EU's green hydrogen goals not realistic, say auditors

The European Union's (EU) goals to produce and import green hydrogen fuel are unrealistic and unlikely to be met despite billions of euros in funding, the European Court of Auditors said yesterday.

The European Commission (EC) has set out targets to produce up to 10 million tonnes of renewable hydrogen by 2030 and import a further 10 million tonnes to fuel sectors such as transport and manufacturing.

Renewable hydrogen is expected to be a key fuel in the EU’s green transition and sustainability drive.

The bloc estimates that it could make up 20% of its energy mix by 2050.

Key partner

The EU is a key partner in Namibia’s green hydrogen ambitions.

In November 2022, late president Hage Geingob and EC president President Ursula von der Leyen signed the Memorandum of Understanding on Renewable Hydrogen (GH2) and Sustainable Raw Materials Value Chains.

The partnership became more concrete with the launch of the operational roadmap last October.

The roadmap outlines the necessary steps from 2023 until 2025 to advance green industrialisation and decarbonisation using renewable hydrogen and raw materials.

The EU has promised to mobilise €1 billion - about N$20 billion - of public and private investment for renewable hydrogen and raw materials infrastructure in Namibia.

‘Bumpy start’

According to the European Court of Auditors (ECA), the EU’s 2030 targets for the production and import of renewable hydrogen are “overly ambitious”.

“These targets were not based on a robust analysis, but were driven by political will,” the ECA said.

Achieving these targets has had “a bumpy start”, the body added.

“Firstly, member states’ differing ambitions were not always aligned with the targets. Secondly, in coordinating with the member states and industry, the Commission failed to ensure that all parties were pulling in the same direction,” the ECA said.

Targets

While not binding, the goals are part of the bloc's plans to end its reliance on Russian energy imports.

Another target set out by Brussels, to install at least 40 gigawatts of renewable hydrogen electrolysers by 2030, was an idea suggested in documents by a hydrogen lobby group, the auditors found.

Despite EU funding of 18.8 billion euros being made available for green hydrogen projects, projects that would add less than 5GW of production capacity by 2030 have reached an advanced stage, although projects totalling around 50GW of capacity are also at an earlier assessment stage.

Green hydrogen is deemed crucial to meet the EU's climate change commitments.

It is produced by using renewable energy to split water - a process that produces no CO2 emissions - and the EU is banking on it to decarbonise industrial processes such as steel and fertiliser manufacturing.

‘Far from finished’

"The EU's industrial policy on renewable hydrogen needs a reality check," said auditor Stef Blok, who led the report.

The ECA said the European Commission should devise a more targeted approach to allocating scarce EU funding, and update its policies to incentivise hydrogen projects.

A Commission spokesperson said it took note of the report, and acknowledged the hydrogen market was taking shape "gradually".

"Our work is far from finished. We now have to accelerate the deployment and uptake of renewable and low-carbon hydrogen in Europe," the spokesperson said. - Own report and Reuters