Hydrogen in Europe, part 1: What is hydrogen and why is it relevant?

What is hydrogen?

Under standard room temperature and pressure hydrogen (H2) is a gas. It’s colorless, odorless, tasteless, non-toxic and it is much lighter than air. Due to its low density, it requires large storage space. Therefore, hydrogen is often stored in tanks under pressure, typically at 350 or 700 bar, to reduce storage volume. Hydrogen can also be liquefied, which increases its density by a factor 800. However, to liquefy hydrogen under normal pressure, it must be cooled to a temperature of minus 253 degrees Celsius (C).

Hydrogen is not a primary energy source such as oil or natural gas, nor is it a renewable energy source like wind, solar, or hydropower. It Is an energy carrier that needs a primary energy source to be transformed, much as natural gas or coal are used to generate heat or electricity.

With few exceptions, all the hydrogen currently produced worldwide is gray hydrogen, which is produced from fossil fuels, predominantly natural gas. In this process, natural gas (CH4) reacts with steam (H₂O), which finally results in hydrogen (H2) and carbon dioxide (CO2).

During the production of gray hydrogen, every 1kg of hydrogen produces 9kg of CO2. Gray hydrogen production in Europe accounts for 70 to 100 million metric tons (MT) of CO2 each year. To put things in perspective, Austria emitted a total of 70MT CO2, and Belgium 108MT in 2022. Given this significant carbon footprint, it is clear that hydrogen producers must decarbonize their production processes.

There are some safety concerns with hydrogen, but it is no more dangerous than other flammable fuels such as gasoline or natural gas. Hydrogen has a wide flammability range of 4% to 75%, meaning that it is flammable at concentrations between 4% and 75% in air – a wider range compared to other fuels. Natural gas, for example, has a flammability range of 5% to 15%. However, at concentrations below 10%, it requires a significant amount of energy to ignite hydrogen.

In terms of explosion risk, hydrogen explodes at concentrations between 18.3% and 59.0% in air. Although this is a wide range, it should be noted that gasoline vapor explodes at much lower concentrations, between 1.1% and 3.3%, and natural gas between 5.7% and 14%.

Another risk is leakage, due to the small size of the molecule and because it turns into a gas when the temperature rises above minus 253C. Additionally, it can cause metals to become brittle, posing challenges for transportation and storage. On the other hand, hydrogen is much lighter than air, any leakage in open spaces will quickly disperse.

Why is hydrogen relevant?

Hydrogen and electrification (based on renewable electricity) are considered two of the corner stones in the in the energy transition. Hydrogen, or its derivatives, could serve as substitutes for certain fossil fuels that are currently used in vehicles, airplanes, vessels, gas turbines, and high heat processes. Hydrogen could also replace fossil fuels employed as feedstock in chemical processes. If the hydrogen industry succeeds in producing hydrogen with low or zero emissions on a large scale and at a competitive price, society could reduce the use of fossil fuels and decrease CO2 emissions.

In addition to gray hydrogen, there are various other “colors” of hydrogen. We will explain some of the better-known colors.

Blue or low-carbon hydrogen

One way to reduce CO2 emissions in hydrogen production using fossil fuels is to capture the CO2 emissions during the production process and store them underground. This type of hydrogen is referred to as blue or low-carbon hydrogen. The amount of carbon remaining in low-carbon hydrogen depends on the capture rate. Current carbon capture and storage (CCS) projects achieve an overall CO2 capture rate of 50% to 60%, and several new projects under development in the US aim for a capture rate of 95% or higher at the plant.

Under EU regulations, low-carbon hydrogen may only qualify as such if it achieves a reduction of at least 70% in CO2 emissions compared to gray hydrogen on a lifecycle basis. This means that not only the emissions that are released during the hydrogen production process are taken into consideration, but also the upstream emissions (from natural gas production) and downstream emissions (from transport and distribution). The exact definition and calculation methodology for compliance are yet to be determined and will be provided in a delegated act.

Green or renewable hydrogen

Hydrogen can also be produced through electrolysis. This is when electricity is used to split water (H₂O) into hydrogen (H2) and oxygen (O2). If the electricity used in this process is generated with renewable sources, the production process is free of emissions. This type of hydrogen is known as green or renewable hydrogen.

The production of green hydrogen is relatively inefficient. More than 30% of the electricity used to produce green hydrogen is “lost” during the production process. About 30% of energy is converted into heat in the electrolysis process itself. Another 5% to 10% of energy is used by the balance of plant, which consists of all subsystems that support the electrolyzer, such as compressors, electricity management systems, cooling systems, water demineralization systems. Effectively, only 60% to 65% of the renewable electricity is converted to green hydrogen.

Other colors of hydrogen and clean hydrogen

Sometimes, references are made to other colors of hydrogen than gray, blue or green. These colors typically denote the production method or energy source of the electricity used. For example, pink hydrogen is often associated with hydrogen produced through electrolysis, using electricity from nuclear power. Turquoise hydrogen usually refers to hydrogen produced through methane pyrolysis. This process uses heat to split methane into hydrogen and solid carbon, which can be sold as a feedstock for other products. This is a CO2 emission-free process.

White hydrogen, which is a naturally occurring hydrogen, has recently caught the headlines. Natural hydrogen reserves have been discovered underground that are formed by natural processes. However, more research needs to be done on this relatively unknown phenomenon. The emission intensity depends on the degree of methane contamination of the gas.

The bottom line with hydrogen colors is that the meaning of each color is not always clear, so a brief description is necessary. In publications the term “clean hydrogen” is often used. Clean hydrogen refers to hydrogen that has zero or low CO2 emissions. It usually includes hydrogen produced with electricity from nuclear power.

Many products we use in our daily lives are produced with hydrogen. Most of us are unaware of this because hydrogen serves as a feedstock for chemicals and other intermediary products. Products such as plastics, fuels, cleaning products, food and beverages, textiles, paints, and cement all need hydrogen.

In terms of industry, the refinery and the ammonia industries are currently the two largest producers and consumers of hydrogen in Europe. They need it as a feedstock in their chemical processes and currently have no alternatives. Gray hydrogen is typically produced on-site at the refinery or fertilizer plant and consumed in the same plant as part of a single integrated production process. Only 13% of gray hydrogen production is available for trade.

The refinery industry requires hydrogen to remove sulfur from crude oil during the refining process to turn it into usable fuel. In the ammonia industry, hydrogen serves as a primary feedstock. During the Haber-Bosch process, hydrogen (H2) reacts with nitrogen (N2), which results in ammonia (NH3). About 70% to 80% of the total global ammonia production is used as a feedstock for fertilizers, while the remaining 20% to 30% is employed as a feedstock in other products and processes, like the production of methanol (CH₃OH), plastics, explosives, textiles, various chemicals, and in metallurgy.

In Europe, Germany, the Netherlands, and Poland rank as the top 3 hydrogen producers and consumers. Together with Spain, these countries account for half of total hydrogen consumption in Europe.

There are several EU directives that force the hydrogen industry to reduce its CO2 emissions. Given its large carbon footprint, this regulation is specifically relevant for industries that use and produce hydrogen, such as the fertilizer industry. The two most significant changes in EU regulation for the hydrogen industry that have recently come into force are:

From the two regulatory changes mentioned, it is evident that the hydrogen using industry in Europe must decarbonize its production process sooner rather than later. While there is more regulation that affects hydrogen, elaborating on that goes beyond the scope of this report. However, we will be discussing the RFNBO and RED III in more detail in a separate report, as well as the new applications of hydrogen in the future.

Renewable fuels of non-biological origin (RFNBO) is a definition used in EU regulation. It refers to hydrogen produced with renewable electricity (excluding biomass sources), which must meet very specific conditions detailed in two delegated acts of the RED III. The first delegated act provides the methodology for the production of RFNBOs, and the second delegated act outlines the methodology for assessing greenhouse gas (GHG) emissions savings from RFNBOs. Needless to say, this approach is far from pragmatic or simple, and its adoption and implementation remain the focal point of heated debate.

The European Commission introduced the term RFNBO to avoid confusion about what qualifies as renewable hydrogen. For example, an electrolyzer with a grid connection uses electricity from the grid, the electricity mix of which varies throughout the day. During sunny and windy moments, the electricity is 100% renewable, while on other moments, the share of renewable electricity drops. This begs the question: which hydrogen produced by this electrolyzer is renewable, and which isn’t? The delegated acts attempt to answer that question.

This is relevant because only renewable hydrogen that meets the RFNBO criteria counts toward the binding EU targets for member states and sectors. The RFNBO definition is also applicable to renewable hydrogen imported into the EU from outside its borders. As a result, EU member states will have a strong preference for imports that meet the RFNBO criteria. For the sake of clarity, advanced biofuels, fuels synthesized from biomass feedstock or waste, don’t qualify as RFNBO, nor do recycled cooking oil or animal fats.

Further details on RFNBO and regulations will be provided in ‘Hydrogen in Europe Part II’.