ICIS Quarterly European Hydrogen Markets – Q3 2023: One step closer to a global hydrogen standard

Introduction

There were several key developments in the global hydrogen economy during the second half of the summer period. From an international perspective, one of the key developments was the emergence of India’s definition for renewable hydrogen. With yet another definition surfacing, the potential for a global hydrogen standard edged closer.

India announced its Green Hydrogen Standard in late August which was issued by the Ministry of New and Renewable Energy (MNRE) and the country chose a similar standard to the US.

Green (renewable) hydrogen in India must have well-to-gate emissions (including water treatment, electrolysis, gas purification, drying and compression of hydrogen) of not more than 2kgCO2e/kg hydrogen as an average over the previous 12 months.

Such a definition is similar from an emissions perspective to that set out by the US for Clean Hydrogen, which allows for 16.68gCO2e/MJ hydrogen, which is below the UK standard of 20gCO2e/MJ hydrogen, ICIS analysis showed.

India's standard suggests that the renewable hydrogen could be produced from either electrolysis or through biomass.

The announcement of the Green Hydrogen Standard follows from India’s National Green Hydrogen Mission, which was announced earlier in 2023. The National Green Hydrogen Mission included the development of renewable hydrogen production capacity of 5 million tonnes (mt)/year with associated renewable energy capacity addition of about 125GW in the country by 2030.

Within Europe, multiple developments emerged across the quarter which saw policy and regulation for the future hydrogen market move forward at various national and continental levels.

One of the core national developments over the quarter was Germany’s updated national hydrogen strategy, which saw a doubling of the proposed electrolytic hydrogen production capacity first outlined in 2020 of 5GW to 10GW. As well as this, the national strategy’s revision opened the doors to low-carbon hydrogen produced from natural gas.   

The revised strategy also noted an increase in forecasted levels of hydrogen demand in the country by 2030, moving from 90-110TWh to 95-130TWh, with between 50% and 70% of the country's needs being covered by imports.

At a European Union level, in September, members of the European Parliament formally approved amendments to the Renewable Energy Directive recast, also referred to as “RED III”, a policy framework which aims to drive the adoption of renewable energy across member states. The updates saw member states align on an increased share of renewable energy to be used across final energy demand by the end of the decade. However, within the RED III updates member states agreed upon binding targets for the use of renewable fuels of non-biological origin (RFNBO), commonly referred to as renewable hydrogen, across industry, transport and maritime. The targets for use of RFNBO across these sectors paves the way for the development of new hydrogen demand in Europe.  Outside of the EU, the UK government made several announcements during the third quarter of 2023 as the country progressed components of its domestic hydrogen strategy.

The UK announced its consultation on hydrogen blending, allowing market participants to weigh in on whether a 20% blend of hydrogen into local gas distribution network systems should be supported. ICIS analysis shows that this could result in around 12-18TWh of hydrogen blending in 2030.

Hydrogen blending means adding a volume of hydrogen to the natural gas distribution (local) or transmission (national) systems. Although some gas regulations allow for blends of hydrogen already, they allow usually a very small level. For example, in the UK’s Gas Safety (Management) Regulations (GS(M)R), the current allowance is 0.1%.

The UK government released the results of its hydrogen transport and storage infrastructure consultation at the start of August, outlining its minded-to position across a number of topics, such as business model support for hydrogen pipeline transport networks, and through revenue floors for storage operators. The consultation results also indicated that pipeline network development will progress via a Regulated Asset Base (RAB) as the basis for the business model.

Revenue floor support for storage operators will initially aim to support salt-cavern-based storage assets, with the support mechanism potentially functioning in the form of a private law contract lasting at least 15 years. Above-ground storage shall potentially be considered for a similar mechanism once the technology becomes more widespread.

The revenue floor will cover the sum of the minimum annual revenues ensured over the entire length of the contract, which will be equal to the total capital costs of creating the storage facility in addition to both fixed operational costs and a relatively low return on capital investment.

Q3 2023 developments

Policy & Regulation

It was a busy quarter for developments surrounding regulation for the future hydrogen economy, both in Europe and elsewhere, from India’s hydrogen standard to Germany’s acceptance of low-carbon hydrogen to fill the gap until renewable hydrogen picks up in volume.

Also in Europe, the RED III amendments were announced 12 September, giving further clarity to market participants on the drive to adopt renewable energy across member states.

42.5% of all final energy consumption in the EU must be from renewables by 2030, up from the 32% target by the end of the decade from RED II.

In the UK, policy and regulation announcements were also announced during the third quarter of 2023, with the government announcing that 17 projects had moved to the negotiation phase in the Hydrogen Electrolysis Allocation Round 1 (HAR1), with three having chosen to withdraw from the process.

Towards the end of August, the European Commission provided the market with final clarity on the pilot auction for the EU Hydrogen Bank by publishing terms and conditions explaining critical details.

Irish ambitions

The Irish government announced its hydrogen strategy in mid-July, indicating that the country aims to be an exporter of renewable hydrogen before 2040.

The strategy said that longer-term goals are for 10GW of offshore renewable energy production by 2040 and at least 37GW by 2050, which would be "more than our indigenous needs." It added that an "export opportunity may exist in the long-term."

Closer in, the strategy states that a target of 2GW of dedicated offshore wind power capacity will be built to supply electrolysers for the production of renewable hydrogen by 2030.

Water for the electrolysis pathway by 2030 would take less than 1% of Ireland's current water supply, the strategy said, adding that "Ireland is not expected to have significant issues supplying the quantities of water required."

Low-carbon hydrogen using fossil fuels with carbon capture usage and storage (CCUS) "is not anticipated to play a significant role in Ireland" as it is not a zero-carbon method of hydrogen production, however, grid-connected electrolysis will be supported.

European support

A total of 41 projects are set to receive grants from the European Commission through the European Union Innovation Fund, the commission announced in mid-July.

The Innovation Fund's third call for large-scale projects attracted a total of 239 applications, with the 41 selected now due to prepare grant agreements out of €3.6bn of funding available.

The EU Innovation Fund provides finance for programmes demonstrating innovative low carbon technologies as established by Article 10a(8) of Directive 2003/87/EC.

The European Commission has approved a €246m funding scheme to the Netherlands to support the production of renewable hydrogen, the commission said in a press release 28 July.

The scheme will support the construction of at least 60MW of electrolysis capacity, which will be awarded through a competitive bidding process due to be completed before the end of 2023.

The aid will take the form of a direct grant for a period between seven years and 15 years.

Over the course of September the French government released multiple updates on its support scheme for hydrogen. At the start of September the French government published initial instructions and information regarding the application process, providing participants a step-by-step guide on how to receive funding.

Amid this, the hydrogen market noted there were some instances of information on the subsidy scheme emerging across media outlets, indicating that a formal release was due soon.

Then on 20 September the French energy ministry published its consultation for its first hydrogen support scheme tender.

The ramp-up of the hydrogen economy will receive €3.7bn in 2024 following the German government adopting the economic plan of the Climate & Transformation Fund (KTF), it was announced on 9 August.

The KTF has a total budget of €57.6bn for next year and plans for investments to total €221.8bn between 2024 and 2027.

Out of the total budget, the ramp-up of the hydrogen economy will receive €3.7bn, which will include a hydrogen strategy for foreign trade (including H2Global) and the decarbonisation of industry.

The Bavarian Ministry of Economic Affairs has launched a first call for funding to promote the construction of up to 50 electrolysers to produce renewable hydrogen, it was announced 4 September.

The funding for the first call is for €45m with a second call for funding due to follow in 2024.

The funding will subsidise acquisition costs of electrolysers and their directly connected plant components with a funding rate of 45%.

The electrolysers must have a minimum electrical output of 1MW for the plant in order to qualify for the funding and will be required to use renewable energy generated in the region.

Project outlines can be submitted until 16 October.

Following the publication and adoption of the Delegated Acts on RFNBO (Renewable Hydrogen), the European Commission published a Q&A on the acts, aiming to support transparency around their conditions. The Q&A does not act in a binding manner.

The German Federal Government said 7 July that it passed a draft law that would enable modifications on the LNG Acceleration Act (LNGG) that would accelerate the use of import terminals for the processing of hydrogen.

The main changes to the act focus the climate-neutrality readiness of future land-based LNG infrastructure as well as the final decision on the relocation of the floating LNG terminal at Lubmin to the port of Mukran.

After review, the law concludes that the port of Mukran would be the choice of location for the currently operational Lubmin LNG import facility, despite local opposition.

Prior to this, the German parliament had approved a law which stipulated that floating storage and regasification units (FSRUs) should withdraw where permanent LNG terminals on land begin to operate.

The Romanian energy ministry published a guide on supporting investments for hydrogen production in electrolysis plants on 21 July.

According to the guidelines and under the national recovery and resilience plan (PNRR), hydrogen production targets are set at 100MW electrolyser capacity and 10,000 tonnes of renewable hydrogen production by the fourth quarter of 2025.

This comes as the ministry is relaunching the call for funding under PNRR. Eligible projects include those for investment in the renewable gas distribution infrastructure, as well as renewable hydrogen production capacity and its use for electricity storage.

The development of hydrogen legislation in Bulgaria could attract at least €1.5bn investment in the sector by 2026, investors and participants told ICIS.

Bulgaria needs a proper hydrogen law to unlock funding in the sector and all legislative steps must be aligned with the EU, a local investor told ICIS.

Bulgaria has already published the National Roadmap for the development of hydrogen, and primary and secondary legislation are currently being researched to create an appropriate regulatory framework, deputy energy minister Iva Petrova said on 25 July.

On 26 April, the Bulgarian government adopted a national roadmap for hydrogen technologies in Bulgaria in implementation of the reforms under the country’s recovery and resilience plan (RRP).

The roadmap alongside new bull could attract at least Bulgarian Lev3bn (€1.5bn) for the development of hydrogen technologies by 2026, several participants told ICIS.

Hydrogen certification

CertifHy announced that Bureau Veritas will be the certification partner in the scheme that will offer certified proof of origin for hydrogen throughout Europe, the two companies said 27 July in a joint press release.

Bureau Veritas, which had global revenues of €5.7bn in 2022 and specialises in laboratory testing and inspection and certification services, will perform audits to ensure that the energy produced meets the scheme's requirements.

CertifHy is a European Union voluntary scheme for the certification of hydrogen as a renewable fuel of non-biological origin (RFNBO) and grants a tradeable value to renewable and non-renewable hydrogen.

Transmission

Scottish recommendation

Scotland announced its plans for entry into the European market towards the end of August, as outlined by a report published on 31 August by the Net Zero Technology Cantre. The plan, outlined via infogram below, would see a hydrogen pipeline connection link Scotland with core hydrogen markets in Europe.

European developments

Belgium passed a new law on hydrogen transmission on 25 July, which introduced a regulatory framework for the transportation of hydrogen through pipelines into the Belgian hydrogen market.

One of the main stipulations is the establishment of the conditions for the designation of a Hydrogen Network Operator (HNO) for Belgium.

The HNO will be designated over a period of 6-7 months from the law entering into force.

The HNO will operate for a period of 20 years, which may be prolonged at the request of the HNO, five years before its termination date.

Other existing networks may obtain the status of independent operators. Operators can also maintain ownership of their networks and request the HNO to manage the network on their behalf.

The methodology for transferring ownership to the HNO from network operators is yet to be developed.

Alongside this, the Belgian council of ministers approved a subsidy of €250m to build a hydrogen transport network. The plan entails an interconnection with Germany and a system connecting different Belgian industrial clusters in Ghent, Antwerp, Mons, Charleroi and Liège.

The funding will be made available to the hydrogen network operator who will be designated at a later date.

An earlier decision by the minister in April 2023, has allocated €300m to support the development of the infrastructure. The fate of the remaining €50m is yet to be decided.

GRTgaz, the French gas transmission system operator (TSO), and its German counterpart OGE, renewed their commitment to a hydrogen corridor which includes an interconnection between the two countries.

The aim of the project is to transport renewable hydrogen produced in Spain and Portugal through France (H2Med corridor and Hy-FEN) until it reaches its destination in southern Germany, supplying large industrial consumers.

Bulgarian natural gas TSO Bulgartransgaz announced that it launched a non-binding market demand assessment survey for hydrogen transmission capacity in the country.

Several European countries have launched such surveys in recent weeks to seek appetite for hydrogen infrastructure capacity and the wider hydrogen economy going forward.

Spanish, French and German gas TSOs, Enagas, GRTgaz and badenovaNETZE, launched a series of non-binding calls for interest (CFI), reviewing potential market sizing for hydrogen pipeline networks based on projects spanning the three countries.

Spanish market participants are being consulted on potential needs for the first phase of a national hydrogen network, including the H2Med link which shall connect Portugal, Spain and France. GRTgaz and badenovaNETZE  were seeking views on the potential hydrogen network project RHYn, located towards the German-French border.

Both CFI will run until 17 November, with Enagas aiming for publication of results around the end of January 2024.

Spanish TSO Enagas announced it will launch a call for interest on 14 September to gather demand related to the Spanish Hydrogen Backbone system.

The backbone system, part of the H2Med, aims to harness the potential of solar production in the Iberian Peninsula to produce renewable hydrogen, which would then be transported to France via the BarMar underwater pipeline and eventually on to central Europe.

The H2Med entails of mainly three axes, two moving south-north and an additional one moving west to east in the north of the country. The network includes two international interconnections with Portugal and France.

The Spanish TSO Enagas, Portuguese TSO REN, and French TSO GRTgaz are all involved in the development of this project.

Bulgartransgaz has invited market participants to submit their non-binding demand indications for hydrogen transmission capacity.

The results of the survey will aid the future planning of infrastructure with potential for both pure hydrogen infrastructure and adapting the existing gas infrastructure with a mixture of up to 10% of hydrogen content.

Storage

The first open season at the HyStock facility at Zuidwending in Groningen in the Netherlands called a success after the Open Season ended.

HyStock, a subsidiary of Dutch natural gas TSO Gasunie, said in a press release that "the requested reservations far outbid the offered storage capacity of 216GWh."

The Open Season ran from 15 June to 14 July, with an auction set to allocate the capacity to the market players.

HyStock's first hydrogen cavern is expected to be commissioned in 2028 with the other three caverns due to follow in 2030.

Germany’s energy supplier RWE has made progress with its plans to convert its natural gas storage facility at Epe into hydrogen storage by 2026.

RWE is currently waiting for approval from the Federal Energy Regulator (BNetzA) for conversion of capacity sufficient to store approximately 66 million cubic meters (mcm) of hydrogen in the two caverns. From this capacity 28mcm of hydrogen would be made available to customers in an initial stage.

Earlier in February 2023, the company submitted planning approval documents to the Arnsberg District government for the construction of a hydrogen storage facility in Epe, Gronau.

German utility Uniper launched its HyStorage research project with the aim to determine the technical viability of porous rock facilities for the storage of hydrogen, the company announced on 8 August.

The testing process is expected to take place on a designated drilling site at Uniper Energy Storage Bierwang site.

The Uniper-led consortium is consisting of the energy firms, NAFTA, Securing Energy for Europe (SEFE), RAG Austria and OGE and intends to bring a specialised storage testing unit which will investigate the effects of hydrogen of porous rock formations.

The research project does have the backing of the Southern Bavarian Mining Authority, which has also approved this proposal.

German renewable firm ENERTRAG aim to produce 12,000 tonnes/year of renewable hydrogen starting from 2027.

This comes just as ENERTRAG, in close cooperation with the district of Pritzwalk, announced plans to build a hydrogen production plant in the Prignitz-Falkenhagen industrial park with 130MW electrolyser capacity (north-east Germany).

The renewable hydrogen will come from wind and solar and seeking to produce 12,000 tonnes/year of renewable hydrogen, ENERTRAG told ICIS.

The ENERTRAG plan is to designate an industrial area on which hydrogen production and a local substation are to be built. The 130MW plant is scheduled to start operations for mid to late 2027, added the firm.

CCS update

The Porthos CO2 transport and storage project in the Netherlands was authorised to go ahead by the Council of State, Porthos said 16 August.

The Council of State ruled positively on the ecological assessment of the Porthos project after it concluded that the nitrogen deposition would not have a significant impact on nearby natural areas.

The final investment decision (FID) for the project is currently being prepared with the aim to begin construction in early 2024 and operations by 2026.

Porthos aims to permanently store 2.5mt/year of CO2 in empty natural gas fields in the North Sea seabed.

The CO2 will be sourced from industry in the Port of Rotterdam. A total of 37mt of CO2 will be able to be permanently stored in a sealed reservoir of porous sandstone over 3 kilometres beneath the North Sea.

The Norwegian Ministry of Petroleum and Energy has offered a new exploration licence on the Norwegian Continental Shelf related to CO2 storage, the ministry said 18 August.

The exploration licence has awarded an area to the east of the Sleipner East field in the Norwegian part of the North Sea.

The licence has been awarded to Sval Energi, Storegga Norge, and Neptune Energy Norge.

The licence is offered with a binding work program with installed mileposts that ensure fast and efficient progress, or the return of the areas if the licensees do not carry out the storage project.

The UK government announced on 31 July that two new clusters will be developed in the field of CCUS through the Track-2 process.

The announcement came as the UK government and the North Sea Transition Authority (NSTA) also launched hundreds of new oil and natural gas licenses in the UK's North Sea.

Following on from the applications for Track-2 the UK government concluded that Acorn and Viking T&S systems would be best placed, subject to final decisions.

Supply/Demand

Lhyfe became a partner with Tegera Solutions for the construction of a renewable hydrogen production site in northwest France, Hy'Touraine, the company said 30 June.

The site will have a production capacity of 2 tonnes/day and will source renewable energy from the local power operator, the SEIL and its renewable energy company EnER Centre Val de Loire.

The Hy'Touraine project will be supported by a €3.4m ADAME grant for the gradual deployment of infrastructure.

Djewels, 100% owned by Hydrogen Chemistry Company (HyCC), has contracted McPhy for electrolyser supply and Technip Energies for the design and construction of a 20MW renewable hydrogen plant, HyCC said 4 July.

The contracts are subject to HyCC taking FID, due to take place before the end of 2023.

The plant, located in Delfzijl about 10km south of Eemshaven in the Netherlands, will be operated by HyCC and is slated to produce up to 3,000 tonnes/year of renewable hydrogen.

RWE, Mitsui, and the Port of Tilbury announced that the companies are to investigate the possibility of renewable hydrogen production to aid decarbonisation at the port.

The three companies signed a memorandum of understanding (MoU) for two renewable hydrogen projects in the Port of Tilbury, located in Essex, southeast England.

The MoU will allow for a small scale "proof of concept" demonstrator project to produce renewable hydrogen to allow items of port equipment to switch from fossil fuels to hydrogen.

Furthermore, an initial study will be conducted into a 10MW renewable hydrogen plant housed on the previous site of a coal-fired power plant in Thames Freeport.

The project will look into scaling up development to over 100MW over a 10-year period.

ZeroAvia and Masdar signed a partnership agreement to explore hydrogen production and supply at key locations, it was announced 23 August.

The initial phase of the partnership will focus on projects in both North America and Europe, but will also look into the potential for hydrogen-fuelled flights in the UAE.

A project to develop a renewable hydrogen ecosystem in the Veneto region of northeast Italy was announced by three companies (Alpiq, San Marco Petroli, Sinloc) on 5 September.

The companies will study the feasibility of developing a 10MW electrolyser plant that will supply hydrogen to regional transport companies to decarbonise water transportation in Venice Bay.

Annual production is estimated at 12,000 tonnes/year of renewable hydrogen. The H2 Laguna project is also slated to distribute renewable hydrogen through San Marco Petroli filling stations and also for maritime navigation.

Advanced design work has begun on a hydrogen production project that could have capacity of up to 1GW and is expected to produce approximately 230,000 tonnes/year of low-carbon hydrogen, the developer said on 25 September.

Hydrogen produced by the HPP2 project, due online in 2026 and being developed by EET Hydrogen, will be used by local industrial and power generation customers in the northwest of England within the HyNet cluster.

This follows on from the front-end design and engineering (FEED) completion on the 350MW HPP1 plant, also due online in 2026, back in September 2021. The two plants are adjacent to each other.

HPP1 and HPP2 combined are expected to capture some 2.5mt/year of CO2 before increasing capacity to 4GW by 2030.

Sinopec's renewable hydrogen project started commercial operations on 30 June according to the developer, the state-owned oil and gas company said 3 July.

The hydrogen plant, located in Xinjiang, can produce 20,000 tonnes/year of hydrogen at full capacity according to Sinopec, with 210,000 standard cubic metres (scm) of storage capacity and pipelines with transmission capacity of 28,000scm/hour.

Sinopec has invested nearly CNY3bn (€0.38bn) to develop the project since November 2021, including solar power generation project with the installed capacity of 300MW.

The project includes 52 water electrolysers.

European hydrogen producer Lhyfe announced it intends to develop a new renewable hydrogen plant in Perl, west Germany, the firm announced 11 July.

Lhyfe is expected to build a 70MW renewable hydrogen production plant close to the French border in Saarland. The output of the plant is planned to be 30 tonnes/day of renewable hydrogen.

The construction is confirmed to take place in the first half of 2027, and it will be connected to the Mosel Saar Hydrogen Conversion (mosaHYc) hydrogen island network.

The renewable hydrogen project is currently under assessment for the granting of authorizations as well as subject to financial investment decisions.

Greek energy firm Motor Oil Hellas (MOH) plans to build a 30MW renewable hydrogen plant to be operational by 2026, the firm said in a statement released on 27 September.

The 30MW EPHYRA electrolysis project will produce 4,500 tonnes/year of renewable hydrogen from 2026 and will be integrated into the industrial operations of MOH’s Corinth refinery in Aghioi Thedoroi.

The EU Clean Hydrogen Partnership supported the project with a €17.7m grant.

“With their integrated approach, hydrogen valleys [like EPHYRA] pave the way for creating the first regional ‘mini hydrogen economies,’ combining or aggregating supply and demand, often through long-term absorption agreements,” Hydrogen Europe CEO Jorgo Chatzimarkakis told ICIS recently.

Hydrogen demand

Hydrogen will be added to the energy mix at the Austrian Donaustadt power plant based in Vienna, after regional energy provider Wien Energie announced a three-month operational trial on 13 July.

The operational test represents the first of its kind on a commercial gas and steam turbine plant. Commercial partners RheinEnergie AG, Siemens Energy and Verbund AG have invested €10m in the project.

Initially, 5% hydrogen will be used at the combined-cycle gas turbine to phase out natural gas. The amount is set gradually increase up to 15% between mid-July and mid-September, according to project partners.

The energy mixture is expected to reduce emissions by 33,000 tonnes of CO2 during plant operations at Donaustadt.

If the test is successful, the system could be certified for continuous operation.

Hydrogen volumes could be increased up to 30% in a future trial.

The European Union announced on 25 July that more recharging and refuelling stations for alternative fuels will be deployed in the coming years across the region, as well as adopting a new law to decarbonise the maritime sector.

With regard to road transport, the EU announced that from 2025 onwards, fast recharging stations of at least 150kW for cars and vans need to be installed every 60km along the trans-European transport (TEN-T) network.

Recharging stations for heavy-duty vehicles will also be every 60km but will have a minimum output of 350kW by 2030.

Hydrogen refuelling stations serving both cars and lorries must be deployed from 2030 onwards in all urban nodes and every 200km along the TEN-T core network.

Maritime ports welcoming a minimum number of large passenger vessels, or container vessels, must provide shore-side electricity for such vessels by 2030, and airports must provide electricity to stationary aircraft at all gates by 2025, and at all remote stands by 2030.

International Trade

The European Union strengthened its energy relations with South America after inking new agreements with Argentina and Uruguay during week 29. This is in addition to funding hydrogen projects in Chile.

On 17 July, at the EU-CELAC Summit in Brussels, the EU and Argentina signed an MoU for areas of cooperation on renewable energy, hydrogen and methane emissions abatement.

A day later, the EU also announced that Uruguay had signed an MoU on renewable energy, energy efficiency and renewable hydrogen.

The UK and Germany signed a declaration to work together to underpin international trade in hydrogen, the UK energy department said in a statement on 26 September.

The agreement was signed in Berlin by UK energy efficiency minister Lord Callanan and German energy secretary Philip Nimmermann.

The two countries will "accelerate the role of low-carbon hydrogen in their nations' energy mix, showing the world how to expand new net zero-friendly markets", the statement said.

Under the agreement, hydrogen technologies should become "cheaper and more accessible", the statement added.

Outside Europe

The Saudi-listed ACWA Power developer and investor in power generation signed an MoU with Italian energy major Eni and five other Italian companies to bolster cooperation in renewable hydrogen, as well as water desalination.

The agreement was reached on the sidelines of the Saudi-Italian Investment Forum held in Milan on 4 September.

Under the terms of the MoU, Eni and ACWA Power will cooperate in renewable hydrogen research and development of sustainable technologies.

Other companies ACWA Power has signed agreements with include the Chamber of Commerce Confindustria, utility and waste management firm A2A, industrial solutions provider Industrie De Nora, specialty additives manufacturer Italmatch Chemicals, and classification and engineering solutions provider RINA.

Hyphen Hydrogen Energy and the ITOCHU Corporation announced 8 August that the two companies have signed an MoU surrounding hydrogen in Namibia.

The MoU will explore areas of potential collaboration and will begin talks surrounding a large-scale renewable hydrogen project.

Hyphen has ambitions of building a renewable hydrogen production asset that will produce 2mt /year of renewable ammonia by 2029 that will be sold into both regional and international markets.

It will source electricity for the renewable ammonia production from 7GW of renewable generation capacity and 3GW of electrolyser capacity located on Namibia's west coast.

Outlook

With India having announced its hydrogen standard during the third quarter of 2023, a more transparent global hydrogen standard moved a step closer.

Clear and concise regulation surrounding a global hydrogen standard has been filtering through from the likes of the US, the EU, and the UK, but not from other global regions that will have a kay part to play as hydrogen becomes a seaborne commodity.

It remains to be seen how other countries in other regions with different potential for hydrogen generation in terms of geology and renewable potential will proceed with their own hydrogen standard, however, with India taking direction from the US, this could be a starting point that others could also follow.

The development of a global hydrogen standard has been seen as key to the development of global hydrogen trade, as Europe seeks to import 50% of its 20 million tonne/year supply target by 2030 with renewable hydrogen that matches its own definition for domestic hydrogen production.

Global commodities are also facing volatility as the winter season begins to take hold in the northern hemisphere.

In mid-October, European wholesale gas and power prices saw steep increases as concerns over the situation in the Middle East with the Israel-Hamas conflict, as well as forecasts suggesting that the second half of October would be cold saw market participants take long positions, supporting the Dutch gas TTF prompt.

This could have ramifications for the development of low-carbon hydrogen supply given the increased cost of natural gas as a feedstock if the situation worsens and Europe experiences a cold winter.

This would also have a knock-on effect onto ammonia, with Europe potentially ramping down domestic ammonia production due to the higher feedstock costs and would rekindle the conversation surrounding costs of renewable hydrogen against low carbon hydrogen, swinging the balance towards renewable if the European gas hubs stay elevated during the winter months.

Nonetheless, many announcements for projects were seen during the last quarter, a trend that is set to continue in the near-term despite the potential price pressure with more government support being made available and additional regulation being consulted on and put into place.

This certainty and clarity is what hydrogen developers have been calling for, and the legal framework from where they hydrogen economy could grow from is starting to take place, both in Europe and elsewhere.

Author:

Gary Hornby has spent more than a decade in the energy industry as an analyst, trader, and market reporter. Gary has spent the last 12 months at ICIS covering hydrogen, diving into the state of play from both a demand side and supply side to produce content that informs participants about a developing market.

Contributing author:

ICIS Hydrogen Editor Jake Stones is a hydrogen production methods and costs specialist. Over the previous two years Jake has focused on developing the ICIS Hydrogen Pricing and Insight service, drawing on his experience of European and global gas markets to deliver price transparency for the nascent hydrogen market.