An increasing number of national governments, regional authorities, cities, companies and private businesses have formulated climate-neutrality targets and are striving to achieve climate neutrality by the middle of this century. Hydrogen-related technologies will play a key role in this endeavour, particularly for decarbonising hard-to-electrify industrial processes, such as steel production, and long-distance transport, including aviation and maritime shipping. Additionally, hydrogen can be used as a potential storage medium for renewable electricity to stabilise future electricity systems that will be dominated by variable renewable energy (IEA 2019). Moreover, these areas of application are not only key to achieving climate neutrality, they are also linked to prospects for new industrial value creation and related employment opportunities.
The deployment of hydrogen must go hand in hand with a rapid expansion of renewable energy, however. Hydrogen demand in the EU and Germany is projected to exceed domestic productioncapacities. In 2050, Germany is likely to consume an estimated 400 to 800 TWh of hydrogen and synthesis products (Wietschel et al. 2021). This amounts to two to four times the current renewable energy generation in Germany, which stood at 234 TWh in 2021 (BMWK, 2022c). After 2040, imports from both EU and non-EU countries are therefore expected to become the leading source of hydrogen supply for hydrogen in Germany (BMWK 2020; Wietschel et al. 2021). Simultaneously, the EU’s REPower Plan targets the production of 10 million tonnes of domestic hydrogen production and an equivalent amount of imports by 2030 (EC 2022c).
To realise these goals, both the European and the German hydrogen strategies envisage strategic technology and energy partnerships with other regions that offer favourable conditions for the production of renewable hydrogen (BMWK 2020; EC 2020). However, the development of such partnerships faces important challenges and has implications that extend far beyond the hydrogen sector. The development of an international hydrogen economy will reshape the global energy landscape and affect broader economic relations and related spheres of geopolitical influence (IRENA 2022b). Moreover, these developments are taking place against the background of major geopolitical realignments, caused by the increasing geoeconomic competition with China and the Russian invasion of Ukraine. Indeed, the latter has led the EU to announce a major increase in its hydrogen ambitions as part of its strategy to reduce its dependence on Russian natural gas (EC 2022c). This in turn raises questions regarding the development of new dependencies and vulnerabilities within an emerging hydrogen economy.
Against this background, this paper discusses the most important questions and challenges for the promotion of international cooperation between the EU and potential international partners within an emerging hydrogen economy. On this basis, it identifies entry-points for related policy action. Specifically, the paper proposes a framework consisting of six policy dimensions that European policymakers should consider when developing and supporting international partnership development. Taking these six dimensions as its starting point, the paper presents a set of nine policy messages for developing an international hydrogen economy within the context of broader decarbonisation efforts in the EU.
This policy paper was published by the Division for Analysis, Planning and Consulting at the Friedrich-Ebert-Stiftung (FES) in Berlin and the Research Institute for Sustainability - Helmholtz Centre in Potsdam (RIFS Potsdam).