Press Release: State of the Union – Wasting funds and energy in a time of crisis

Publish date: September 14, 2022

Today, European Commission President Von der Leyen delivered the annual State of the Union Speech before the European Parliament in Strasbourg. The bulk of the speech focused on the war in Ukraine and the consequential energy crisis the EU found itself in this year with soaring energy prices and the lingering threat of economic recession. The solution? Hydrogen, hydrogen and more hydrogen. At least according to President Von der Leyen, who announced today that no less than 3 billion euros of the Innovation Fund’s budget would be earmarked for the development of a European hydrogen market.

We will create a new European Hydrogen Bank. It will help to secure the purchase of hydrogen, in particular by using resources from the Innovation Fund. 3 billion to help build the future hydrogen market. This is how the economy of the future will be built. This is our Green Deal for Europe.” – Ursula von der Leyen, European Commission President

A dedicated financial “institution” for hydrogen only feeds into the overblown hydrogen hype that, as Bellona Europa expressed a number of times, threatens to lead to the criminally inefficient use of scarce renewable resources and aggravate the existing energy crisis.

“Hydrogen is not an energy source, but an energy sink.‘’ says Ana Serdoner, Senior Policy Manager for Industry & Energy Systems at Bellona Europa. ‘’ The focus on inefficient uses of electricity such as hydrogen production is misguided and will not bring us closer to our climate targets unless it’s paired with dedicated, new renewable electricity generation. We are in an energy crisis – each TWh is precious and should be used wisely’’ she continued.

Hydrogen can only be climate-friendly if supported by dedicated, additional renewables

Channelling financial resources towards inefficient energy uses will only increase Europe’s emissions unless hydrogen production is supported by dedicated additional renewable electricity along with the renewable energy sources needed to decarbonise the electricity grid.

The REPowerEU’s goal to reduce Europe’s dependency on fossil gas and thereby create energy security in Europe is also undermined by von der Leyen’s push to provide strong financial support for European hydrogen production. By placing hydrogen at the heart of the Green Deal, renewables that should be used to replace fossil gas are threatened to be redirected towards hydrogen production.

Large scale hydrogen production will lead to even bigger energy bills

The current 10 million tonne hydrogen target alone would require an additional generation of 500 renewable TWhs in the EU, the equivalent to France’s total electricity consumption.

Not only will the hydrogen target make it more difficult to decarbonise the power sector, but it will also increase the price of electricity for consumers. Putting new large consumers of electricity into the heart of the Green Deal also goes against the more recent policies focusing on reducing electricity demand during peak hours.

Creating more demand for electricity will result in more reliance on fossil fuels

Producing hydrogen, unless coupled with the deployment of new wind and solar resources, could lead to more gas-fired power generation to meet the additional demand for electricity. This would in turn lead to increased carbon emissions and contribute to the energy dependence on fossil fuel imports from abroad.

The scarcity and value of the EU’s limited renewable electricity supply should be rather used for direct electrification. Considering the energy crisis Europe is in, getting the biggest “bang for buck” is essential for consumers. This means targeted use of resources, direct use of electricity and the targeted and specific use of renewable fuels only in cases where more efficient options are not possible.

The foundation of the Green Deal should be the efficient use of every bit of energy we have. Instead of focusing on supporting efficiency and new renewable generation, this morning’s announcements placed the focus on the most inefficient use of the resources we have. If this focus remains, it could severely jeopardise the climate outcomes of the Green Deal and risk an additional, self-inflicted energy crisis.

Relevant Bellona publications on hydrogen:

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