Jul 13, 2020

European Commission Launches the European Clean Hydrogen Alliance

Ballard Power Systems (NASDAQ: BLDP; TSX: BLDP) today notes that the European Commission unveiled its hydrogen strategy and officially launched the European Clean Hydrogen Alliance last week, issuing its report “A Hydrogen Strategy for a Climate-Neutral Europe”, available here.  

The European Commission’s priority is the development of renewable hydrogen, produced primarily using wind and solar energy. However, over the medium-term other forms of low-carbon hydrogen are needed to rapidly reduce emissions and support the development of a viable market.
The European Clean Hydrogen Alliance sets out a phased approach in its report for the gradual transition to hydrogen:

  • 2020-24 timeframe: The installation of at least six gigawatts (6 GW) of renewable hydrogen electrolyzers within the European Union (EU), along with the production of up to one million (1m) tons of renewable hydrogen.
  • 2025-30 timeframe: Hydrogen is to become an intrinsic part of the EU’s integrated energy system, with the installation of at least 40 gigawatts (40 GW) of renewable hydrogen electrolyzers and production of up to ten million (10m) tons of renewable hydrogen.
  • 2030-50 timeframe: Renewable hydrogen technologies should reach maturity and be deployed at large scale across all hard-to-decarbonize sectors.

Jesper Themsen, President and CEO of Ballard Europe said, “The European Clean Hydrogen Alliance represents a bold step by the European Commission to move aggressively forward toward deployment of substantial hydrogen production and distribution capability, together with the deployment of Fuel Cell Electric Vehicles, which we see as an important part of the carbon-neutral solution for Europe and globally. Ballard’s focus on power solutions for Heavy- and Medium-Duty Motive applications, including buses, trucks, rail and marine vessels – which are disproportionate contributors to CO2 emissions – puts our Company at the center of the growing global trend toward electrification of vehicles.”   
In its report, the European Commission notes that hydrogen is a promising option for transportation. In a first phase, it is expected that early adoption of hydrogen can occur in captive uses, such as local city buses, commercial fleets (e.g. taxis) or specific parts of the rail network. Hydrogen refueling stations can be supplied by regional or local electrolyzers, but their deployment will need to build on clear analysis of fleet demand and different requirements for light- and heavy-duty vehicles. 
Furthermore, the report also notes that hydrogen fuel cells should be further encouraged in heavyduty road vehicles, including coaches, special purpose vehicles, and long-haul road freight, given their high CO2 emissions. The 2025 and 2030 targets set out in CO2 Emission Standards Regulations are an important driver to create a lead market for hydrogen solutions, once fuel cell technology is sufficiently mature and cost-effective. Projects of the Horizon 2020 Fuel Cells and Hydrogen Joint Undertaking (FCH-JU) are aiming at accelerating Europe’s technological lead.

On an important related note, McKinsey & Company’s January 2020 report “Path to hydrogen competitiveness: A cost perspective” (available here) includes detailed total-cost-of-ownership (TCO) analyses, concluding that hydrogen and fuel cells are expected to be the lowest-cost solutions – in comparison to battery electric as well as internal combustion engine alternatives – for applications such as heavy- and medium-duty trucks and long-distance urban buses, before 2030.  
The European Commission has also noted that hydrogen fuel cell trains could be developed for commercial routes that are difficult or not cost-effective to electrify. Approximately 46% of the mainline rail network is still being served by diesel technology and certain fuel cell hydrogen train applications (e.g. Multiple Units) can already be cost competitive against diesel today. 
And it notes that, for inland waterways and short-sea shipping, hydrogen can become an alternative low emission fuel, especially since the Green Deal emphasizes that CO2 emissions in the maritime sector must have a price. Scaling up fuel cell power from one-to-multiple megawatts and using renewable hydrogen for the production of synthetic fuels, methanol or ammonia - with higher energy density – are required for longer-distance and deep-sea shipping.
Some of the key actions identified in the European Commission report are:

  • Launch a 100 MW electrolyzer and a Green Airports and Ports call for proposals as part of the European Green Deal call under Horizon 2020 (Q3 2020).
  • Establish a proposed Clean Hydrogen Partnership, focusing on renewable hydrogen production, storage, transport, distribution and key components for priority end-uses of clean hydrogen at a competitive price (2021).
  • Steer the development of key pilot projects that support hydrogen value chains, in coordination with the SET Plan (from 2020 onwards).
  • Facilitate the demonstration of innovative hydrogen-based technologies through the launch of calls for proposals under the ETS Innovation Fund (first call launched in July 2020).
  • Launch a call for pilot action on interregional innovation under cohesion policy on hydrogen technologies in carbon-intensive regions (2020).

The European Commission acknowledges that the deployment goals outlined in its report requires a strong investment agenda exploiting synergies and ensuring coherence of public support across different EU funds and EIB financing, harnessing the leverage effect and avoiding excessive support.

About Ballard Power Systems

Ballard Power Systems’ (NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, passenger cars, forklift trucks and UAVs. To learn more about Ballard, please visit www.ballard.com.

Contact: media@ballard.com

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