What Portugal believes to be the solution towards achieving zero net emissions by the end of 2050
What is green hydrogen and why does it matter?
Imagine a clean alternative to fossil fuels. One that wouldn’t depend on hours of daylight nor on weather conditions, like solar or wind energy. That would save 830 million tons of carbon dioxide from being released into the atmosphere annually (Iberdrola). This is not a dream, is green hydrogen, and possibly a key factor towards achieving zero net emissions by 2050, something which Europe has committed to in its Green Deal.
The production of this gas, a universal, light and highly unstable fuel, is done through a chemical process called electrolysis. This consists of an electrical current which will electrolyze water (H2O), separating the hydrogen atom (H) from its molecular twin oxygen (O2). Thus, all you need to produce large amounts of hydrogen is water, a big electrolyzer and plentiful electricity supplies. If the latter is obtained through renewable sources, like solar or wind energy, then you’re able to produce energy without any CO2 emissions besides those embodied in the production infrastructures, and the hydrogen is effectively green.
In Green Tech Media (GTM) website, we can read:
For a colorless gas, hydrogen gets described in very colorful terms.
In fact, the nomenclature of hydrogen is color-coded accordingly to its production process. The hydrogen that the world uses today, which is responsible for 2% of all CO2 emissions, is made from fossil fuels, either from coal (black hydrogen) or natural gas (grey hydrogen) and so its carbon intensive. Blue hydrogen applies when most CO2 emissions in the production process of grey hydrogen (at least 80%-90%) is captured and stored, not being released into the atmosphere. Although better than the black and grey, this hydrogen is far from carbon neutral.
European commission has set clean hydrogen as a priority area for the industry in the Green Deal- this is a loose term which can include both blue and green hydrogen.
Uses of Green Hydrogen
The International Energy Agency (IEA) predicted in 2019 that global energy demand will increase between 25-30% by 2040. Providing for those needs along with the decarbonization of the world economy may highly depend on green hydrogen, which only emits water vapor.
Theoretically, many uses can be given to green hydrogen. It can be added to natural gas and then burned in thermal power or urban heating plants. You also can use it as a precursor for other energy carriers, from ammonia to synthetic hydrocarbons. Hydrogen has been used to fuel cars, ships, airships, and spaceships since the beginning of XIX century. However, although Toyota Mirai, an hydrogen driven model, fueled the hopes that hydrogen vehicles might compete with electric cars, the prospect of hydrogen being a serious contender has faded, at least in the passenger vehicle segment. But analysts still expect hydrogen to play a role in decarbonizing some vehicle segments, with forklifts and heavy-duty trucks the strongest bets. Airbus already announced it is developing its first commercial plane moved with clean hydrogen, which hopes to be operational by 2035 (DN, 2020). Nevertheless, green hydrogen can simply replace the industrial grey hydrogen that is made every year, and in the US alone amounts to around 10M metric tons (GTM, 2020).
Portugal in the race for energetic transition
The economic and technological disruption created by the coronavirus pandemic has led multiple scientists and policymakers to believe that now is the time for green hydrogen to be fully brought into the energy mix of the future. They advocate that the trillions of dollars set aside to build-back-approaches should also be invested in the energetic transition to cleaner processes. Betting on the development and production of emerging technologies, as the hydrogen electrolyzers or lithium-ion batteries, could be the solution to both economic recovery (generating thousands of jobs and wealth) and sustainable GDP growth, containing the risk of climate cataclysm (EBRD, 2020).
According to the European commission, Europe is highly competitive in the production of green hydrogen innovations and is well positioned to benefit from the use of this gas at a global scale. Fatih Birol, IEA executive director, and Frans Timmermans, executive vice-president of the European Commission, wrote in May:
“If the EU seizes this opportunity, it will give itself a cutting edge on global markets”
With green hydrogen seeming to be on everyone’s minds, it isn’t shocking that at least 10 countries started looking for the gas as a source of energy security and possible exports. GTM (June 2020) refers to Portugal as “the latest nation to jump on the bandwagon” for unveiling in May a national hydrogen strategy, said to be worth 7 billion euros up to 2030.
National Strategy for Hydrogen (EN-H2)
In 2016, alongside EU’s climate and energy strategies, Portugal compromises to achieve Carbon Neutrality until 2050, having for that developed the Roadmap for Carbon Neutrality 2050. This important commitment is in line with what has been the country’s position regarding renewable clean energies, being high above the European average when it comes to the share of renewables in final energy consumption (6th in Europe). But it also encompasses a comprehensive and integrated energetic transition blueprint.
Resulting from this, in July this year the National Strategy for Hydrogen (EN-H2) is approved in the ministers’ council. The primary goal is to make green hydrogen a central piece towards the decarbonization of the economy whilst promoting a new industry with potential for exporting and generating sustainable GDP growth. We can read in the EN-H2 official publication that the potential of green hydrogen, besides being a carbon-free source of energy, lies in its high energy density, meaning 1) can be used in intensive industrial processes, 2) store high quantities of energy from renewable sources and 3) serve as feedstock for other clean fuels. Other advantages, such as the opportunity to use already functioning gas infrastructures or to decrease the country’s energy dependence are also listed below and described in this strategy’s official publication. The initial investment should surpass 2,86 million euros.
This national strategy comprises initiatives in multiple fields, such as research and development, renewable energy industry, transport sector, exports market, and in the multiple steps of the green hydrogen value chain, since production to distribution to national or international retailers. Among them we can retrieve some of the most relevant: since creating incentives for the production of green hydrogen in 2020-2030 ( by subsidizing the difference in cost between producing green hydrogen and natural gas), setting clear goals for the proliferation of hydrogen in the economy, supporting investment aimed at production and distribution of renewables, and aiming at the decarbonization of the transports sector and critical industries (carbon-intensive). The plan also includes implementing a cooperative lab (COLAB) centered at developing R&D specific to green hydrogen’s value chain and subsequent development of industries and services.
Sines’ industrial Cluster to produce Renewables
However, the central piece in the puzzle is the implementation of an industrial cluster to produce renewable gases, as green hydrogen, in Sines. This would be done through the installation of a central with electrolyzers up to 1 GWT capacity, by 2030. Matos Fernandes, Portugal’s minister of the Environment outlines that Portugal is at a favorable position as it able to deliver competitive prices in the clean energy sector. Sines, in particular, can benefit from its geographical location to be an important hub in the green hydrogen sector, exporting for Northern Europe in particular the Netherlands. The minister believes the central will also be a driver of qualified employment. At an initial stage, given the small scale of the project, is predicted that all hydrogen produced in Sines will be in full absorbed at national level. But as the production capacity increases, it will seek to enter the European market through exports, particularly to the Netherlands in naval routes.
In September this year, Portugal and the Netherlands signed a memorandum which reinforced bilateral cooperation and officializes both countries’ intention to produce green hydrogen by 2030. The memorandum with the Netherlands was signed by Environment and Climate Action Minister João Pedro Matos Fernandes and Dutch Minister for Economic Affairs and Climate Policy Eric Wiebes. “The document foresees the development of an export-import strategic value chain, ensuring the production and transport of green hydrogen from Portugal to the Netherlands and its hinterland, via the ports of Sines and Rotterdam” (eco, 2020).
Every plan has its flaws…
Criticisms are coming form many places and they range from disbelief that the plan will be sufficient to decarbonizing the economy to serious concern that we might be wasting too many resources too soon.
One major economic problem has to do with the cost efficiency of green hydrogen: right now, as electrolyzers are expensive and in little supply, renewable hydrogen is not competitive and can cost about 5 more times to produce than grey or black. Tertúlia Energia, a group of experts in the energy sector, considers that the technology to produce renewable hydrogen is not yet mature and still to expensive. Consequently, the group considers the investment in Sines’ industrial cluster may be too hasty and can waste resources, with incremental costs to consumers.
From the other side, environmental organization ZERO calls attention to the high dependence of this strategy on natural gas (given the same infrastructures that currently transport gas will be used to transport hydrogen) and questions whether it will be enough for the zero net emissions by 2050. It also shows doubtfulness regarding the bet to export hydrogen even before using it internally to eliminate fossil fuels. For ZERO, electricity instead of hydrogen, is a better option when it comes for decentralized production and years of small water supply (DN, 2020).
To sum up, only time will tell whether this move was a smart one or a missed shot in the dark. One thing we can be certain, Portugal can’t stay forever in the shadow of its European fellows nor wait for them to act and then follow behind. Either a success or a failure, this National Strategy for Hydrogen represents the beginning of the positioning of Portugal as a pioneering country in the energetic transition arena, and in times where first mover advantage can be what makes a difference, these are certainly good news.
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