What’s holding up hydrogen in Europe?

Market Challenges

Europe's hydrogen market faces significant challenges, including regulatory uncertainties and competitive pressures from other regions. Gniewomir Flis highlights the potential for deindustrialization if Europe cannot muster the political will to deploy sufficient renewables for hydrogen production 1. This situation is exacerbated by the U.S. Inflation Reduction Act, which offers more relaxed rules and attractive subsidies for hydrogen production, potentially drawing investments away from Europe 2.

The global south actually gets an opportunity to industrialize, but at the price of losing many jobs and maybe even popular strife in Europe.

--- Gniewomir Flis

The interplay of these factors creates a complex landscape for European policymakers and investors, who are now hesitant to make final investment decisions 1.

   

Ammonia Advantage

Ammonia is emerging as a preferred hydrogen carrier over liquefied hydrogen and synthetic LNG due to its strategic advantages. Gniewomir Flis explains that ammonia avoids the thermal losses associated with cracking liquid organic hydrogen carriers back into hydrogen 3. Additionally, ammonia production is more energy-efficient compared to the high energy demands of liquefying hydrogen.

With liquid organic hydrogen carriers, you don't have a useful product. At the end, you have to crack it back, and that means 30% thermal losses.

--- Gniewomir Flis

Despite the cost barriers, ammonia's ability to utilize existing infrastructure makes it a commercially attractive option for hydrogen transport 3.

   

Production Strategy

The strategy for hydrogen production in Europe involves a balance between local production and imports. Gniewomir Flis notes that while Europe aims to produce hydrogen domestically to support its industries, the high cost of hydrogen transport necessitates some imports 4. Countries with access to cheaper renewable resources may have a competitive edge in producing hydrogen at lower costs, making imports of finished products more viable.

Hydrogen is very expensive to transport.

--- Gniewomir Flis

This dynamic could lead to an industrial shift out of Europe, as some regions capitalize on their natural advantages 4.