European campaign group Transport & Environment (T&E) on Tuesday suggested the EU’s renewable hydrogen import plans are flawed and should be urgently revised, Kallanish reports.

The recommendation comes as the group commissioned UK-based environmental consultancy Ricardo to assess the EU’s needs for hydrogen imports and evaluate their potential risks and benefits. This was done with six case studies of ambitious exporting countries, for which the EU has partnership agreements with: Chile, Egypt, Morocco, Namibia, Norway and Oman.

“The study shows that the EU should be cautious about relying on uncertain imports to meet its overly-ambitious hydrogen targets,” T&E says. “Despite the big hype around hydrogen, just 1% of the planned green hydrogen production in the countries assessed has received financing.”

Assuming the announced projects reach a final investment decision, the report estimates that these six countries would only be able to deliver a quarter (2.6 million tonnes) of the 10m t of imports targeted by RePowerEU by 2030. Other issues that could aggravate their ability to scale up production include heavy reliance on fossil fuels and water scarcity.

Aside from Norway, the other five countries currently have limited renewables capacity, T&E notes. Oman’s electricity grid, for example, is almost exclusively reliant on fossil fuels. Namibia is the most extreme case, the report suggests, as hydrogen production targeting EU exports would require over 10 times the country’s projected 2030 electricity demand. Half of Namibians currently have no access to electricity at all, T&E highlights.

Ricardo’s assessment indicates that prioritising domestic hydrogen production could be cheaper than importing the fuel, as transportation costs could “nullify the advantage” of lower levelised cost of hydrogen (LCOH) production. In a limited comparison, using solar photovoltaic energy in Spain, the study calculates an LCOH of $2.1-3.5 per kilogram of hydrogen by 2030.

It then calculates transportation costs from Morocco, the closest non-European exporter country, through three routes: pipeline, shipment of liquified hydrogen and shipment of ammonia. Ricardo estimates pipeline costs to be around $1.8-3.9/kg; liquified H2 costs at between $1.2 and $4.9/kg; and ammonia costs at $0.8-4.1/kg. The last two options are more expensive because they are more energy-intensive (liquefaction and ammonia cracking). Adding all in, the cost of producing and exporting Moroccan renewable hydrogen to Europe could be between $2.6 and 8.1/kg.

“With European politicians flying across the world to secure hydrogen deals, this is a much needed reality check. Most of the countries Europe is relying on for imports are not at all ready to scale up production,” comments Geert Decock, electricity and energy manager at T&E.

“In the longer run hydrogen imports will need to play a bigger role, but there are a number of important conditions that need to be met for imports to be sustainable,” he adds.

For T&E, the top priority right now should be to develop a real market for renewable hydrogen and electrolysers in Europe, to the benefit of the local industry and economy.

Based on the investments announced, the study predicts 2 million jobs could be created in hydrogen supply chains in the EU by 2030. The study also states the RePowerEU objectives “hastily decided following the Russian invasion of Ukraine,” appear to be five times higher than what is legally mandated and effectively needed in 2030.

The Renewable Energy Directive has a binding target of around 4m t for hydrogen and e-fuels by 2030, but Agora Energiewende modelling suggests demand then will be only 3.5m t. The RePowerEU targets 20m t of hydrogen – 10m t of which should be produced in the bloc.