Format: Study
Date: 27 January 2021

No-regret hydrogen

Charting early steps for H₂ infrastructure in Europe

#Hydrogen

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Preface
Key findings

Preface

The European Union has decided to increase its climate ambition for 2030 and to achieve climate neutrality by 2050. Creating a climate neutral economy will require the availability of large quantities of hydrogen, particularly in hard-to abate industrial sectors. Such hydrogen will increasingly be produced on the basis of renewable electricity, because only renewable-based hydrogen is fully carbon-free and its costs will continue falling.

Renewable hydrogen can be produced at a variety of sites in Europe. What is the best way to deliver hydrogen to the centres of industrial demand? To better understand the economic potential for pipeline transport, Agora Energiewende and AFRY Management Consulting have assessed the cost and infrastructure implications of a “no-regrets” supply of industrial hydrogen at existing sites with off-grid renewable hydrogen production in Europe.

The results show how industrial clusters can be supplied with renewable hydrogen, thereby contributing to the greening, securing and strengthening of Europe’s industry.

Key findings

Hard-to-abate industrial sectors represent a major area of hydrogen demand in the future due to a lack of alternative decarbonization options.

Steel, ammonia, refineries and chemical plants are widely distributed across Europe. To reduce and eventually eliminate their process emissions, 300 TWh of low-carbon hydrogen are required. This number does not factor in the production of high-temperature heat, for which direct electri-fication should be considered first.
The investment window for fossil-based hydrogen with carbon capture remains open, but in the long run renewable hydrogen will emerge as the most competitive option across Europe.

Given the current asset lifecycle and political commitments, fossil-based hydrogen with carbon capture will remain a viable investment until the 2030s, but strong policies for renewable hydro-gen will shorten the investment window for fossil hydrogen, likely closing it by the end of the 2020s.
We identify robust no-regret corridors for early hydrogen pipelines based on industrial demand.

Adding potential hydrogen demand from power, aviation and shipping sectors is likely to strengthen the case for an even more expansive network of hydrogen pipelines. However, even under the most optimistic scenarios, any future hydrogen network will be smaller than the cur-rent natural gas network. A no-regrets vision for hydrogen infrastructure needs to reduce the risk of oversizing by focusing on indispensable demand, robust green hydrogen corridors and storage.
Hard-to-abate industrial sectors represent a major area of hydrogen demand in the future due to a lack of alternative decarbonization options.

Steel, ammonia, refineries and chemical plants are widely distributed across Europe. To reduce and eventually eliminate their process emissions, 300 TWh of low-carbon hydrogen are required. This number does not factor in the production of high-temperature heat, for which direct electrification should be considered first.
The investment window for fossil-based hydrogen with carbon capture remains open, but in the long run renewable hydrogen will emerge as the most competitive option across Europe.

Given the current asset lifecycle and political commitments, fossil-based hydrogen with carbon capture will remain a viable investment until the 2030s, but strong policies for renewable hydrogen will shorten the investment window for fossil hydrogen, likely closing it by the end of the 2020s.
We identify robust no-regret corridors for early hydrogen pipelines based on industrial demand.

Adding potential hydrogen demand from power, aviation and shipping sectors is likely to strengthen the case for an even more expansive network of hydrogen pipelines. However, even under the most optimistic scenarios, any future hydrogen network will be smaller than the current natural gas network. A no-regret vision for hydrogen infrastructure needs to reduce the risk of oversizing by focusing on indispensable demand, robust green hydrogen corridors and storage.

Bibliographical data

Authors: Stefano Andreola, Christoforos Menos-Aikateriniadis, Angus Paxton, Hannes Preißler, Hannes Miehling, Markus Rehn, Richard Sarsfield-Hall, Benedikt Unger (all AFRY Management Consulting), Matthias Deutsch, Gniewomir Flis (both Agora Energiewende)
Publication number: 203/1-S-2021/EN
Version number: 1.0
Publication date: 27 January 2021
Pages: 92
Suggested Citation: Agora Energiewende and AFRY Management Consulting (2021): No-regret hydrogen: Charting early steps for H₂ infrastructure in Europe.
Project: This publication was produced within the framework of the project Charting the first steps for hydrogen infrastructure in Europe.