Brussels, 26 June 2024
Hydrogen Valley Days marked a new milestone in efforts to further develop Europe’s green hydrogen regions, with the signing of the first memoranda of co-operation with national and regional authorities and the announcement of a facility designed to get more hydrogen projects to the financing stage.
Held in Brussels on 17 and 18 June 2024, this first edition brought together stakeholders from Industry, research, Member States and Regions, to accelerate cooperation for the development of Hydrogen Valleys across Europe.
‘Hydrogen valleys are emerging all over Europe, fostering regional progress and innovation. They are key for Europe’s future and for a green hydrogen transition,’ said Valerie Bouillon-Delporte, the Executive Director of the Clean Hydrogen Partnership.
In his keynote speech, Mark Lemaitre, Director General of DG Research and Innovation, highlighted that Hydrogen Valleys are a priority for the Commission, as steppingstones to a European and global hydrogen economy and that a more coordinated research and innovation framework bringing in national, regional and EU funding is needed.
He also announced the upcoming publication of a Staff Working Document :” Towards a roadmap for accelerating the deployment of Hydrogen Valleys across Europe: challenges and opportunities“, outlining the strategic priorities and actions that are currently ongoing or planned. Over the two days, delegates discussed the state of hydrogen valleys in Europe, ways to accelerate development of hydrogen projects, financing, and skills development.
The event was an indication of how important hydrogen technology and the valleys have become to the European Commission’s climate targets. It is likely to become an annual highlight on the hydrogen calendar.
A better policy environment
Rosalinde van der Vlies, Clean Planet Director at the Commission’s Directorate-General for Research and Innovation (DG RTD) stressed the importance of research as a means to reduce the costs of the technology, support manufacturing and ensure the EU remains a leader in the sector.
The EU’s Net Zero Industry Act, for example, supports green technologies by acting as ‘regulatory sandbox’ – exempting hydrogen producers from rules that have hampered increased hydrogen production. In addition, skills development and more private sector funding is vital. Collaboration across borders, both with member states and regions, would help accelerate deployment, she said.
Worldwide, close to 100 Hydrogen valleys are at different stages of completion, around 70 of them in the EU, according to the Mission Innovation Hydrogen Valley Platform. Starting with BIG HIT in the Orkney Islands, the Clean Hydrogen Partnership had been supporting 16 of these valleys in 15 EU countries with EUR 200 million in EU funding since 2015. Fifteen of them are ongoing and represent a total investment of over EUR 1 billion. They are expected to produce in excess of 21 000 tonnes of hydrogen per year to contribute to the EU’s RepowerEU targets.
Cooperation with managing authorities
The first day of the event concluded with the signing of three memoranda of co-operation between the Clean Hydrogen Partnership and Croatia, the Friuli-Venezia Giulia Region of Italy and Bulgaria.
Ms Van der Vlies said the aim of these agreements is to create a ‘more robust and mutually beneficial partnership framework’. A total of 10 regions were selected for co-operation agreements following a call for expressions of interest the Clean Hydrogen Partnership made last year. The remaining memorandums will be signed later in June.
After she signed the agreement, Bulgaria’s Deputy Minister of Innovation and Growth Veselina Mincheva said more structured co-operation between the Clean Hydrogen Partnership and regions would ensure better knowledge transfer, capacity building and financing.
The Hydrogen Valley Facility
Currently only a small fraction of the projects included in the Platform have reached final investment decision stage, said Mirela Atanasiu, head of Operations and Communications of the Clean Hydrogen Partnership
Ms Atanasiu said the future Hydrogen Valley Facility, would be an extension of the Clean Hydrogen Partnership’s support framework which aims to increase the maturity of hydrogen valleys projects through project development, technical, financial and legal assistance. The aim is for it to help valleys develop a plan to get through their pre-feasibility stage to final investment decision. The tender, with a budget of EUR 12.5 billion has been published by the partnership on 25 June 2024, following the event.
Markus Kaufmann of consultancy Roland Berger said the trend reflected challenges that all hydrogen projects faced: the cost of hydrogen is not decreasing fast enough, the technology needs to be improved and the policy environment made more favourable.
Skills for civil servants
A skilled workforce is needed, not only to build, operate and maintain the new equipment, but also in the banking and finance and public sectors.
Permitting had been identified as one of the major hurdles to advancing hydrogen projects. Getting the necessary paperwork currently takes between 6 to 9 months in Western Europe, and could take years in Eastern Europe, said Ms Atanasiu, with the Clean Hydrogen Partnership considering to publish a call next year for the training of public administrations.
Delegates from Greece and Norway said both countries are looking at developing information sessions they called ‘masterclasses’. These would range from informing policymakers on the basics of the hydrogen economy, to sessions on project planning and issuing permits. Another gap was training for bankers, investors and venture capitalists who are currently not knowledgeable enough to evaluate the feasibility of hydrogen projects.
The fact that permitting has become a problem is an indication that technology and engineering has progressed to the point where more projects are making permit applications. Governments could tackle this directly by training staff and digitalising their processes said Markus Kaufmann, a consultant from Roland Berger.
More private investment
It was vital to bring more private investors into hydrogen valley projects, said William Stevens, group Managing Director of Tech Tour, a European technology entrepreneurship and investment community.
This could be done through better cooperation between industry and government, more demonstration projects to convince investors, legislation to help create a more predictable business environment and easier permitting processes.
The slow pace of progress in implementing projects led Aivars Starikovs, chairman of Latvian Hydrogen Association H2LV to say: ‘There are too many MOUs on the table. They are important to initiate projects, but we need more demo projects. People are tired of PowerPoint presentations. They need to see this box on wheels and drive with it.’
Scaling up
Hydrogen valleys are defined as geographic areas that combine renewable energy for hydrogen production, storage, transport and several end users.
Hydrogen technology had made massive strides in the last decade. Electrolyser capacity has advanced from 150 kW in 2011 to tens of megawatts currently. The BalticSeaH2 project, one of the few large-scale inter-regional hydrogen valleys in Europe, will soon deploy an electrolyser with a capacity of between 20-25 MW, as part of the plans to deploy electrolyser capacity at a larger scale.
While the first projects have focused on mobility, the trend has moved to decarbonising major industries. It had become clear that successful valleys needed a viable off-take and end-use plan. Connecting valleys and ensuring shared development of pipeline networks and refuelling corridors are also becoming more important, as is ensuring social acceptance of the technology.
Closing the event, Ms Bouillon-Delporte said hydrogen valleys are more than just a test bed, but rather form the missing link between the small and giga-scale facilities. They have reduced the time needed to scale up and are key to Europe’s competitiveness in the green transition.
Currently, hydrogen is like ‘champagne’, said Florentin de Loppinot, CEO of hydrogen refuelling station constructor and operator TEAL Mobility. ‘It’s only for special occasions. I hope that in the years ahead, hydrogen will be more widespread than champagne.’
EU Hydrogen week is scheduled from 18 to 22 November and will include a dedicated session on hydrogen valleys.
The Clean Hydrogen Partnership has recently published a new report on hydrogen valleys and the Mission Innovation Hydrogen Valley Platform: Making it happen: Hydrogen Valleys progress in an evolving sector.
A summary document with details outcomes of the event sessions will be available soon on the Clean Hydrogen Partnership website.
The origin of Hydrogen Regions
Support for research and Innovation under the first FCH Joint Undertaking (2008-2013) was essential to the development of fuel cells and hydrogen-based applications. As these technologies matured, the FCH 2 JU (2014-2020) started to support the demonstration of energy and transport applications at large scale (fleets of buses, domestic heat and power systems, garbage trucks, etc). In parallel, hydrogen production technologies, and in particular the production of hydrogen through the electrolysis of water using renewable electricity, advanced significantly, with production capacities increasing in the last 10 years from several hundred kWs to multi-MW scale plants.
As hydrogen technologies matured, since 2016, the JU undertook significant efforts to reach out to all those European regions and cities having an interest in the potential use of fuel cell and hydrogen-based solutions to help them achieve their decarbonisation goals. As a result, the JU launched the FCH-Regions Initiative to support regions across Europe in assessing the business cases for fuel cell and hydrogen applications and in mapping their local capabilities so that they can be exploited in the future. This initiative attracted 89 European regions and cities from 22 European countries which were actively working to shape their green energy transitions with hydrogen and fuel cells. As part of the FCH-Regions initiative, the JU study on Fuel cells and hydrogen for green energy in European cities and regions, published in 2018, identified project implementation intentions in excess of EUR 1.8 billion over a 5-year period. Since then, the JU has been working closely with regions to realise this potential, while continuing to support R&I to improve the performance and reduce the cost of clean hydrogen technologies across the whole value chain. The period following the end of the FCH-Regions Initiative and building on the momentum it created, saw the launch in May 2019 of the European Hydrogen Valleys Partnership (EHV-S3P) under the Smart Specialisation Platform. The EHV-S3P aims at facilitating exchanges of knowledge and practices between regions, strengthening the European hydrogen value chain and promoting the concept of hydrogen valleys.
For regions and cities willing to get familiar with hydrogen technologies as well as on how they can help to decarbonise their territories, the FCH-Regions initiative provide a series of technology dossiers and preliminary business cases.
Project development assistance
Following the FCH-Regions Initiative, the JU launched in 2019, a pilot project development assistance (PDA) facility to help develop detailed project planning in regions and cities with a lower maturity level, with a special focus on central and eastern Europe. The final report covering the results of this initiative was presented in a webinar on 19 October 2021, with the participation of some of the regions involved and representatives from the European Commission and the European Investment Bank. The PDA initiative supported 11 selected regions to develop detailed work plans for the implementation of hydrogen projects. It concluded in June 2021. The report contains summaries of the project plans and work undertaken in each of the selected regions, the activities delivered as part of the observer network, and the next steps after the end of the PDA support period. The pilot PDA for hydrogen in regions set the path for further such initiatives, targeting regions that are not yet involved in the development of hydrogen projects and could make use of the encompassing advantages of hydrogen as a green energy carrier to ensure local, sustainable and integrated energy solutions.
Building on the success of the pilot PDA initiative, the Project Development Assistance (PDA) for Regions II was launched in 2022, with a clear focus on EU Cohesion Countries, European islands and Outermost Regions. In January 2023, 14 regions from a total of ten different countries were selected to receive support in the framework of this initiative. The projects proposed by the regions cover a wide range of hydrogen applications, from hydrogen buses in the cities to ferries that connect island communities as well as industrial applications such as glass manufacturing. The selected regions have received targeted support from dedicated teams of hydrogen consultants, thus allowing to further develop their project plans and advancing the deployment of fuel cell and hydrogen technology in areas that have seen limited hydrogen deployments to-date. The PDA II has not only provided support to the selected region, but it has also produced a set of recommendations. The final report of the PDA II is available here.
From Hydrogen Territories to Hydrogen Valleys
Against the above backdrop, since 2015, when the JU launched for the first time a call to support a first Hydrogen Valley (referred to at the time as a Hydrogen Territory), the hydrogen valley concept has gained traction among the hydrogen community. Projects such as BIG HIT (Call 2015), HEAVENN (Call 2019) and Green Hysland (Call 2020) have become pioneers and flagships of this concept.
Hydrogen Valleys are hydrogen ecosystems that cover a specific geography ranging from local or regional focus (e.g. industrial cluster, ports, airports, etc.) to specific national or international regions (e.g. cross border hydrogen corridors). Hydrogen Valleys showcase the versatility of hydrogen by supplying several sectors in their geography such as mobility, industry and energy end uses. They are ecosystems or clusters where various final applications share a common hydrogen supply infrastructure. Across their geographic scope, Hydrogen Valleys cover multiple steps in the hydrogen value chain, ranging from hydrogen production (and often even dedicated renewables production) to the subsequent storage of hydrogen and distribution to off-takers.
REPowerEU with Hydrogen Valleys
Building on the above activities, Hydrogen Valleys have been identified in the RePowerEU plan as a essential in order to scale up Europe’s hydrogen economy. This is the case because they bring together clean hydrogen production, storage of hydrogen and distribution to end-uses while creating regional value chains. Acknowledging the role of the Clean Hydrogen JU in initiating the concept of Hydrogen Valleys and of its initial support, the European Commission allocated to the Clean Hydrogen Partnership an additional €200 million through RePowerEU, to double the number of Hydrogen Valleys in Europe by 2025.
More information on the support of the JU to Hydrogen Valleys available in here
Synergies with Members States and Regions
With the above in mind, and in view of setting up a more structured cooperation mechanism between the JU and Managing Authorities of Member States and Regions, the JU awarded a contract with a view to identify and design a structured approach to generate and implement synergies on research and innovation activities between the Clean Hydrogen JU and managing authorities of Member States and Regions.
In 2023, after an exercise to understand the state of the art on the Hydrogen R&I policies of the Member States and third countries associated with Horizon Europe, a Call for Expression of Interest was launched to select 10 regional or national Managing Authorities (MA) to foster a structured cooperation with the JU tailored to the needs of each MA. A meeting with the selected MAs took place during the 2023 edition of the Hydrogen Week. Following this, the work to develop the Memoranda of Cooperation (MoC) started. The signing of the MoC is planned for Q2 2024.
Clean Hydrogen Mission – Hydrogen Valleys go global
In parallel to the above, the ‘Clean Hydrogen Mission’ led by European Union, Australia, Chile, the UK and the US aims to make clean hydrogen cost competitive to the end user by reducing end-to-end costs to USD $2 per kilogram by 2030. To achieve this goal, the Mission will increase research and development in hydrogen technologies h deliver at least 100 large-scale clean Hydrogen Valleys, and at least three per Mission Innovation Member. In this context, in 2021, the JU released the Hydrogen Valley Platform (H2VP) under the umbrella of Mission Innovation’s ‘Renewable and clean hydrogen’ innovation challenge. It aims primarily at project promoters, but it is also raising awareness among policymakers and is intended to inspire others willing to replicate similar projects. The platform was launched publicly in January 2021 at it included 34 Hydrogen Valleys. A first report summarising the situation at this time is available in here. A new tender was launched (December 2021) to give continuity to the Hydrogen Valley Platform and contribute to the European Commission’s role under the renewed Mission Innovation 2.0. As a result, the H2.0 Valley Platform was launched. An updated Hydrogen Valleys Update Report was produced in 2022 and is available in here.
As of June 2024, the platform comprises a total investment volume of more than EUR 152 billion covering 34 countries worldwide. It includes 90+ Hydrogen Valleys at different stages of development out of which around 60 are in Europe. Additional information available here.
The above represents an increase in the number of hydrogen valleys projects in recent years. However, those that have made it to Final Investment Decision (FID) is still limited. In particular, evidence gathered from the H2V platform (as well as through the JU Call for Proposals on Hydrogen Valleys) has highlighted that many of these hydrogen valleys would benefit from receiving dedicated project development support to help mature their projects towards FID.
Hydrogen Valleys Facility
The Clean Hydrogen Partnership has launched a call for tenders for a “Hydrogen Valleys Facility”. The facility aims at accelerating the number of hydrogen valleys in Europe by continuing to provide technical, financial and legal support through dedicated Project Development Assistance (PDA) to project promoters. These can be both public and private entities, aiming to develop hydrogen valleys projects. The objective is to help valleys develop a plan to get through their pre-feasibility stage to final investment decision.
The tender, with a budget of EUR 12.5 billion has been published by the partnership on 25 June 2024, following the first edition of the Hydrogen Valleys days. More information can be found here: https://www.clean-hydrogen.europa.eu/apply-funding/procurements_en
Source: Clean Hydrogen Joint Undertaking