COMMENT: European countries plan hydrogen import infrastructure to achieve climate goals

In light of global warming, extinction of resources, natural disasters and frequent heated debates on climate action in the West, hydrogen is the hope for achieving ambitious climate goals. Whether used in fuel cells to power vehicles, as a feedstock in industrial processes or as an energy carrier to store and transport renewable energy, hydrogen offers solutions to decarbonise hard-to-abate sectors. 

Indeed, hydrogen as an energy carrier has properties that are important for a reliable energy system, such as easy transport and storage capability. Moreover, hydrogen can replace fossil fuels to drastically reduce emissions in industries such as steelmaking and chemicals, where electrification is difficult. 

Consequently, given the huge potential of hydrogen in energy transition, many European countries are keen on exploring ways of importing it. 

New hydrogen corridor 

On November 7, Greece's leading gas transmission system operator, DESFA, announced that it is in talks with Bulgaria, Czechia, Hungary, Romania and Slovenia on establishing a new hydrogen corridor to Germany, though the plan is still at an early stage. The successful hydrogen export to Germany and other countries requires all involved parties to invest significantly and upgrade their energy network to transport sufficient hydrogen. 

In her recent interview on November 30, Teodora Georgieva, ICGB executive officer, highlighted the plans of transporting hydrogen via the Interconnector Greece-Bulgaria pipeline, referring to recent preliminary studies. According to feasibility studies, the ICGB pipeline is able to transport small amounts of hydrogen mixed with natural gas, although higher levels would require targeted infrastructure investments. Overall, the pipeline’s capacity is up to 3bn cubic metres (bcm) per year, but technical characteristics allow it to increase its capacity to 5 bcm per year. 

In the case of ICGB, Greece and Bulgaria’s hydrogen export partnership should come as little surprise. Both countries first proposed two ambitious projects for hydrogen transfer to the EU in 2023, with the ultimate goal of becoming new transit hubs. The first project envisages the upgrade of respective natural gas networks to accommodate renewable gases, with a budget of €100mn and a completion date of 2026-2027. The second one envisages the building of a new cross-border infrastructure costing €1bn.

New strategies 

The talks between the Southeast and Central European countries were announced as many countries are adopting new strategies to reduce greenhouse gas emissions and replace fossil fuels with renewable energy sources as the most ambitious scenarios assume a global demand for fossil fuels reduction of up to 75% by 2050 compared to 2020. As such, in 2022, the European Union (EU) adopted a hydrogen power strategy (REPowerEU plan), aiming to produce 10mn tonnes of hydrogen by the electrolysis of water powered by renewable electricity and importing 10mn tonnes of hydrogen by 2030. 

In this regard, Germany, the largest EU economy, appeared to become a front-runner in hydrogen imports by reaching out to partners beyond Europe, namely Kazakhstan. For example, In November 2022, the EU and Kazakhstan signed a strategic partnership on green hydrogen and critical raw materials, and in March 2023, Germany opened a Hydrogen Diplomacy Office in Astana.

Undoubtedly, European countries' interest and initiatives in this field aim to establish a cross-border hydrogen network across Europe. Hydrogen is expected to contribute to long-duration energy storage, helping to stabilise power grids during periods of low wind and solar generation when battery storage and other flexible energy sources are depleted. 

The aforesaid strategy on hydrogen, in light of attempts at rapid decarbonisation and establishing a new corridor, is positioning the EU as a global leader in clean energy technology. However, the road to a hydrogen-powered future is paved with challenges, requiring robust policy support, technological innovation, and unprecedented levels of investment.

In addition, the potential of hydrogen to become one of the primary energy sources in the near future prompted countries like Kazakhstan (via Svevind company), Greece (via DESFA), Germany and Bulgaria (via Hydrogen Transmission System) to embark on a new field within the comprehensive green strategy. 

Strategic partnerships

Furthermore, more countries are forming strategic partnerships to facilitate hydrogen trade. For example, Saudi Arabia views Italy as a key partner in delivering green hydrogen to Europe, aiming to leverage Italy's infrastructure to access European markets, while Italy, Germany and Austria signed a separate agreement in May 2024 to develop a hydrogen transport network from the southern Mediterranean to northern Europe, enhancing the continent's import capabilities.

Nonetheless, cost competitiveness remains a significant barrier for engaged countries as green hydrogen is currently more expensive than grey hydrogen produced from fossil fuels, largely due to the high costs of renewable electricity and electrolyses. 

The future of hydrogen exports is promising, with substantial growth anticipated by 2050. However, realising this potential requires overcoming significant infrastructure, cost and policy challenges.

Fuad Shahbazov is a policy analyst covering regional security issues in the South Caucasus. He was a research fellow at the Center for Strategic Studies and previously a senior analyst at the Center for Strategic Communications, both in Azerbaijan. He was also a visiting scholar at the Daniel Morgan School of National Security in Washington, DC. He tweets at @fuadshahbazov.