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Reuters: EU plans for clean hydrogen to replace fossil fuels

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World Cement,

Reuters has announced that the European Union will review state aid rules and launch a project to produce clean hydrogen to replace fossil fuels to help European firms maintain a competitive edge in global markets as they embark on large-scale emissions cuts.

Hoping to cut net greenhouse gas emissions to zero by 2050, the EU industrial strategy, unveiled by the executive European Commission, lays out a plan to produce clean hydrogen, following the model of an 8.3 billion euro (US$9.4 billion) battery project involving seven EU countries and 17 companies.

“Managing the green and digital transitions and avoiding external dependencies in a new geopolitical context requires radical change – and it needs to start now,” EU Industry Chief Thierry Breton said.

Whilst the technology needed to replace fossil fuels with hydrogen is expensive, doing so could help to cut emissions in hard-to-decarbonise sectors such as steel. EU alliances are hoped to follow for low-carbon industries, cloud data and raw materials.

Technologies like hydrogen production will require vast amounts of clean electricity from companies; Brussels is set to follow up with a more detailed plan to help guarantee this supply, said Reuters.

“For industry to reduce emissions they need greater energy efficiency and, crucially, access to a plentiful supply of low-carbon energy at competitive prices,” the EU’s Top Economic Commissioner, Valdis Dombrovskis, said.

The 2050 goal is only one or two investment cycles away for some firms, meaning that many should be making low-carbon investments now. Around half of Germany’s steel production capacity and nearly a third of its cement plants will require major reinvestments over the next decade.

“The challenge is that there is no clear investment case for companies in Europe to go forward with commercial-scale technologies,” Oliver Sartor, Senior Industry Associate at Agora Energiewende, said.

While European firms have been running pilot projects for hydrogen-based steelmaking and capturing carbon emissions from cement production, the costs for commercial-scale versions starts at hundreds of millions of euros.

Reuters reports that a group of eight EU countries – Bulgaria, France, Germany, Greece, Italy, Luxembourg, Romania and Spain – embraced the strategy. The Commission’s plan to support green products is a positive step but must be backed up by funding from the EU’s next long-term budget, they said in a statement.

EU Chief Executive, Ursula von der Leyen, has pitched her ‘Green Deal’ as Europe’s growth strategy, pledging to mobilise 1 trillion euros in investments over the next decade to help EU firms cut emissions while boosting jobs and gaining a first-mover advantage in new technologies.

The Commission’s Green Deal also includes a plan to impose carbon border measures on imports from other countries to help EU firms stay competitive while investing in emissions cuts.

The EU has also launched an innovation fund, a pot of carbon allowance revenues valued at around 8 – 10 billion euros, which aims to help companies bridge the gap between the EU’s carbon price and the real-world cost of cutting emissions.

Brussels will unveil an EU circular economy plan on Wednesday to guide manufacturers to create sustainable long-lasting products that are repairable and recyclable, Reuters reports.

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