The optimism about the future of hydrogen has been destroyed

Pierre-Etienne Franc has a question for the public on the Ahoy stage on Tuesday morning. Which of those present thinks the hydrogen economy is doing well? « Stir your hand, » the director of Investment Fund Hy24 asks.

There are no hands going up.

What future is there for hydrogen such as clean fuel in the energy transition? The question revolved at the World Hydrogen Summit & Exhibition in Rotterdam last week. A sector met that could potentially play an enormous role in making the world more sustainable, but at the same time struggles with a kind of identity crisis. « There is a lot of confusion, » says Franc. Ivana Jemelkova, chairman of the World Hydrogen Council, adds: « Do we now fall from a cliff or not? »

Not so long ago, green hydrogen was the hope of the energy transition. Steel factories, fertilizer factories, plastic factories, aircraft manufacturers, truck manufacturers and politicians: they had all set their sights on the light, clean energy carrier around the CO₂-emission.

You can make green hydrogen with huge amounts of energy from renewable sources, such as sun and wind, in so -called electrolysis factories (in contrast to gray hydrogen, which is made with fossil energy and therefore produces less to no climate gains). In recent years, countless parties in Europe, including Shell, have announced that they would put down on green water -solid factories.

Little is left of that optimism. Projects are difficult to get off the ground in Europe. Green hydrogen seems to remain incredibly expensive for years. This stops, among other things, steel manufacturers from investing definitively in their hydrogen steel factories. It is known, for example, that ArcelorMittal has for the time being deleted this ambition. In principle, Tata Steel in IJmuiden still wants to continue, but when the hydrogen wants to apply, it is not certain. For builders of Waterstoff factories, therefore, it remains unclear which revenue model they can go out of.

Green hydrogen seems to remain incredibly expensive for years, which scares investors in the sector

Not only the price is a problem. The much -discussed hydrogen management between industrial areas in the Netherlands and Germany, the Delta Rhine Corridor, is delayed, the cabinet announced last summer. The thick black tubes no longer have to be underground in 2028. The cabinet is now aiming for around 2032.

In the meantime, the Trump government deleted the most forms of hydrogen support in the United States. For example, plans stagnate and there is no production capacity. That is an existential threat to the sector, barely two years after there appeared to be an endless wave of new announcements. And perhaps even more problematic: the situation endangers a timely energy transition. Being operational in 2030 requires that the construction of water -solid factories is now starting. If that does not happen, then the sustainability of industrial sectors is very difficult.

« The growth is far below the targets, » says Gerben Hieminga, who monitors the hydrogen sector for ING. In Europe in 2030 the European Commission wanted to have a hydrogen production of more than 9 million tonnes. However, it seems that this will come to 4 to 5 million tons. Shell is building a large water dust factory in the port of Rotterdam, but no final decision has been made for many other plans of this size. Only in marginal projects is a bit more shot.

Investment

The uncertainty in the sector can be felt at the stock exchange in Rotterdam. It is often about the endless absence of Fidi, ‘Final Investment Decision’, or the final investment decision after an earlier announcement of a plan. In the port of Rotterdam this plays a role in several projects, from BP and Vattenfall, but also in other parts of Europe.

« We made a lot of progress last year, » says Carlos Barrasa of the Spanish energy company Cepsa. It works in Andalusia on a large water -solid factory: a region that applies as promising for green hydrogen production, due to the abundance of green solar power.

In practice, a decision is not made. « A barrier is the connection to the steam network, » says Barrasa. « We need to be sure that we can get 400 megawatts of electricity. » And that doesn’t work. « Hopefully we will be here next year and we have made a final decision. »

But perhaps the biggest problem is that green hydrogen is still too expensive for customers to be attractive. The price is 5.80 to 8.80 euros per kilo, according to ING in an analysis at the beginning of this year – and that is still in southern Europe and Scandinavia, where solar power and hydropower flow are abundant. That is much more than that for ‘gray’ hydrogen, which is generated with fossil energy.

There is plenty of hydrogen itself. It is the most common element in the universe. But on earth it is (almost) always in connections with other elements. To ‘loosen’ hydrogen with green electricity is expensive. Customers don’t just want to pay that difference. « The question is the big theme for me, » says Jan Taschenberger of Uniper. « If supply and demand do not come together, we will not see any further projects. »

If supply and demand do not come together, there will be no further projects

Extra complicated is that builders of factories prefer to want long -term contracts before they make their investment. But customers are not waiting for that kind of long -term obligations. « The idea is that with upscaling hydrogen becomes cheaper, » says Hieminga of ING. « So why would you commit to the highest price for fifteen years? »

Shell as a pioneer

One of the few hydrogen projects that seems to be running nice is a large Shell factory in the port of Rotterdam. On the occasion of the fair there are countless excursions for interested people to this bright spot: it must become one of the first large green water -solid factories of a Western company.

The parking space on the large sand plain behind the Dutch dunes is full of parked cars. « That means that around five hundred employees are now busy, » says project director Suhail Kak to a group of journalists.

Not only is it talked about hydrogen, there is actually a construction – something that Shell likes to emphasize these days. Outside a red tractor drives over the road plates, a man runs through the metal construction everywhere, with a helmet and a transparent hood for his face.

The factory itself contains ten electrolysers, who together have a capacity of 200 megawatts (or enough to provide approximately 200,000 households). The energy must come from wind turbines on the North Sea of ​​the Dutch Coast park, which is partly of Shell and partly from Eneco.

Shell managed to get the earnings model because it will apply the hydrogen itself in refineries. But the group ran into similar problems in Rotterdam such as the Spanish energy company Cepsa in Andalusia. The factory could only get a connection from network operator Tennet far in the future, due to the shortage on the power grid. In the end, Shell could one temporary connection get, for which it has to construct a cable itself.

The port of Rotterdam itself has even greater ambitions. It has made room for terminal companies to import hydrogen and for green water -solid factories from companies other than Shell. But when the construction starts, if that happens, it is still unclear.

At the Congress in Rotterdam, the sector tries to courage to courage with recurring mesmerizing formulas: fundamentally there is nothing wrong with the future of hydrogen, there is only wrong « expectation management, » said Ivana Jemelkova from the stage. There was a ‘hype’. There were also sun and wind energy in a few years, says Alexander Tancock, director of factory builder Intercontinental Energy, on stage. The production possibilities for hydrogen seem to develop even faster than those of those other two sustainable energy sources, says Pierre-Etienne Franc.

At the same time, nobody can ignore that the situation is serious. The French builder of Waterstoff factories McPhy went bankrupt in May. Thyssenkrupp Nucera, an independent spin -off from the German group, announced that it had almost no orders in mid -May. The stock market price of almost 25 euros in 2023 from Nucera has fallen to 8 euros. A person involved from the world of electrolyser construction who wants to remain anonymous says that several smaller companies such as McPhy are falling over.

Hero role

Can hydrogen still survive and deliver on its hero role? The sector itself lays the solution especially with governments. They have to cross the bridge more, with subsidies, risk coverage, mixing obligations and improved power networks and hydrogen transport networks.

What regularly returns on the stock market is a plan from the European Commission to make hydrogen decrease for large industrial companies. This can lead to more investments and in the long term reduce the price of hydrogen. But that policy is going far too slowly, says the sector. Pierre-Etiennce Franc: « Only Romania has now implemented that, » he says laughing.

Hieminga from ING would like to see that the subject is being looked at more pragmatically. « I think perfectionism has become the enemy of good. » Due to the attempt to arrange everything properly in one go, the market in Europe has become very complicated, says Hieminga. For example, according to the definition of the EU, ‘green’ hydrogen may not be made with the help of nuclear energy, and there are also complex rules for a water dust factory at night runs on fossil electricity, but during the day (when the sun shines) on green electricity.

Hieminga also points out that green hydrogen can now preferably be used only in the industry, and for expensive fuels in air and shipping. But perhaps it is better to create question if you mix hydrogen in the gas network and thus helps residential areas to make it more sustainable. « That is not where you want to end, but perhaps it is now necessary to create customers. »

At the excursion on the Second Maasvlakte, an employee of the Shell water substance factory tells that she recently saw a dog walking around in the adjacent site. That could be a sign, she says, that will soon be built there: the site is intended for a water skating factory, and dogs are walking over a building site to prevent birds from breeding there.

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