More than 50% of the installed electrolysis equipment resides in the European Union. And more than 50% of the manufacturing capacity of these machines it is also in the hands of the European Union. This is at least what Frans Timmermans, the first vice-president of the European Commission, stated in his speech at the end of last week at the headquarters of this institution in Brussels (Belgium).
Electrolysis is the most efficient hydrogen production procedure using electrical energy known to date. Broadly speaking, what it achieves is separating the two chemical elements that make up a water molecule (hydrogen and oxygen), which is why it has established itself as a very attractive technology for storing the electricity that is produced using clean energy sources under the green form of hydrogen.
During his speech, Frans Timmermans emphasized the leadership that Europe intends to maintain in everything that refers to the hydrogen economy, but he also recognized that there is a problem that is worryingly hindering the development of this industry in the Old Continent: only 10% of the business initiatives that intend to break through in this sector find the financing they need to get ahead.
Now the ball is in the court of the European Hydrogen Bank
If we stick to Timmermans’ statements, the biggest challenge facing the hydrogen industry in Europe is not coming up with good ideas; it is the delivery to the most promising projects of the financial resources they need to get ahead. The curious thing is that the origin of this problem lies in the difficulty that agents have with the ability to face these investments when assuming risks.
The Hydrogen Bank aims to boost the hydrogen economy in Europe and guarantee the development of this market
According to Timmermans, whoever can invest in projects that seek to further develop the hydrogen industry in Europe is waiting for hydrogen producers to make it available when they need it. And meanwhile these last need resources to sustain production and deliver the hydrogen once it has been generated. It is, literally, the problem of “the whiting that bites its tail”.
However, the European Commission ensures that it has a plan to solve it. Its strategy is to minimize the risk that investors and hydrogen producers have to take by placing a significant part of the financial responsibility in the hands of the European Hydrogen Bank. This institution was created by the European Union in September 2022 with one purpose: to promote the hydrogen economy in Europe and guarantee the development of this market.
In the short term, the European Union will put 3,000 million euros in the hands of this institution, and its objective is to make the annual production of at least 10 million tons of renewable hydrogen viable. Sounds good, although we must not overlook that this market is still in a very early stage of development. There are still some industrial challenges on the table that will need to be resolved for the hydrogen economy to stop being a niche and make the leap to a large scale. Be that as it may, it is important that Europe is at the foot of the canyon and not stay off the hook.
Cover Image: Air Products
More information: European Commission
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