Renewable and low-carbon hydrogen will primarily be used in 'no regret' markets to decarbonize existing industrial processes relying on fossil-based hydrogen, such as cement, steel, shipping and aviation, according to Jorgo Chatzimarkakis, CEO of Hydrogen Europe.
Globally, clean hydrogen and renewable energy will be considered 'two sides of the same coin,' Chatzimarkakis told Anadolu.
He also noted that clean hydrogen will be used for decarbonized air and maritime transport, commercial and industrial heating, as well as making further progress in road transport segments.
Hydrogen has the potential to displace natural gas, Chatzimarkakis said, but added that 'it will take time for industry and society to transform, but we must persevere on this and work today to succeed tomorrow.'
- Europe recognizes importance of energy independence
He said that countries in Europe can use hydrogen as an option to distance themselves from Russian oil and gas.
'The Russia-Ukraine war helped European member states realize that it was unsustainable to be so reliant on Russian energy sources,' he added.
Chatzimarkakis pointed out that the potential of hydrogen and a circular economy became even more obvious during that period.
'Indeed, more hydrogen—particularly for industry, long-term storage, and grid balancing—will ensure less need for fossil fuels and therefore a lower chance of energy dependence being weaponized,' he explained.
- Hydrogen Bank auctions
In 2022, the European Commission (EC) launched the European Hydrogen Bank to create investment security and business opportunities for European and global renewable hydrogen production.
The EC is awarding nearly €720 million to seven renewable hydrogen projects in Europe, selected through the first competitive bidding process under the European Hydrogen Bank.
Commenting on the Hydrogen Bank auction results, Chatzimarkakis said that the results were fantastic.
'We anticipate a similar trajectory of cost decreases as the market becomes more comfortable, supply chains become more predictable, economies of scale develop, and technology R&D advances,' he added.
- Hydrogen costs depend on several factors
The production process plays a role in the price of hydrogen, Chatzimarkakis said.
Depending on the production method, the location and other factors, some hydrogen is more affordable than others, he said.
Meanwhile, one of the biggest contributors to cost reduction is scale, he said, explaining that as the projects grow in number and scale, costs will come down quicker.
The regulatory environment for the market is another important factor that plays into price, he said, and added, 'Currently, strict rules on renewable hydrogen will cause a five-fold cost increase for the produced hydrogen. We are hoping these rules are eased in 2026.'
He concluded that as long as externalities like social costs are excluded from fossil fuel prices and as long as greenhouse gas emitters continue to receive subsidies, it will be difficult to achieve a level playing field for hydrogen.
By Gulsen Cagatay
Anadolu Agency
energy@aa.com.tr