In 2020, the EU’s ‘Green Deal’ highlighted a three-step plan to support the development of the green hydrogen industry across the region - including the implementation of green hydrogen production and consumption across several industries by 2024, the creation of interconnected ‘hydrogen valleys’ by 2030, and the creation of a large European hydrogen infrastructure.
Meanwhile, electrolyzer technology in China was quickly catching up with the developments of European companies such as Siemens and Thyssenkrupp. In addition, it became clear that China was capable of implementing industrial policies swiftly to dominate the market when opportunities emerged. It was only a matter of time until China developed its hydrogen technology, but no one knew two years ago who would come out on top.
Last week, Shell announced the inauguration of one of the largest green hydrogen electrolyzers in China, up and running in time for the Winter Olympics in February. The 20-megawatt electrolyzer, situated in Zhangjiakou, Hebei Province, China, will produce green hydrogen for fuel cell vehicles, initially for vehicles used during the games and afterward for commercial and public transport use.
Shell’s director of integrated gas, renewable, and energy solutions, Wael Sawan, stated of the development that the electrolyzer is “the largest in our portfolio to date.” In addition, “We see opportunities across the hydrogen supply chain in China, including its production, storage and shipping,” he said.
Several grey hydrogen projects – hydrogen derived from fossil fuels – are already in operation across China. But in an effort to develop its renewable energies sector as well as decarbonize its economy, China is now striving to phrase out grey hydrogen in favor of fully renewable green hydrogen.
The new electrolyzer, which took just 13 months to build, uses onshore wind power as its energy source, supporting Zhangjiakou’s transition to low-carbon energy. This shows the huge potential for China’s hydrogen industry if the government and private energy firms are willing to invest.
But it’s not the only Asian country to be developing its hydrogen industry. In Korea, industrial giant the Hyosung Group is planning to invest $835 million in green hydrogen facilities in the South Jeolla Province of the country. The aim is to develop a 10MW plant that will split water into oxygen and clean-burning hydrogen with an annual output of 200,000 metric tonnes of green hydrogen, making it the largest in Korea. Hyundai, Ineos, and the SK Group have all also expressed interest in developing Korea’s green hydrogen industry.
Europe’s ambitions are just as lofty and its investments just as large. In Spain, Repsol is currently betting on the country’s green hydrogen future, with plans to invest $4.4 billion in green hydrogen production and usage. The energy firm is leading a consortium of 33 companies and organizations with the aim of developing Spain’s green hydrogen sector. The funds will go toward the installation of 500MWs of green hydrogen capacity by 2025 and 2GW by 2030. This marks half of the Spanish government's overall target of 4GW.
And it’s not just the EU and Western Europe that have the potential to develop their hydrogen industries. In Ukraine, there is a significant opportunity for green hydrogen production thanks to the country’s large water resources and better-than-average solar and wind potential. Further, its location could also make it a strategic export hub, connecting Europe with Russia and Asia. However, it will require a substantial investment in Ukraine’s aging grid system, potentially billions, as well as convincing the country’s gas producers that it’s a worthwhile investment. All of that, of course, is reliant on its current tensions with Russia to de-escalate.
Europe is unlikely to let Asia take the reigns when it comes to green hydrogen, with many believing it would be crazy to import the energy source to Europe when it has the potential to get its operations up and running in line with demand. Rafael Mateo, CEO of Acciona Energía, explains “The advantage of renewables, and the advantage of green hydrogen, is that it’s local, using autonomous resources — so each country can secure its own low-carbon energy at stable prices for 30 years — it’s crazy to import if you have these resources.”
And now the EU is making sure that the region’s hydrogen data is reported accurately as part of its strategy for the development of the energy source. The European Commission has plans to require all EU states to deliver more detailed energy statistics from February this year, including information about each country’s hydrogen projects. Hydrogen use and types must now be reported, providing the Commission with the data required to better monitor and implement the EU's hydrogen strategy. This will enhance the region’s joint efforts to develop the green hydrogen sector, something that Asia has yet to do.
The jury’s still out when it comes to Europe and Asia’s battle over green hydrogen dominance. The EU is already establishing joint strategies, as well as monitoring and strategy implementation frameworks through data gathering across member states. In addition, several countries across the region and European energy firms are already investing heavily in the development of green hydrogen projects. However, as China’s largest electrolyzer gets up and running, it shows just how quickly the country is capable of developing its new industries. In addition, Korea is also looking to fund the widescale production of green hydrogen, showing that Asia is not a one-state region and could quickly become a world leader in green hydrogen.
By Felicity Bradstock for Oilprice.com
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