Offshore Energy’s top five hydrogen stories of 2024

Hydrogen is considered one of the key components of global decarbonization, with countries setting ambitious capacity and demand targets. In 2024, governments and companies worldwide increased their investments and announced new partnerships and projects, recognizing hydrogen’s potential to decarbonize hard-to-abate sectors and provide a sustainable energy source. This article takes a look at 2024’s top five hydrogen stories.

As mentioned, multiple partnerships were created this year, with many of them leading to new projects and technology developments. Governments awarded millions to the sector and companies launched different hydrogen-related studies, started construction of production plants, reached final investment decisions (FIDs) and more.

European Commission grants €720 million to renewable hydrogen projects

At the beginning of the year, the European Commission awarded nearly €720 million to seven renewable hydrogen projects in Europe, selected through the first competitive bidding process under the European Hydrogen Bank (EHB). Six out of seven signed their respective grant agreements. One project withdrew from the process.

The funding is expected to help the winning bidders bridge the difference between their production costs and the price that industrial users are willing to pay for this emerging product.

Altogether, the projects are said to have the potential to produce up to 1.52 million tonnes of renewable hydrogen during the first ten years of their operations, avoiding more than 10 million tonnes of CO2 emissions.

To note, the hydrogen auction is one of the pillars of the EHB and uses revenues from the EU Emissions Trading System to support producers of hydrogen categorized as a renewable fuel of non-biological origin (RFNBO).

In December, the Commission (EC) officially opened the second auction that will support projects for renewable hydrogen production regardless of the sector in which it will be consumed. The dedicated budget is €1 billion. An additional €200 million is dedicated to hydrogen production in projects with offtakers in the maritime sector.

Biden-Harris administration to back US hydrogen industry with $750 million

As part of the Investing in America agenda, the U.S. Department of Energy (DOE) announced $750 million for 52 projects across 24 states to support the hydrogen industry.

As disclosed, these projects, funded by the Bipartisan Infrastructure Law, will help advance electrolysis technologies and improve manufacturing and recycling capabilities for clean hydrogen systems and components, directly supporting more than 1,500 new jobs.

DOE emphasized that the projects will support the long-term viability of its Regional Clean Hydrogen Hubs (H2Hubs) and other emerging commercial-scale deployments by helping to solve the underlying technical barriers to cost reduction that can’t be overcome by scale alone.

“Reaching cost reduction goals will open new markets for clean hydrogen—creating more clean energy jobs, reducing greenhouse gas emissions and harmful air pollution across multiple sectors of the economy, and strengthening America’s long-term competitiveness in the global clean energy market,” DOE claimed.

Flurry of green hydrogen and ammonia deals underpins EU-Egypt partnership

The Egyptian government and the European Union (EU) are advancing green hydrogen and ammonia incentives through their strategic and comprehensive partnership and new private investment deals signed by European and Egyptian companies.

The agreements, worth €40 billion and covering renewable energy and hydrogen among others, were concluded during the EU-Egypt Investment Conference, co-organized by the EU and the government of Egypt on June 29-30, as part of the Strategic and Comprehensive Partnership signed by the EU and Egypt in March 2024.

It is worth mentioning that the two parties also signed a memorandum of understanding (MoU) for the disbursement of up to €1 billion in macro-financial assistance (MFA) to Egypt. The MFA is expected to promote macroeconomic stability, improve the business environment, enhance Egypt’s competitiveness and support its green transition.

European Commission’s President Ursula von der Leyen said at the time: “One hundred days ago we opened a new era in the relations between Egypt and the European Union, with our strategic and comprehensive partnership. Today, we deliver.”

“We deliver for Egyptian businesses and entrepreneurs with €1 billion in macro-financial assistance, which will incentivise the reforms that businesses and entrepreneurs in the private sector need. We deliver strategic investments that will help make Egypt a clean energy hub at the centre of the Mediterranean, crossroads. And we deliver for Egypt’s youth, with a new skills programme so they succeed in the economy of the future. And this is just the beginning.”

Spain gives provisional go-ahead for Enagas to start developing H2Med hydrogen corridor

In July, Enagás Infraestructuras de Hidrógeno, a unit of Spanish gas grid operator Enagas, received preliminary approval from the government to start developing the Spanish section of H2Med, Europe’s first major green hydrogen corridor.

The H2med project is a transnational effort to connect the hydrogen networks of the Iberian Peninsula to those of France, Germany and the whole of North-West Europe. It consists of a hydrogen interconnection between Portugal and Spain (CelZa) and a subsea pipeline connecting Spain and France (BarMar). Its goal is to enable Europe to be supplied with affordable, renewable hydrogen by 2030.

The €2.5 billion project was launched in October 2022 and contracts for preliminary engineering and environmental impact studies were awarded in March.

In November, transmission system operators (TSOs) involved in the H2med launched a non-binding ‘Call for Interest’ to identify the needs of future infrastructure users along the corridor. Interested stakeholders were invited to submit their input regarding the consumption, production and/or marketing of renewable hydrogen along the corridor via the dedicated platform. H2med plans to share the results with stakeholders in the first quarter of 2025.

Canadian-French duo to work on $8 bln green hydrogen and ammonia project in Newfoundland

In November, French low-carbon energy company EDF and Canada’s energy transition developer Abraxas Power agreed to jointly develop a green hydrogen and ammonia project in Central Newfoundland, Canada.

To this end, the companies entered into strategic development agreements for the $8.5 billion Exploits Valley Renewable Corporation (EVREC) project that anticipates generating around 200,000 tons of green hydrogen and approximately 1 million tons of green ammonia annually.

The power-to-X (P2X) project envisions up to 3.5 GW of onshore wind capacity with associated energy and molecular storage to power green hydrogen and ammonia production, with its own dedicated port infrastructure to export produced fuels to global markets.

Under strategic agreements, EDF and Abraxas will develop the project as equity partners. The goal is to reach a FID in 2026 and complete construction from 2026 to 2030.

Once operational, it is anticipated that the EVREC project will offset over 1.5 million tonnes of CO2 every year and contribute over CAD$5 billion (around $3.5 billion) to Newfoundlanders through remittances to the provincial budget as well as various stakeholder benefit agreements over the project’s lifetime.

It is important to note that despite many positive trends in 2024, the hydrogen sector also faced much uncertainty. With project delays and cancellations, rising capital costs, the lack of public funding and offtake, significant challenges lie ahead.

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