Ladies and gentlemen, good afternoon. It’s a pleasure to be speaking with you today.
Let me start by saying that never before in Europe have we seen such a level of interest about hydrogen as we have today. The reason is twofold: we need hydrogen to achieve climate-neutrality and we should use this opportunity to invest in the clean energy technologies, to restart the economy and promote innovation after the devastating economic effects of the COVID crisis.
This new Commission took office last December and since the beginning we have set our sights on a very clear goal – a climate neutral Europe within thirty years. This is the corner stone of our Green Deal strategy.
The first half of this year has definitely not gone to plan as we found ourselves combating the biggest health crisis in living memory.
Still, we are turning adversity into opportunity. We have published a Recovery Plan for Europe - the Next Generation EU - putting the green transformation at its heart. In this way, the Green Deal and the clean energy transition act as a new growth strategy. One that creates new investments and jobs for our people. One example is wind energy: over the last decade the cost of electricity generated by offshore wind fell by almost 30% and it is becoming more and more competitive compared to fossil fuel sources.
Our power sector is decarbonising rapidly and by 2030 almost 76% will come from low-carbon sources renewables (54.8%) and nuclear (21.1%). By 2050, our electricity supply is expected to be fully decarbonised with over 80% coming from renewables.
But electricity alone cannot get us there. We know that we will also need other carriers.
We also know that to keep energy costs in check, we must harness all the synergies and exploit the complementarities between the electricity sector, our vast gas infrastructure, our industry and the transport sector.
Hydrogen is a vital missing piece of the puzzle to help us reach this deeper decarbonisation and to reach it at a lower cost to people.
We have recognised this opportunity and are working on two key strategies to be launched on the 8th of July: a strategy for energy system integration and a dedicated strategy on hydrogen. They will set out how we intend to accelerate the transition to the energy system of the future. A system in which hydrogen will play a key role.
Today, we use hydrogen mostly in chemical processes. Tomorrow, hydrogen can decarbonise these industrial processes, it can be a new fuel for heavy-duty transport and clean jet fuel for aviation, or replace coal in steel-making.
To make this happen we need to focus our work in four areas.
First, we need to activate a virtuous circle of increased supply and demand for hydrogen, boosting demand in end uses, like industrial applications and transport, and investing in developing electrolysers with greater capacity. Part of this is bringing down the cost of clean hydrogen to make it competitive. For this, we need more and cheaper renewable energy, and an efficient electricity market.
We have laid the ground for this through the Clean Energy for all Europeans market design legislation which we are currently implementing.
But we will go even further to create an ecosystem approach to hydrogen production. To do this, we are creating a Clean Hydrogen Alliance to bring the full value chain of hydrogen together: investors, governmental, institutional and industrial partners. This template of an industrial alliance has proven its worth before in Europe. We aim to involve all actors upstream and downstream to accelerate hydrogen deployment and achieve cost reductions and greater competitiveness.
Second, we need a regulatory framework to shape an open and competitive market with unhindered cross border trade and infrastructures to transport hydrogen where it is needed. This could mean a need to repurpose or re-use some of our existing natural gas infrastructure and helps us to avoid stranded assets.
Third, we need to continue our research and innovation. Because developing a clean hydrogen economy poses a technological challenge.
We need to vastly scale up electrolyser technologies to support the ambition. But at this point, we still do not have the production capacity we need.
Demonstration projects are starting at 20 Mega Watts in Europe. But we need Giga Watt scale electrolysers. We also need research in fuel cells and storage. So in September we will adopt a Green Deal call of 950 million EUR under Horizon 2020, which will also cover hydrogen. Of that, more than one third will be dedicated to energy topics, including a call for a large-scale electrolyser. It is our hope that these will help us to gather the right minds and unleash their research and innovation in all the relevant areas across the hydrogen value chain.
And finally, we need international cooperation. The EU imports today just over 58% of the energy it needs. Tomorrow, we need to transform these imports of fossil fuels into clean energy partnerships. We want to work with our neighbours in the first place, but also with global partners. We need common understanding and possibly even the harmonisation of codes and standards for trading hydrogen internationally
I have seen our focus on hydrogen mirrored across the globe. The number of countries joining the International Hydrogen Council has more than quadrupled in the past three years.
And Director-General Matsuyama, I have seen that Japan has announced the next Olympic Games to be the “Hydrogen Olympics”. This is excellent!
Working side by side with our international partners is also a fundamental part of the research and innovation I mentioned earlier. This is why we are taking part in all major initiatives related to hydrogen, such as co-leading the Hydrogen Initiative of the Clean Energy Ministerial supported by the IEA. We are also involved in designing activities on hydrogen under Mission Innovation.
Ladies and gentlemen,
This is how we see the way forward – a strong approach on both an EU and an international level. This is how we scale up, exchange ideas and solidify the position of hydrogen in the energy sector.
I look forward to hearing your own views on hydrogen’s role in the energy system of tomorrow. And more about where we can work together further to shape that future.