Risks and challenges of importing hydrogen to Europe

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Hydrogen imports from outside the EU have become an integral part of most decarbonisation pathways, both at national and union levels. Particularly noteworthy is the indicative target of 10 Mt of hydrogen imports by 2030 announced in the REPower EU initiative. Additionally, support schemes such as the announced external leg of the Hydrogen Bank, underscore the EU’s intention to count on imports to fulfil its future hydrogen demand. However, hydrogen imports come with an array of associated risks and challenges that demand attention if the EU is to establish a sustainable hydrogen economy that contributes positively to global decarbonisation efforts.  

Without additionality, hydrogen risks increasing emissions in already high carbon grids 

Renewable electricity production potential around the world is largely sufficient to satisfy the world’s future electricity demand. However, most of the electricity demand is still met by fossil fuels today, while a substantial segment of the global population lacks reliable access to electricity. This also applies to countries with which the EU or individual member states are signing hydrogen import deals. Given the enormous renewable electricity demand to produce hydrogen, it is of utmost importance that the electricity channelled into this purpose does not undermine local electricity access and power decarbonisation efforts. 

Hydrogen can be a driver for the deployment of renewables in regions that currently face financial or other challenges in pursuing such projects. However, this must come with the appropriate safeguards. Ensuring the compliance with strict additionality principle from the outset is thus even more important for hydrogen imports. 

Producing hydrogen in water-stressed areas risks increasing conflicts over water 

Producing 1 kg of hydrogen from electrolysis requires 9 litres of pure water. However, this relatively small number only refers to the water used in the chemical reaction, thus overlooking water requirements for the overall process. Since electrolysers require high purity water, this in most cases needs to undergo a raw water treatment for demineralisation, which increases the water requirement by 20 to 40% depending on the water source. Moreover, an additional 20 to 40 kg of water per kg of hydrogen are needed to cool the electrolysers in evaporative cooling systems, without accounting for the water needed to cool other parts of the process such as compressors. Overall, this can increase water consumption to up to 95 kg of water per kilo of hydrogen. 

As many areas with high renewables potential tend to be water-stressed areas, deploying hydrogen production risks increasing water scarcity and thus creating conflicts over water resources. It is therefore essential to ensure that the sourcing of water comes from either sustainable and not already used sources or is obtained through desalinisation powered with additional renewable electricity. If new desalinisation plants are built, it should be investigated how they can also supply fresh water needs of locals, beyond the production for the electrolysis. Finally, wastewater treatment must be done in a sustainable way to avoid pollution of local water resources. 

Banking on hydrogen imports comes with resource challenges, and needs strict governance standards to avoid a new resource curse  

Hydrogen has the potential to become a new highly traded resource on the global market. As the EU and its Members States are signing deals with predominantly Global South countries, hydrogen might quickly turn into a new resource curse (the empirical observation that resource-rich countries on average fail at benefitting from it and showing better economic performance than those without, often with negative consequences) , risking to harm local populations instead of creating value in the local economies. Therefore, strict standards for local job creation and population protection must be in place. Any hydrogen import, particularly in vulnerable emerging economies, needs to be carefully planned, regulated and implemented.  

Given possibly poorer governance structures in some of the target regions, Europe has a duty to ensure that no unfair exploitation of resources takes place, opportunities and benefits for local communities are created, and the products achieve a real climate benefit both at home and abroad by adhering to enforced minimum climate standards.  

Transporting hydrogen is challenging and can significantly increase the fuel’s climate footprint and cost 

Last but not least, hydrogen transportation poses significant challenges.  

First of all, the small hydrogen molecule is difficult to transport in its pure form, as a liquefied fuel. This is mostly because liquefaction happens at -263°C and requires 8-12 KWhel/KgH2, this increases by 14-22% of the electricity used to produce 1 kg of H2 (assuming the current average PEM efficiency of 60.5%). 

A perhaps more feasible alternative is transforming it and transporting it as ammonia or methanol. However, this requires additional energy for making it into a different fuel and then cracking it back to hydrogen, rendering the overall process less energy efficient and more costly. In particular, hydrogen recovery rates from ammonia cracking and purification are as low as 69.5%, entailing that almost a third of the energy is lost in the process. 

Moreover, if the carrier (for instance in the case of methanol) contains carbon, its sourcing can create additional concerns. Fossil carbon captured from industrial emissions is not climate-neutral, as it will be released back in the atmosphere at the end of the value chain. Therefore, using such a source is ultimately not compliant with carbon neutrality. Alternatives are sustainable biogenic and atmospheric CO2. However, the first is limited and competition in its use will arise. In the case of the latter, it cannot be overlooked that Direct Air Capture (DAC) is highly energy-intensive, which further reduces the efficiency of the fuel and increases its price. These carbon sources will also be needed for other applications, such as the production of other chemicals, aviation fuels or permanent storage to achieve carbon removals. 

Finally, when hydrogen is transported via ship, the choice of fuel used for transport also impacts the climate footprint of hydrogen (i.e., scope 3 emissions), with traditional fuels increasing the footprint and carbon-neutral fuels diminishing the overall system efficiency.  

Hydrogen transported via pipelines requires additional electricity to power the compressors. This increases the overall primary electricity demand and risks increasing emissions if the electricity used for compression is not sourced from renewables. According to a paper from Hermesmann et al. (2022) using the average electricity from the European grid, adds 0.18 kgCO2e/kgH2 just for injecting the hydrogen in the pipeline and an additional 1 kgCO2e/kgH2 to transport it over 4000 km. 

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Overall, a recent paper calculated that despite the significantly lower cost of hydrogen production in renewable rich areas, the overall price of hydrogen imported to Europe (both when considering pipelines and shipping) will remain 35 to 100% more expensive than that of hydrogen produced locally.