The untapped market of green hydrogen in Europe is becoming harder to ignore

When Caesar crossed the Rubicon river and spoke the words “alea iacta est” or “the die is cast”, he knew he was passing a point of no return. History teaches us that times of crises call for bold decisions and that’s exactly what is happening right now. The effects of climate change are becoming more apparent and policy needs to be bold to match its severity. With Fit for 55, the European Commission aimed high, but the question of whether it will result in an equally ambitious regulatory framework still remains up for debate.

A coherent policy framework can certainly help by adding visibility and providing certainty for long-term changes and future investments, but we cannot expect too much from policy alone. Private companies have a critical role to play as ambassadors for the reduction of climate change. More than ever, business must dare to step outside its comfort zone, changing successful and profitable models on which it has relied and rapidly embrace and implement systemic shifts, such as facilitating the transition to zero-emission operational activity.

In the renewable energy sector, industry and technology are becoming more sophisticated every year. However, the unpredictability of sun exposure, cloud cover, and wind and weather patterns means the reliable delivery of renewable energy remains uncontrollable. For Eoly, green hydrogen has become a focal point. The versatility of hydrogen as an energy carrier is a key element in advancing the energy transition to CO2 abatement, especially in more difficult applications, such as heavy duty transport, maritime applications and specific industrial processes.

Eoly is currently developing several green hydrogen production projects in order to produce hydrogen in sufficient volumes, meeting the required quality, and at an acceptable cost level. But the development of these projects, typically sized between 25-100 megawatt capacity of electrolysis, requires shareholders to possess a true entrepreneurial spirit and a willingness to fund pioneering activities. This comes at a time when numerous studies have only speculated on the potential gigawatt-scale of the hydrogen economy. It’s clear that a market for green hydrogen is simply in its infancy.

The good thing is that we are not alone. We are witnessing a growing ecosystem of entrepreneurs, technology providers, public and private companies developing hydrogen-based applications, and even academia looking into promising research. But we cannot wait for CO2 pricing to set constraints on companies’ business cases. We need more companies willing to switch to green hydrogen, more start-ups and entrepreneurs willing to take the extra step, and more businesses committed to the real value of sustainable production methods.

Private companies have a responsibility to contribute to the creation of strategic partnerships that share the burden of climate change. It is time for new partners to break away from their risk-free mentality and seize the opportunities instead. Our common investment in a new economy will welcome a lot of young, bright people who want to contribute to the necessary energy transition through their professional careers. This drive does not qualify as a side effect, but signals that we’re aiming at the right future together.

Furthermore, the EU taxonomy has the potential to shift company investments towards sustainable projects and activities supporting the energy transition. The taxonomy will add a layer of sustainability compliance to the capital requirements, and by doing so, bring direct value to environmentally-sustainable investments. This entails a responsibility for private investments to raise the bar where the internal sustainability assessment of anticipated projects is concerned.

In a word, we must capitalise on the pioneering role that green hydrogen can play from all possible perspectives. Green finance in Europe requires a sophisticated taxonomy, making our research base richer, thus reducing the cost of green hydrogen and increasing its affordability for businesses and households. If we can shift away from simply debating ‘efficiency’ and instead produce an approach which is systemic in nature, via a robust regulatory framework for hydrogen production and transport, green hydrogen can prove itself as a successful renewable energy.

These evolutions justify hope. We have a golden opportunity to build up the capabilities for a green hydrogen economy right here, right now. If our policy and our public and private investments continue to be at the forefront of the transition, we can consolidate its leading role. We need to nurture this technology in response to the gigantic challenge called global warming.