International Hydrogen Policy Developments – October 2021 Update
The purpose of this Features article is to summarise key hydrogen-specific or related policy developments in several international economies since publication of the July 2021 International Update.
Policy momentum has continued in Australia and latest developments by jurisdiction can be found here. A summary of these Australian developments will be the subject of a separate article.
NEW INTERNATIONAL COUNTRY ADDITIONS
Hungary: National Hydrogen Strategy (media reports): May 2021
Media reports indicate that the government approved the National Hydrogen Strategy in May 2021, aiming for Hungarian industry to use almost 25,000 tons of hydrogen produced annually with green and other low-carbon technologies by 2030.
Slovakia: National Hydrogen Strategy (media reports): June 2021
A Visegrad Group communication indicated that the Slovak Government approved a document called the National Hydrogen Strategy in June 2021.
Paraguay: Towards the Green Hydrogen Roadmap in Paraguay: June 2021
A key focus of the Roadmap is on decarbonisation of the transport sector (the largest consumer of fossil fuels in Paraguay).
The Roadmap is divided into two documents:
- A conceptual framework, containing the guidelines to promote the development of green hydrogen for sustainable socio-economic growth in Paraguay; and
- An innovation proposal, with guidelines for a green hydrogen supply and a utilisation demonstration project in the country.
Czech Republic: National Hydrogen Strategy of the Czech Republic: July 2021
Reports indicate the National Hydrogen Strategy is divided into three phases:
- Phase 1 – focuses on the use of hydrogen under the clean mobility concept;
- Phase 2 – planned from 2026, involves operational industrial testing of the use of hydrogen
- Phase 3 – starting next decade when it is assumed that hydrogen can be transported using well-established pipelines without subsidy. It is anticipated the construction and repurposing of hydrogen pipelines will have commenced and that hydrogen will be used in many industries.
Colombia: Hydrogen Roadmap for Colombia (draft): August 2021
It is reported that the draft Roadmap targets 1GW of ‘green hydrogen’ production capacity by 2030 as well as 50,000 tonnes of ‘blue hydrogen’ capacity. A phased development is proposed:
- Phase 1 – up to 2026: clean hydrogen starts to be used in refineries, with small amounts utilised as fuel for trucks and buses.
- Phase 2 – 2027-35: clean hydrogen would be used in the production of ammonia fertilisers and in light-duty vehicles.
- Phase 3 – 2036-50: ‘green hydrogen’ is anticipated to be competitive with fossil alternatives
Morocco: National Hydrogen Development Strategy (media reports): August 2021
In August 2021, media reports noted the Ministry of Energy, Mines and the Environment had adopted a hydrogen development strategy, following the recommendations of a study that Morocco can capture up to 4 per cent of the world demand for green molecules.
Three ‘strategic axes’ have been identified to implement the national strategy:
- Technology development: the reduction of costs throughout the value chain of the green hydrogen sector and its derivatives
- Investment and supply: the establishment of a national industrial cluster dedicated to the development of hydrogen technologies as well as the development of a master plan for the corresponding infrastructures
- Markets and demand: the realisation of demand opportunities, giving rise to new markets.
The strategy includes the development of a national storage plan, designed to enhance the use of hydrogen and its derivatives as an energy source.
KEY INTERNATIONAL UPDATES
United States
As at time of writing, the Infrastructure Investment and Jobs Act was before the US House of Representatives for consideration. The main features of the Act relating to hydrogen include:
- US DOE to prepare a national strategy and roadmap to facilitate a clean hydrogen economy
- Clean hydrogen manufacturing and recycling program to support the hydrogen supply chain (US$500 million in FY22-26)
- Establishment of at least four regional clean hydrogen hubs (US$8 billion in FY22-26)
- A demonstration, commercialisation and deployment program intended to decrease the cost of clean hydrogen production from electrolysers (US$1 billion in FY22-26).
- Development of an initial standard for the carbon intensity of clean hydrogen
In October 2021, the US DOE announced funding for projects that complement H2@Scale efforts and support the Hydrogen Shot goal (see below):
- Nearly US$8 million for nine projects, or cooperative research and development agreements (CRADAs),to support the integration of hydrogen technologies in future energy systems, including energy storage and a specific focus on safety and risk mitigation.
- US$20 million in funding to demonstrate technology to produce clean hydrogen from nuclear power. The project will produce clean hydrogen from nuclear power at the Palo Verde Nuclear Generating Station in Phoenix, Arizona. Six tonnes of stored hydrogen will be used to produce approximately 200 MWh electricity during times of high demand, and may be also used to make chemicals and other fuels.
Also in October 2021, the US DOE announced its intent to issue a Funding Opportunity Announcement (FOA) entitled “Regional Clean Hydrogen Analysis”, which would solicit analysis projects to identify and characterize the value proposition of specific regional clean hydrogen deployments that could be successfully implemented over the coming years.
European Commission
On 14 July 2021, the EC adopted a proposal for a new Carbon Border Adjustment Mechanism (CBAM) which would put a carbon price on imports of a targeted selection of products. The CBAM, by equalising the price of carbon between domestic products and imports, aims to:
- Ensure that European emission reductions contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe
- Encourage industry outside the EU and its international trading partners to take steps in the same direction.
The CBAM is to be phased in gradually and would initially apply only to a selected number of goods considered at high risk of carbon leakage: iron and steel, cement, fertiliser, aluminium and electricity generation. A simplified CBAM system, where importers will have to report emissions embedded in their goods without paying a financial adjustment will apply from 2023 for selected products (with the objective of facilitating a smooth roll out and to facilitate dialogue with third countries). The ‘definitive system’ is to become fully operational in 2026.
United Kingdom
On 17 August 2021, the UK Government published the UK Hydrogen Strategy along with several supporting documents:
- Low Carbon Hydrogen Standards Consultation – seeks views on design options for a UK standard that defines ‘low carbon’ hydrogen, to underpin support for hydrogen production (consultation closes 25 October 2021).
- Net Zero Hydrogen Fund Consultation – seeks views to inform the design of the (£240 million) Net Zero Hydrogen Fund (NZHF), which aims to support at-scale deployment of low carbon hydrogen production during the 2020s (consultation closes 25 October 2021).
- Hydrogen Business Model Consultation – seeks views on the design for a low carbon hydrogen business model (consultation closes 25 October 2021).
The vision presented in the Strategy is that by 2030, the UK is a global leader on hydrogen, with 5GW of low carbon hydrogen production capacity driving decarbonisation across the economy and clear plans in place for future scale up towards Carbon Budget 6 (CB6, covering the period 2033-37) and net zero.
A detailed review of the UK Hydrogen Strategy is given in the UK webpage.
In October 2021, the UK government released both the Net Zero Strategy (and accompanying documents) and the Heat and Buildings Strategy.
The word ‘hydrogen’ appears over 500 times in the Net Zero Strategy with key points from the UK Hydrogen Strategy emphasised. The Net Zero Strategy includes establishment of an Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme to fund new hydrogen and industrial carbon capture business models, providing up to £140 million to establish the scheme. (Page 20)
The Strategy also seeks to deliver four carbon capture usage and storage (CCUS) clusters, capturing 20-30 MtCO2 across the economy, including 6 MtCO2 of industrial emissions, per year by 2030. (Page 21)
The Heat and Buildings Strategy includes a discussion on the role of hydrogen in decarbonising the sector and notes that further analysis is required to allow strategic decisions on the role of hydrogen in heating to be made by 2026. (Page 9)
Canada
In June 2021, the Canadian Government launched a call for proposals under its CAN$1.5 billion Clean Fuels Fund (applications through this call closed on 13 October 2021) . The Fund would support the building of new or expansion of existing clean fuel production facilities, including hydrogen, renewable diesel, synthetic fuels, renewable natural gas and sustainable aviation fuel. It would also support feasibility and front-end engineering and design studies. Natural Resources Canada would provide funding through conditionally repayable contribution agreements of up to 30 percent of the total eligible project costs, to a maximum of CAN$150 million per project.
Germany
In October 2021, the Federal Ministry of Economics and the Federal Ministry of Education and Research presented a funding guideline for the financial support of international hydrogen projects. The funding directive specifically supports projects for the production and further processing of green hydrogen as well as for the storage, transport and use of hydrogen in countries outside the EU through an investment grant for the plants. A total of €350 million in funding volume is available for the period up to the end of 2024. For companies in the commercial sector, funding in the form of a non-repayable grant can amount to up to €15 million per project and applicant. Projects of research and scientific institutions can each be funded with up to €5 million euros. Joint projects between companies in the commercial sector and research institutions are also eligible.
France
In October 2021, the French President unveiled the €30 billion ‘France 2030’ Investment Plan, aimed at fostering industrial champions and innovation. The President flagged a major role for nuclear-powered, hydrogen production in France’s future energy mix. Among the Plan’s objectives, it is reported that France would by 2030 build two mega-factories for the production of hydrogen.
Russia
In August 2021, the government of the Russian Federation approved its Concept for the Development of Hydrogen Energy in Russia (‘Concept’)
Reports indicate the ‘Concept’ foresees the development of hydrogen energy in Russia in three phases.
- Phase 1 – 2021-24: Establishment of at least three scientific and industrial hydrogen clusters
- Phase 2 – 2025–35: Launch of the first commercial projects (mainly with natural gas and nuclear energy inputs)
- Phase 3 – 2036–50: The large-scale use of hydrogen globally, with hydrogen potentially used on a mass scale on the domestic market, especially in transport, power, and industry.
The principal author of this article is Peter Grubnic: peter.grubnic@futurefuelscrc.com.
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