Hydrogen Days in Czechia: How to overcome barriers on the path to the hydrogen revolution?

The audience at the Prague Hydrogen Days conference, made up of more than 250 participants from 19 countries, had the opportunity to discuss the state of the market, regulations and legislation affecting the development of the low-emission and zero-emission hydrogen market. Topics such as the development of the hydrogen value chain, financial support for projects, and rules for producing zero-emission and low-emission hydrogen were prominent. The importance of these topics is also reflected in the latest issue of The Hydrogen Europe Quarterly, which looks, among other things, at how to help advance hydrogen projects.

Despite progress on regulation and a large pipeline of planned projects, Europe’s market for renewable and low-carbon hydrogen sources is still struggling to bring projects to the stage of a final investment decision.

The Hydrogen Europe Quarterly reports that only 4 % of global hydrogen projects have reached a final investment decision, with most of them located in China.

The situation may be partly explained by some of the topics that featured prominently at the Prague Hydrogen Days conference – such as the lack of offtake agreements for the hydrogen produced. This may be linked to its price, which is affected by the requirements for producing renewable and low-emission hydrogen set out by the European Commission.

Last year’s conference focused mainly on regulation. This year’s subtitle was “Hydrogen – from policy to business”, and more than 40 speakers shared their views. They came from commercial, research and educational institutions, as well as from among investors, company representatives, public institutions and local authorities, all actively involved in developing various areas that hydrogen affects, or will affect.

“Success is only possible if all key stakeholders in the hydrogen community work together to address these challenges,” said Karel Bouzek, chair of the conference’s scientific committee.

A slower pace is typical of an emerging market. This year, however, development looks set to accelerate in terms of the number of projects that receive a final investment decision (FID).

In the first two months of the year, four more projects with a combined capacity of 35 MW reached FID. Three are based on water electrolysis, while the fourth is Repsol’s Tarragona Ecoplanta project, with a budget of 800 million euros, which will produce methanol from renewable sources. Several other projects have been commissioned.

“Nothing happens overnight. Solar energy generates more investment than oil, but it took decades. Batteries also took about 40 years to reach gigawatt scale,” Mathieu Guesné, CEO of French hydrogen producer Lhyfe, told The Hydrogen Europe Quarterly.

Financial support

Nothing happens overnight, and certainly not without funding. While the use of commercial debt should be the goal for all parties doing business in the hydrogen sector, The Hydrogen Europe Quarterly notes that early-stage support from multilateral banks and development finance institutions is absolutely essential to the sector’s success.

The ability to secure funding while managing an elevated risk profile is what ultimately reduces that risk.

One such institution is the European Investment Bank (EIB). Over the past decade, it has spent 1.3 billion euros financing renewable hydrogen projects. Through its EUR 45 billion REPowerEU+ package, the EIB is expected to provide a further EUR 150 billion by 2027 for new investments in green energy and technologies in general, including renewable hydrogen.

“We see immediate potential for renewable hydrogen to replace conventional hydrogen produced in industries such as steelmaking, chemicals and fertiliser production,” said Thomas Östros, vice-president of the European Investment Bank (EIB), explaining the bank’s interest in hydrogen.

The strong interest in support is evident from the results of the second hydrogen auction launched by the European Hydrogen Bank. The second pan-European hydrogen auction attracted about half as many bids as the previous one, yet was still oversubscribed roughly fourfold.

If all the submitted projects were built, they would add 6.3 GW of electrolyser capacity, producing more than 7.3 million tonnes of green hydrogen over 10 years. On an annual basis, that would amount to around 7 % of the EU’s 2030 green hydrogen production target.