The report published by Corporate Europe Observatory makes it clear that the plan drawn up by the European Union to import green hydrogen from North Africa as an alternative to Russian gas makes no economic and energetic sense.
A report by the EU watchdog “Corporate Europe Observatory” and the Canadian firm TFIE Strategies shows that the plan of the European Union to dramatically increase imports of renewable hydrogen from North Africa is unrealistic from a cost or energy perspective and instead diverts renewable electricity from local needs and local climate goals.
The study has been written by the energy expert Michael Barnard and considers that the production costs make renewable hydrogen potentially up to 11 times more expensive than using natural gas. And that’s before storage and transportation costs are taken into account.
‘Would European consumers be prepared to foot the heavy bill? The EU may need to re-examine its hydrogen strategy.”
This EU plan aims to become one of the alternatives to russian natural gaswhich said continental body intends to dispense with as a result of the invasion of Ukraine initiated by Vladimir Putin last February.
Green hydrogen from Morocco, Algeria and Egypt
This report examines three North African countries that have become increasingly focused on hydrogen in recent years, largely due to interest from the EU and its corporations.
Morocco, Algeria and Egypt plan to manufacture green hydrogen and hydrogen-based products, and send them to the EU via ships and pipelines, to help meet this projected demand. But how feasible are such plans, how much would they cost and would they be the best use of renewable energy in those countries?
The report shows that there are big questions about whether green hydrogen can ever be exported at attractive enough prices, given the high production and transportation costs. And the reasons given are the following:
- The use of intermittent renewable energies to power electrolysers will incur higher costs, but connecting to the grid to mitigate this could further increase costs as well as the CO₂ footprint. It would also undermine the EU criteria for green hydrogen.
- Shipping green hydrogen by sea it requires three times more energy to liquefy than natural gas, while the same volume of tanker truck would only transport 27% of the energy. Also, 0.2% of the hydrogen would evaporate each day during shipment.
- Hydrogen transport through pipelines it damages the pipes themselves and the electronic equipment inside them. The density of hydrogen would require tripling the energy used and therefore also the cost of pumping it through the pipes. There will also be high fugitive emissions.
Green hydrogen could cost up to 11 times more than natural gas per unit of energy at prices before the winter energy crisis and the invasion of Ukraine, even before storage and transportation. Hydrogen is expensive to distribute via shipping and pipelines, which is why today the vast majority is manufactured at the point of consumption.
Furthermore, in oil and gas producers Algeria and Egypt, the hydrogen projects being explored are not only based on renewable electricity (green), but also gas with carbon capture and storage (blue). Blue hydrogen is still twice the price of gray hydrogen and has the significant problem of high CO₂ emissions, especially if the captured CO₂ is used to enhance oil recovery.
“It doesn’t make much sense for Morocco, Algeria or Egypt to use their renewable electricity to make hydrogen and products from hydrogen and then send them to Europe with a significant loss of energyso that the EU can achieve climate emission reductions,” the report says.
And would European consumers be prepared to foot the heavy bill? The EU may need to reexamine your hydrogen strategyin particular its green import targets, and reassess the feasibility and cost of achieving them,” the document concludes.