DOI: 10.3303/CET23107084
Paper Received: 19 March 2023; Revised: 27 July 2023; Accepted: 28 October 2023
Please cite this article as: Torma A., Németh P., Hanula B., 2023, Hydrogen Policy Environment in the European Union, Current Status of
Policy Uptake, Chemical Engineering Transactions, 107, 499-504 DOI:10.3303/CET23107084
CHEMICAL ENGINEERING TRANSACTIONS
VOL. 107, 2023
A publication of
The Italian Association
of Chemical Engineering
Online at www.cetjournal.it
Guest Editors: Petar S. Varbanov, Bohong Wang, Petro Kapustenko
Copyright © 2023, AIDIC Servizi S.r.l.
ISBN 979-12-81206-07-6; ISSN 2283-9216
Hydrogen Policy Environment in the European Union, Current
Status of Policy Uptake
András Tormaa, Péter Németha,*, Barna Hanulab
aDepartment of Applied Sustainability, Széchenyi István University, Hungary
bDepartment of Propulsion Technology, Széchenyi István University, Hungary
nemeth.peter@sze.hu
Hydrogen (H2) can become a crucial technology in building an independent and resilient energy infrastructure.
The production and utilisation of green hydrogen will play a crucial role in the energy environment of the
European Union in the future. Several strategies were defined, and policy actions were taken. H2 has a
comparably high lower heating value and no direct harmful emission during use, so it presents a viable
alternative for conventional energy carriers. Independently from the final form of usage, H2 will play a key role
in integrating green electricity into the grid, as according to the state-of-the-art, large-scale, long-term energy
storage is only feasible in molecules containing H2. H2-based mobility solutions could offer a viable technology
for sustainable transportation. This article investigates H2 production and demand in the EU, as well as the
directives and incentives of the EU to accelerate H2 production and H2 technologies in general. Based on the
existing policies and applications, it reviews the up-to-date status of policy uptake within the EU and gives
insights into the different preparedness for the transition to a H2-based energy system of the Member States.
1. Introduction
With a comparably high lower heating value of 119.96 MJ/kg (Linstrom and Mallard, 2021) and no direct harmful
emissions during use, H2 presents a viable alternative for conventional energy sources or fossil fuels. H2 can
play a key role in integrating green electricity into the grid, as according to the state-of-the-art, large-scale, long-
term energy storage is only feasible in molecules containing H2 (Bothe, 2018). The International Energy Agency
(IEA) Statistics show that the contribution of CO2 emissions of transport to total fuel combustion was between
19 % and 22 % over the last 50 y (1960-2014) (IEA, 2014). By 2030, the European Commission (EC) envisions
at least 30 million zero-emission vehicles on European roads, 100 climate-neutral European cities, doubled
high-speed rail traffic, carbon-neutral collective travel of under 500 km, and market-ready zero-emission vessels
(European Commission, 2020b). By 2050, the EU has set out that nearly all transport utilisation should be zero-
emission. In mobility, H2 has multiple pathways to reduce greenhouse gas emissions. Besides its usage in fuel
cells, H2 can produce synthetic methane and other e-fuels, and it can directly fuel thermal and internal
combustion engines. However, the applicability of H2 for specific industries must be analysed through a
comprehensive Life Cycle Assessment (LCA) to assess the environmental impact objectively. The proposed
complex methodology should incorporate several factors: the energy balance of the various H2 production
methods, the effect of different use cases or further environmental and social topics. Recent research in H2 LCA
focuses on different production and utilisation options. Tabrizi et al. (2023) focus on the CF of green H2
production based on photovoltaics, Arfan et al. (2023) evaluate the LCA and LCC of H2 production from
biowaste, the same topic is addressed by Buffi et al. (2022) supplemented with the energy footprint of the H2
production. Grazieschi et al. (2023) analysed the energy and greenhouse gas LCA of electric and H2-driven
buses in Italy. The biomass can also be utilised for producing hydrogen in a renewable way (Peres et al., 2013).
Adopting a Systems Engineering approach for LCA could improve the overall accuracy of the CF of H2
technologies, and a holistic LCA method with an enhanced Life Cycle Inventory (LCI) can be set up. The different
policy initiatives of the EU and its member states are targeting the energy transition from widespread fossil-
based solutions to more sustainable, partly H2-based solutions. These policy initiatives have a clear influence
on the CF of H2. There are at least two focus areas to analyse: the uptake of the proposed and already adopted
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policies, the development of different KPIs regarding goals, and how sustainable is the planned transition? To
answer this research question, a more complex and holistic lifecycle-based analysing method should be
introduced. There is a lack of comprehensive scientific research which analyses the H2 policy background and
its influence on LCA results. In this article, a short insight will be given into the first topic, focusing on the H2-
related policies of the EU and policy uptake in two member states (Germany as a forerunner in H2 utilisation
and Hungary). The focus of the investigation is achieving targets in the field of green H2 production. Analysis of
the scientific literature and policy documents was used to reach the research goals. Future research will
investigate how state-of-the-art policy results can be involved in LCA methodology.
2. Hydrogen policy environment in the European Union
Review of H2-oriented goals (Lagioia et al., 2023) and strategical trends (Liu et al., 2023) towards green H2-
based society can be found in scientific research (Asiegbu et al., 2023), but the topic is evolving quickly,
necessitating a regular update on policy uptake. The following chapter investigates the current status of H2
policy environment in the EU. The most cited definition of sustainable development was laid down in the
Brundtland Report (Our Common Future) in 1987 (United Nations, 1987). In 2015, the United Nations (UN)
adopted its 2030 Agenda for Sustainable Development and defined the 17 Sustainable Development Goals
(SDGs) (United Nations, 2015a). The most recent emergence of sustainability is linked with the environmental,
social, and governance (ESG) framework. As one of the main goals of an H2-based economy is to reduce CF,
the related environmental policies should also be assessed. The Paris Agreement, adopted in 2015, is a legally
binding international treaty which provides a comprehensive framework for future goals (setting the 2 °C target)
and activities (United Nations, 2015b). Reducing CF means reducing primary energy use and converting
processes to more energy-efficient ones. It also means a massive investment need in renewable energy
production solutions. These international targets also set the framework for the environmental strategies of the
EU (to establish a greener and more sustainable Europe within a limited period). The time horizon of the
environmental strategies of the EU ends in 2050. The most important initiative is the European Green Deal
(EGD), a set of policy initiatives to transform the EU into a resource-efficient, climate-neutral continent. The
EGD covers many topics, such as tackling climate change, sustainable agriculture, environmentally friendly
transport solutions, clean energy transition, and uptake of renewable energy (European Commission, 2021a).
Strategies and programs with similar aims are – among others – the EU Sustainable Development Strategy
(European Commission, 2001), the 8th Environmental Action Programme (European Commission, 2022a), the
Circular Economy Action Plan (European Commission, 2020a), the Zero Pollution Action Plan (European
Commission, 2021b). Within the United Nations 2030 Agenda frames, the EU committed to the UN SDGs
(United Nations, 2015a). The transition to a more effective and climate-friendly energy system incorporates
several topics, among others, using renewable energy sources. It can be stated regarding the EU H2 landscape
that the use of H2 for energy production was not significant (under 2 % on an annual basis) in 2020. However,
it is a key technology in the EU’s energy and sustainability strategies (European Commission, 2020c). Getting
appropriate data about H2 production and demand in the European Union is challenging due to the lack of official
H2 statistics. According to the Clean Hydrogen Monitor 2022, the total H2 production capacity in Europe (EU;
EFTA and United Kingdom) was 11.5 Mt/y in 2020, produced by 504 H2 production sites (Allsop and Bortolotti,
2022). Despite activities in clean H2 production methods, 99.3 % of the produced amount was generated by
conventional technologies, i.e., captive reforming (80.4 %), merchant reforming (10.4 %), ethylene and styrene
production by-products (4.8 %) (Allsop and Bortolotti, 2022). The average capacity utilisation was 76 % (8.6 Mt)
(FCHO, 2022a), whereas the total H2 demand in 2020 was approximately 8.7 Mt (Franklin-Mann and Kutka,
2022). It has to be highlighted that approximately 91 % of the demand stems from the refinery industry, ammonia
production, and the production of methanol and other chemicals, whereas only approximately 4 % can be
accounted to the energy industry and approximately 1 % to the transport (Allsop and Bortolotti, 2022). For
reference, Europe was the fourth largest H2 consumer in 2021, with 8 Mt total consumption (IEA, 2022a). The
IEA’s Stated Policies Scenario (STEPS) forecasts a global H2 demand increase of approximately 22 % by 2030
compared to 2021, whereas the Announced Pledges Scenario (APS) forecasts a rise of 38 % till 2030 to the
level of 2021 (IEA, 2022a). Similar growth can be expected in the European H2 market based on the ambitious
goal of the EU’s RePowerEU strategy, which plans a target of 10 Mt of clean H2 production within the EU in
2030, along with an additional 10 Mt of imported clean H2 (European Commission, 2022c). Green H2 is mainly
produced by electrolysis using power from renewable energy sources. The installed clean H2 production
capacity of Europe has almost doubled between 2019 (85 MW) and 2022 (162 MW) (Franklin-Mann and Kutka,
2022). There were 114 operational H2 production sites using water electrolysis (power-to-gas) on a European
level in 2020, with a total capacity of 99 MW, equalling a production rate of 44 t/day (FCHO, 2022a). The most
widespread electrolyser technology was PEM (Polymer electrolyte membrane) (FCHO, 2022b). The overall
electrolysis capacity in Europe reached approximately 162 MW in 2022, which highlights 63.6 % increase
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compared to 2021 (Franklin-Mann and Kutka, 2022). In 2022, 77 % of EU Power-to-Hydrogen (PtH) capacity
and 75 % of PtH projects were powered by renewable sources (Allsop and Bortolotti, 2022). The EU attached
great importance to clean H2, defined its strategy toward the H2 economy, and incorporated this topic into several
strategic documents. Due to the length of this article, it is not possible to give an in-depth analysis of all EU
strategies and legislation on H2. The base document of the EU’s H2 strategy is the EU Strategy on Hydrogen
(COM/2020/301) (European Commission, 2020c). It appoints the frames of the EU’s activities. The planned
activities are grouped into five main categories: investment support, support production and demand, creation
of an H2 market and infrastructure, research and cooperation in H2 production, and establishment of international
collaborations. The main categories were specified in 20 key action points, implemented by the first quarter of
2022. The action points and the strategy have been linked with other strategies of the EU to support the EGD
and the more rapid transition to an H2 economy. The H2 strategy will also play a significant role in achieving the
targets of the Fit-for-55 policy package and support the sector integration of the EU’s energy system (EU
strategy on energy system integration) (European Commission, 2020d). H2 uptake as an energy carrier was
accelerated by accepting the new RePowerEU plan (RPP) in May 2022. The main goal of the RPP is to reduce
the dependence on foreign energy and to speed up the green transition of the EU energy system. One part of
RPP is to achieve massive growth in using renewable energies, with H2 being a crucial part of it. The EU has
set an ambitious goal: producing 10 Mt of green H2 in 2030 and importing 10 Mt to replace conventional energy
sources. These targets were laid down in the Staff Working Document Nr. 230 (SWD/2022/230) as a “Hydrogen
Accelerator” concept. It also defined the priority sectors that can consume more H2 in 2030 (e.g., industrial heat
production, petrochemical production (ammonia production), refineries, and transport sector) (European
Commission, 2022c). The H2 Accelerator concept includes several different measures to boost the uptake of
H2, such as raising the targets of the revised Renewable Energy Directive (RED II – 2018/2001/EU), doubling
the number of H2 valleys in Europe, speeding up the assessment and approval of H2-related Important Projects
of Common European Interest (IPCEI) and the development of H2 standards (Franklin-Mann and Kutka, 2022).
The EC proposed a revised target for renewable energies, which affects the updated Renewable Energy
Directive (RED II – 2018/2001/EU). In the field of H2 use, the targets for 2030 were raised from 50 % to 75 % in
the industry sector and from 2.6 % to 5 % in the transport sector, which means a significant growth of H2 demand
estimated on a level of 6.2 Mt for the industry and 4.2 – 4.8 Mt for the transport sector (Franklin-Mann and Kutka,
2022). One key issue is Renewable Fuels of Non-Biological Origins (RFNBO). The EC adopted two delegated
acts in February 2023 that describe the rules and definitions regarding RFNBOs. The first (C(2023) 1087)
defines the criteria which should be applied to decide whether H2 or H2-based fuel can be considered as an
RFNBO or not (European Commission, 2023). The second describes the methodology to calculate the
greenhouse gas emissions from RFNBOs on a total life cycle base (European Commission, 2023). Both detailed
regulations are important to understand and implement the actions defined in the EU strategy on H2 and the
RePowerEU plan. Other relevant policy documents include the Alternative Fuels Infrastructure Regulation
(AFIR), the Regulation on trans-European energy Infrastructure (TEN-E), the Regulation on the trans-European
transport network (TEN-T) (European Commission, 2013), the H2 and Decarbonized Gas Package of the
Commission and the EU Emissions Trading System (ETS) regulation (European Commission, 2022b) and the
new Carbon Border Adjustment Mechanism (CBAM) proposal (European Commission, 2021c) which will be in
operation since the October of 2023. The EU supports the implementation of policy measures with several steps.
One crucial tool implemented is the formation of IPCEIs. These are cross-border projects contributing to
reaching the common European policy goals. The IPCEI Hy2Tech supports the R&D&I activities for H2
production in different sectors. It incorporates 41 projects, realised by 35 different companies and financed by
the 15 signing member states with up to 5.4 billion EUR (European Commission, 2022e). Another relevant IPCEI
called IPCEI Hy2Use was launched in September 2022 to support activities on a vast part of the H2 value chain
(infrastructure, storage, and technics) to integrate H2 into industrial processes. This was prepared and funded
by 13 member states and will provide public funding of 5.2 billion EUR (European Commission, 2022d). Both
IPCEIs try to cover the whole H2 value chain to provide a comprehensive perspective and solutions. Institutional
activities and solutions such as the European Clean Hydrogen Alliance, the Clean Hydrogen Partnership, and
the Hydrogen Energy Network also support the H2-related activities of the EU. Besides the EC, most EU member
states have already adopted or developed national H2 strategies. Each member state’s national strategy is on
a different level of maturity, but progress is ongoing and accelerating. As of February 2022, fourteen EU member
and EEA states (Belgium, Czech Republic, Denmark, France, Germany, Hungary, Luxembourg, Norway, the
Netherlands, Poland, Portugal, Slovakia, Spain, and Sweden) and the United Kingdom had a relatively
developed H2 policy (FleishmanHillard, 2022). Other countries do not have a developed H2 strategy, but they
are running several H2-related projects and partially have H2-related goals (Austria, Bulgaria, Croatia, Estonia,
Finland, Greece, Ireland, Italy, Lithuania, and Romania) (FleishmanHillard, 2022). Cyprus, Latvia, Malta, and
Slovenia did not develop H2 strategies until February 2022 (FleishmanHillard, 2022).
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3. Current status of policy uptake in selected countries
This article investigates the uptake of adopted H2 policies in Germany and Hungary, focusing on H2 production.
Germany is a forerunner in H2 issues within the EU. H2 plays a crucial role in the energy sector transition goals.
The National Hydrogen Strategy (NHS) of Germany was adopted in June 2020. Other provinces of Germany
have adopted their own H2 strategy, too. As of that NHS, the domestic H2 consumption is about 55 TWh annually
(FMEAE, 2020). Most of this amount is covered by using grey H2. Only approximately 5 % of the total amount
is green H2 (Merten et al., 2020). The future H2 demand in Germany will grow exponentially. As to the study by
the Fraunhofer Institute, the annual demand for H2 will be at 80 TWh in 2030 and between 400 – 800 TWh in
2050, with great uncertainty (Wietschel et al., 2021). The NHS presumes a bit higher demand in 2030, a range
between 90 – 110 TWh, but gives no foresight for 2050 (FMEAE, 2020). The forecast of the National H2 Council
is slightly higher, with an estimate of 964 – 1,364 TWh between 2040 and 2050, including the amount of grey
H2 (TGNHC, 2023). The NHS laid down the main strategic directions and defined the targets for 2030 and 2050
in different categories. The strategy covers all the relevant fields of action, from the production of green H2
through market development, international cooperation and import-related topics to the scientific and
educational background of H2 value chain with 38 defined action fields. The NHS is targeting a massive
improvement in the green H2 production capacities. Till 2030, the overall installed production capacity should
reach 5 GW, with an expected annual production of 14 TWh green H2. The strategy also plans for an additional
5 GW by 2035 and no later than 2040. The total capacity of 10 GW should cover approximately 28 TWh H2,
which is only 35 % of the expected demand. This means that Germany should have a significant grey H2
production and/or a huge amount of green H2 import. The update of the NHS is just running, and there are more
ambitious goals defined. One of them is that the installed green H2 production capacity should reach 10 GW by
2030 (BMWK, 2023). The installed green H2 production capacity of Germany was 1,15 GW in October 2022,
according to the H2 project database of the International Energy Agency (IEA, 2022b). An additional 0,914 GW
capacity had a final investment decision, and 0,0011 GW was under construction (IEA, 2022b). This means a
slight delay in the policy uptake and some risk of reaching the targets. Hungary also focuses on H2 as a future
energy source and as an energy vector. Hungary adopted its national H2 strategy in May of 2021. Green H2
production stands at the focal point. Targets are set to 2030. The main action fields are the improvement of
green H2 production capacity, decarbonisation of industrial processes by using green H2, greening the transport
sector and sectoral integration with other energy sectors. Focusing on the production issues, the targeted value
for 2030 is 20.000 t of low carbon H2 and 16.000 t of carbon-neutral H2 with a total of 240 MW electrolyser
capacity. Another strategic source is the National Energy Strategy of Hungary, which also defines goals for H2
utilisation. The first H2 production power plant in Hungary was handed over in May 2023. The 2,5 MW capacity
device in Kardoskút produces 400 m3/h grey H2 by using grid energy. The forecasted H2 demand of Hungary
will be approximately 162.000 t in 2030, which will rise to 249.000 t by 2050 (Government of Hungary, 2021).
Both in Germany and Hungary, the strategic background for H2 was laid down, and mostly all the necessary
institutional funds and processes were established. Both analysed countries have targeted the improvement of
green H2 production capacities till 2030. The process has already begun, but there is a significant gap between
targeted values and already realised capacities in both states. It is necessary to accelerate the processes in
that field both in Germany and Hungary.
4. Conclusions
In conclusion, this scientific paper provides insights into the H2 policy landscape, including use cases and its
current adoption in both Germany and Hungary. The results highlight the pivotal role of well-defined H2 policies
and regulations in promoting the widespread use and development of this energy carrier. Germany's proactive
stance on H2 policy has positioned it as a leader in the global H2 economy. The nation's strategic investments
in research, infrastructure, and international collaborations have led to significant advancements in H2
technologies. The exploration of H2 applications in mobility and stationary contexts showcases its potential to
revolutionise the transportation and energy sectors. H2-powered vehicles (utilising fuel cells or internal
combustion engines), offer low-emission transportation with fast refuelling capabilities, addressing range
concerns and contributing to cleaner air while reducing reliance on fossil fuels. In stationary utilisation, H2's
ability to store surplus renewable energy serves as a crucial tool for grid stability and energy storage.
Acknowledgement
Project no. RRF-2.3.1-21-2022-00009, titled National Laboratory for Renewable Energy, has been implemented
with the support provided by the Recovery and Resilience Facility of the European Union within the framework
of Programme Széchenyi Plan Plus.
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