EU HyWays report concludes biomass least costly and preferred renewable for hydrogen production; hydrogen can replace 40% oil by 2050

Ahead of a €940 million (US$1.4 billion) funding round for hydrogen development, the scientific project HyWays funded by the EU's 6th Framework Program has found that introducing hydrogen into the Union's energy system would reduce total oil consumption by the road transport sector by 40% between now and 2050. The study looked at 10 member states and found bio-hydrogen is preferred as the main renewable production pathway, having the largest potential even after taking into account alternative uses for biomass, such as biofuels and bioproducts; hydrogen based on biomass is also by far the most cost-effective of the non-fossil based production methods.

The new analysis presents a "European Hydrogen Energy Roadmap" [*.pdf] and Action Plan (summary table, click to enlarge), which shows that by taking a leading position in the worldwide market for hydrogen technologies, Europe can open new economic opportunities and strengthen its competitiveness. The report was published as European Ministers responsible for research agreed to invest €940 million into a public/private research partnership for the development of hydrogen and fuel cells: the Joint Technological Initiative for Fuel Cell and Hydrogen technology.

However, the report states that transition to hydrogen won't happen automatically. The introduction of hydrogen into the energy system faces two major barriers:

• Cost reduction. The cost of hydrogen end-use applications, especially for road transport, need to be reduced considerably to become competitive. A substantial increase in R&D investments is needed together with well balanced distribution of deployment to ensure that the economic break-even point is reached as soon as possible at minimum cumulative costs.
• Policy support. Hydrogen is generally not on the agenda of the ministries responsible for the reduction of greenhouse gasses and other pollutants, nor in ministries dealing with security of supply. As a result, the required deployment support schemes for hydrogen end-use technologies and infrastructure build-up are lacking.

Key conclusions from the HyWays project are:

Emission reductions. If hydrogen is introduced into the energy system, the cost to reduce one unit of CO2 decreases by 4% in 2030 and 15% in 2050, implying that hydrogen is a cost-effective option for the reduction of CO2. A cash flow analysis shows however that a substantial period of time is required to pay back the initial investments (start-up costs). Total well-to-wheel reduction of CO2 emissions will amount to 190 – 410 Mton per year in 2050 (2). About 85% of the reduction in emissions is related to road transport, reducing CO2 emission from road transport by about 50% in 2050. Furthermore, the introduction of hydrogen in road transport contributes to a noticeable improvement of air quality in the short to medium term. This holds specifically for the most polluted areas such a city centres where the sense of urgency is greatest.

Security of supply. Like electricity, hydrogen decouples energy demand from resources. The resulting diversification of the energy system leads to a substantial improvement in security of supply. The total oil consumption of road transport could be decreased by around 40% by the year 2050 as compared to today if 80% of the conventional vehicles were replaced by hydrogen vehicles. Based on the long-term visions as developed by the member states that participated in the HyWays project, about 100 Mtoe of oil is substituted due to the introduction of hydrogen in transport.

Production pathways and costs. For the direct production of hydrogen, excluding hydrogen produced by means of electrolysis, about 33 Mtoe of coal and natural gas and 13 Mtoe of biomass will be needed in 2050. Biomass is seen as the preferred renewable as biohydrogen can be produced efficiently from the gasification of lignocellulosic material. The assessment takes into account the fact that biomass can be used for other forms of energy. Hydrogen from electrolysis based on electricity from wind is seen as holding less potential, whereas electrolysis from solar power will play a marginal role. The main primary energy source for electrolysis will come from nuclear energy (graph, click to enlarge).

Equally important is the fact that several pathways exist that can produce hydrogen at comparable price levels and in sufficient amounts. Of the non-fossil fuel based pathways hydrogen from biomass is seen as the most-cost effective pathway by far. This cost-effective range of production options ensures a relatively stable hydrogen production price. Hydrogen from biomass and fossil fuels becomes cost competitive as a fuel at oil prices over $50 – $60 per barrel equivalent. Hydrogen from electrolysis based on nuclear energy is seen as a costly alternative, as is electrolysis based on solar and wind (graph, click to enlarge).
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Sustainable use of fossil fuels. Use of hydrogen for electricity production from fossil fuels in large centralized plants will contribute to achieving a significant reduction of CO2 emissions if combined with CO2 capture and storage processes.

Note, the report did not take into account the realistic option of coupling carbon capture and storage (CCS) to biomass; bio-hydrogen is a decarbonised energy carrier and when made from biomass the CO2 of which is sequestered, it would become a carbon-negative biofuel that takes CO2 out of the atmosphere (previous post).

Contribution to targets for renewable energy and energy savings. The introduction of hydrogen into the energy system offers the opportunity to increase the share of renewable energy. Hydrogen could also act as a temporary energy storage option and might thus facilitate the large-scale introduction of intermittent resources such as wind energy. Further research is needed to quantify the relevance of this function taking into account national and regional aspects. Hydrogen produced from biomass allows for substantial efficiency gains compared to biofuels (and conventional fuels) when used in fuel cell and hybrid vehicles, thus contributing to energy conservation goals. The efficiency gain over biofuels is specifically important since the potential for biomass is limited and strong competition for potentially more attractive uses exists (e.g. power sector, feedstocks/synthetic materials). However, even after taking these constraints into account, biohydrogen is still seen as providing the largest contribution of all renewables.

Impact on economic growth and employment. The transition to hydrogen offers an economic opportunity if Europe is able to strengthen its position as a car manufacturer and energy equipment manufacturer. Substantial shifts in employment are observed between sectors, highlighting the need for education and training programmes. The shift to the production of dedicated propulsion systems will contribute to maintaining high skilled labour in Europe rather than outsourcing these to countries where labour costs are low. Assuming that the import/export shares of vehicles in Europe remain the same, the overall impact on economic growth will be slightly positive (around +0.01% per year). This situation changes considerably if Europe is not able to maintain its position as major car manufacturer in which case there will be a substantial negative impact on welfare in Europe. The major benefit for economic growth is a strong decrease in vulnerability of the economy to shocks and structural high oil prices. Studies from the IEA and European Central Bank, for example, indicate that the (temporary) impact on GDP growth of prices shocks or structural high oil prices amounts to -0.2% to -0.4% of GDP growth.

End-use applications. In the time frame until 2050, the main markets for hydrogen end-use applications are passenger transport, light duty vehicles and city busses. About half of the transport sector is expected to make a fuel shift towards hydrogen. Heavy duty transport (trucks) and long distance coaches are expected to switch to alternative fuels (e.g. biofuels). The penetration of hydrogen in the residential and tertiary sector is expected to be limited to remote areas and specific niches where a hydrogen infrastructure is already present.

Cost of end-use applications and infrastructure build-up. The costs per kilometre driven for mass-produced cars are comparable to conventional vehicles, provided that the necessary cost reductions are obtained. A substantial period of time is needed before the initial investments are paid back. Total cumulative investments for infrastructure build-up amount to about € 60 billion for the period up to 2030. This is only about 1% of the societal costs for meeting the 450 ppm CO2 target in Europe.

The HyWays project brings together industry, research institutes and government agencies from ten European countries. Following a series of more than 50 workshops the project has produced a Roadmap to analyse the potential impacts on the EU economy, society and environment of the large-scale introduction of hydrogen in the short- and long- term, as well as an action plan detailing what needs to be done for this to take place. The HyWays project's roadmap is based on country-specific analysis of the situation in Finland, France, Germany, Greece, Italy, Netherlands, Norway, Poland, Spain and the United Kingdom, together with an action plan detailing the steps necessary to move towards greater use of hydrogen.

Hydrogen is one of the most realistic options for environmental and economic sustainability in the transport sector, in particular passenger transport, light duty vehicles and city buses. However, its introduction requires gradual changes throughout the entire energy system and thus careful planning at this early stage. The transitional period offers Europe the opportunity to take the lead in developing hydrogen and fuel cell technology and its applications in transport and energy supply. The challenges are high and the right steps have to be taken quickly if Europe is not to count the cost of late market entry.

Competitiveness ministers of the 27 Member States are expected to discuss and give the green light to a European Commission proposal for a public/private research partnership ("Joint Technology Initiative") to develop Fuel Cell and Hydrogen technology. This industry-led integrated programme of research, technology development and demonstration activities will receive € 470 million of funding from the EU's research programme over the next six years, an amount to be matched by the private sector. At the same meeting, ministers will discuss the Strategic Energy Technology Plan, which mentions this initiative as an example for future European actions to develop new energy technologies.

References:
European Commission: HyWays: European Hydrogen Energy Roadmap [*.pdf]- February 2008.

The Action Plan, the Member States’ Vision Report, an executive summary, the Roadmap and various background reports are available for download at the HyWays dedicated website.

European Hydrogen and Fuel Cell Technology Platform: Joint Technological Initiative for Fuel Cell and Hydrogen.

EU: European research shows that hydrogen energy could reduce oil consumption in road transport by 40% by 2050 - February 25, 2008.