In May and June 2023, Zenon and Archery Strategy Consulting published the first two parts of their hydrogen report series. The latter were respectively dedicated to the comparison of different hydrogen production technologies and to the analysis of European objectives for the production of renewable hydrogen.
Even if the renewable hydrogen that will be produced in Europe in the years to come is often at the heart of the news for its potential new uses (hydrogen cars, electricity production and storage, etc.), it is nevertheless necessary to decarbonize its current uses in the first place. Indeed, 8.7 million tons of hydrogen were already consumed in Europe in 2020, including 82% by only two industries, which are oil refining and the production of ammonia, the main compound used in the manufacture of nitrogen fertilizers. Since 91% of European hydrogen production capacity runs on natural gas, hydrogen production emitted more than 80 million tons of CO2 in 2020, or 2.5% of EU-27 emissions. Replacing this hydrogen with low-carbon hydrogen would significantly reduce these emissions.
In addition to technological and industrial challenges, the production of low-carbon hydrogen must also become economically competitive so that current consumers can quickly decarbonize their activities. This report, which complements the two previously published, then focuses on the influence of various economic factors on the difference between the cost of producing low-carbon hydrogen and that of fossil hydrogen.