The partnership promoting green hydrogen

12 May 2022

Simplifhy joins the Renewable Hydrogen Coalition.

It is a non-profit association that promotes the key role of green hydrogen from renewable sources in achieving the European Union’s decarbonisation goals.

The Renewable Hydrogen Coalition brings together start-ups, investors, entrepreneurs, industries, and innovative companies that aim to make Europe a central player in the realization of green hydrogen solutions.

Green hydrogen for decarbonisation

With a view to decarbonisation of energy, green hydrogen is an essential choice for the energy transition.

Indeed, green hydrogen is produced exclusively with energy from renewable sources and is free of both carbon and pollutant emissions.

In particular, this type of hydrogen is produced by electrolysis: the process of breaking down water molecules using an electrolyser to separate oxygen from hydrogen.

However, the costs of this technology are still very high.

For this reason, the European Union has chosen to provide subsidies and incentives to companies that will produce this type of hydrogen, while excludinghydrogen from fossil sourcesor, in general, produced with non-renewable energy sources (identified by different colours depending on the production technology and energy source: grey/blue/etc.).

Blue hydrogen for an energy transition phase?

The reason why multinational oil & gas companies and technical gas producers are pushing to produce blue hydrogen – generated from fossil sources, but without the release of CO2 into the atmosphere that would be captured instead – is related to the use of existing assets and expertise.
As well as the current high cost of technologies related to the electrolysisprocess, which are still undergoing technological development.

Specifically, companies that already possess petrochemical assets with which they produce hydrogen from natural gas would like to be able to continue using these same plants but making them more sustainable than in the past not releasing to the atmosphere the CO2 generated in hydrogen production process.

There are two ways to achieve this:

  1. storing the CO2 sequestered in hydrogen production in depleted underwater reservoirs
  2. re-use CO2, e.g., to produce mineral water and other carbonated drinks, or in the cold chain

According to this thesis, with blue hydrogen, a transition phase could be initiated to start a hydrogen utilisation chain and thus create a strong demand for hydrogen.

Only at a later stage, when electrolysis technologies will become more cost-effective, will it be possible to switch to an exclusive production of green hydrogen.

However, the European Community has chosen a different path and decided to incentivize only the technology of the future, i.e., green hydrogen, in an attempt to accelerate the path to decarbonisation.

Also because, with the increase of natural gas price in recent months, aggravated by the current geo-political context, the total cost of producing blue hydrogen has become higher than the one of green hydrogen.

Bureaucratic problems in energy transition incentives

Currently, there are still bureaucratic problemsthat hinder access to incentives for companies wishing to produce green hydrogen:

  1. incentives are not targeted at plants that have already benefited from bonuses in the past
  2. there are no structured and well-defined rules or adequate incentives by the Italian government

Energy incentives only for additional plants

At present, the European Community has chosen to finance green hydrogen projects only on condition that the renewable sources from which it is produced have not already benefited from incentives in the past.

In practice, this means that they must beadditional plants and not existing ones, as most of the current renewable plants have previously benefited from other bonuses and subsidies.

This currently makes it inefficient for companies to invest, because it means that those who already have solar plants cannot use them to produce hydrogen.
Therefore, they will have to find other areas to build new plants, which complicates logistics and lengthens time.

No definite rules for the approval of large hydrogen plants

Moreover, there are currently no structured and well-defined rules for the approval processes of very large solar plants and, above all, large hydrogen plants.

For example, Italian laws currently provide for simplifications in the approval process for green hydrogen plants up to 10 megawatts.

Not for large solar fields, nor for all ancillary systems.

In general, the Italian government has not yet definedadequate incentives modalities.

For all these reasons, the definition of green hydrogen directives at European level is not sufficient to achieve effective production in the various countries, since:

  • there are framework conditions and national regulations that do not currently facilitate this type of activity
  • there is still a strong push from current hydrogen producers to be able to use blue hydrogen at an intermediate stage, i.e., at least for the next 10-15 years.

Simplifhy view on the use of green hydrogen

Our position as Simplifhy is that it is necessary to build new plants from renewable sources, provided, however, that the incentivesare actually affordable and manageable.

That is why as Simplifhy we have decided to support the Renewable Hydrogen Coalition, to pressure European institutions to adopt more incentives and clear rules that push in the direction of renewable energy and green hydrogen.

We have no prejudicial or ideological position towards the fact that hydrogen must necessarily be sustainable in the short term, but that will inevitably be the end point.

To learn more, visit the official website on the Renewable Hydrogen Coalition.

Contact us for more information on our green hydrogen solutions.

In Simplifhy we offer strategies and systems for the decarbonisation of industry, through deployment of Hydrogen-based technologies as an alternative fuel.

Our plants are tailoredaccording to the necessities of each specific project.

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