Europe notebook: Hydrogen market, traded in euros, to be proposed

As Europe's Green Deal takes shape around hydrogen fuel, Climate Commissioner Hans Timmermans wants a market traded in euros, like oil in dollars

(Stephen Rae is the former Group Chief Editor of INM, Ireland’s largest online and print media group. He serves on the board of the World Association of News Publishers (WAN-IFRA) and was previously on the board of the World Editors Forum. He was appointed by the European Commission to its High Level Expert Group on Online Disinformation.)

DUBLIN (Callaway Climate Insights) — Hydrogen should be traded in euros the same way oil is traded in dollars, a draft of the EU’s energy strategy reveals.

The European Union is anxious to be the leader in rolling out hydrogen as the next generation fuel and is spending big to get there.

This week, seven of the most influential countries in the Union also called on the European Commission to speed up infrastructure change and research to allow the conversion to hydrogen.

In a letter to Climate Commissioner Frans Timmermans, the seven nations (Austria, Netherlands, France, Germany, Belgium, Luxembourg and non-EU member Switzerland) say hydrogen will “play a significant role to achieve carbon neutrality by 2050 in Europe.”

“In sectors like industry and transport clean hydrogen is the missing link in the energy transition. To make this happen we need to scale up and reduce the cost of clean hydrogen,” Dutch Economic Minister Eric Wiebes urged.

Timmermans is already a hydrogen convert and wants to see dual use of natural gas pipelines to carry hydrogen as an interim fix.

Separately, a draft of his hydrogen strategy — due to be published later this month — wants to see a hydrogen trading market priced in euros.

And showing an increasing interest in Africa — watchful of China’s dominant influence on the continent — the EU strategy will point across the Mediterranean to its near neighbors as producers of the carbon neutral gas.

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Two of the countries urging the European Commission to speed up hydrogen conversion have already signed a bilateral agreement. German natural gas operator Creos Deutschland and French counterpart GRTgaz have partnered to build a cross-border hydrogen transmission network by converting existing gas pipelines. The agreement will see the German industrial Saar region tie up with the Lorraine region in north east France and part of the tiny principality of Luxembourg. Around 70km of pipeline will carry 60MW of pure hydrogen.

Observers say the choice of Saar and Lorraine is a strategic attempt to build a “hydrogen valley” capable of generating and consuming its own fuel — and also clean up a polluted industrial corner of Europe.

In Germany itself, the government has adopted a national hydrogen strategy costing €7 billion in R&D, and which will see production ramp up to 5GW in 2030 and 10GW by 2040.

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Britain is researching the use of hydrogen trains and wants to remove diesel-powered trains by 2040.

Porterbrook, an industry partner on the project, is investing in flexible trains that can run on hybrid power and can be retrofitted when components like hydrogen fuel tanks.

CEO Mary Grant said “we have proven this technology works, now is the opportunity for the government to truly energise the Green Recovery by creating a real market for a fleet of hydrogen-powered passenger trains.”

Just 40% of the UK rail network is electrified, while the EU average is 54%, with many countries completely electrified.

A passenger hydrogen train service began in Germany in September 2018, followed by trials in Holland and France.

Back in Britain, the University of Birmingham is receiving a £400,000 grant to complete detailed production designs and testing the hydrogen train concept. “To achieve the decarbonization of the railway, we need to develop hydrogen technology, alongside electrification and batteries, as one of the means to get diesel trains off the network,” said the university’s railway research director, Alex Burrows.

HydroFLEX, a working demonstrator, (pictured above) was rolled out at an industry event in June 2019 and is the first hydrogen train to operate in Britain, using both fuel cells and electric batteries.

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MEPs on Thursday adopted the Taxonomy Regulation — a key piece of legislation in the Green Deal that boosts private sector investment in green and sustainable projects.

Welcoming the move, the European Commission said the regulation will help create the world's first-ever “green list” — a classification system for sustainable economic activities.

It also creates a common language that investors can use everywhere when investing in projects and economic activities that have a substantial positive impact on the climate and the environment. “By enabling investors to re-orient investments towards more sustainable technologies and businesses, this piece of legislation will be instrumental for the EU to become climate neutral by 2050,” the Commission said in a statement.

At the same time, the Commission launched Thursday a call for applications for members of the Platform on Sustainable Finance, an advisory body composed of experts from the private and public sector. The board will assist the Commission in the preparation of technical screening criteria (the so-called “delegated acts”), which will develop the taxonomy further. They will also advise the Commission on the further development of the EU Taxonomy to cover other sustainability objectives and provide advice on sustainable finance more broadly.

Valdis Dombrovskis, executive vice-president responsible for Financial Stability, Financial Services and Capital Markets Union, said: “The adoption of the Taxonomy Regulation today marks a milestone in our green agenda. It creates the world's first ever classification system of environmentally sustainable economic activities, which will give a real boost to sustainable investments. It also formally establishes the Platform on Sustainable Finance. This platform will play a crucial role in the development of the EU Taxonomy and our sustainable finance strategy over the coming years.”

Applications for the Platform on Sustainable Finance will be open for a period of four weeks. For more information on the Platform on Sustainable Finance and how to apply, see the Register of Commission expert groups – Calls for applications.

Above, HyrdoFLEX, the UK’s first hydrogen train, developed by Porterbrook and the University of Birmingham.