The lights and shadows of large green hydrogen projects

Some time ago, we discussed in a post the contribution that green hydrogen can make to energy transformation, which faces significant challenges such as the need to reconcile growing global energy demand with existing decarbonization goals for environmental sustainability.

Furthermore, the current international tensions have not only strained energy supply chains but also highlighted the value of concepts like energy sovereignty and self-sufficiency, especially in regions like the European Union, which cannot meet their energy needs alone and are therefore bound to an interdependence with profound implications at multiple levels.

In this context, green hydrogen (GH2) has emerged as a very promising solution due to its energy potential and qualities such as lightness, compression, ease of transport, and storage.

Although, as we know, it is not an energy source itself but an energy vector—meaning a medium that allows energy produced by other primary sources to be stored.

Specifically, GH2 is generated through water electrolysis, a process that separates hydrogen and oxygen. While electricity is required for this process, it can come from renewable sources, which means it would not involve CO2 emissions, although this is a slightly more complex issue, as we will see later.

The H2Med Project

The need to move toward decarbonization and current international political circumstances have placed green hydrogen and its advantages at the forefront, explaining why major initiatives like H2Med, driven by Spain, France, and Portugal, with Germany joining later, have already been put on the table.

This is an authentic large-scale megaproject that envisions the development of two extensive hydrogen pipelines: one, 248 kilometers long, will connect Celorico da Beira in Portugal to Zamora in Spain by adapting and expanding an existing gas pipeline, while the other—posing a greater challenge—will connect Barcelona and Marseille, requiring the construction of a 450-kilometer submarine pipeline with sections more than 2,500 meters deep.

The megaproject will require a colossal investment estimated at 2.85 billion euros to launch, with the majority, around 2.5 billion euros, allocated to the submarine pipeline between Spain and France.

However, the sponsoring countries hope to receive European funds to finance up to 50% of the project investment, which is generally well-regarded by Brussels, as it aligns with two key pillars of current EU policy: energy transformation and the shift toward a self-sufficiency model under the Repower EU plan.

It should be noted that bringing this project to fruition has not been easy, beyond its substantial investment costs. Following an initial dilemma over whether to use it also for natural gas transport (something that would have jeopardized Brussels’ financial support earmarked for the energy transition), the main point of contention was whether to accept nuclear-derived hydrogen, known as pink hydrogen, as the French president Macron proposed. Pink hydrogen differs from green hydrogen in that it is produced using nuclear rather than renewable energy.

From the French perspective, this approach made perfect sense given the country’s longstanding investment in nuclear energy (with 58 reactors, it has one of the highest numbers globally). This policy has provided France with a more self-sufficient energy supply than its neighbors, at an affordable cost, using a source that, disregarding waste issues, can be considered clean, though with obvious dangers, as we discussed in our post on nuclear energy’s dilemmas.

H2Med Expected to be Operational by 2030

The green hydrogen corridor is expected to be operational by 2030 and to cover 10% of Europe’s hydrogen demand, estimated at around two million tons annually.

According to statements by European Commission President Ursula von der Leyen, the overall European goal for the next decade is to reach a production of ten million tons of green hydrogen, supplemented by another ten million tons of imported hydrogen. Achieving this will require key corridors for its transport and distribution, including H2Med, practically securing the project’s designation as a Project of Common Interest, and hence financing.

Other Green Hydrogen Projects

This will not be Spain’s only green hydrogen corridor project, as the private company Cepsa plans to establish a route between Algeciras and the port of Rotterdam in the Netherlands—the largest port in Europe, which also aims to become a true hub for green energy.

The agreement between Cepsa and the Dutch port authority outlines that the maritime corridor (in this case, using ships rather than a submarine pipeline) will be operational by 2027, allowing hydrogen produced in Cepsa’s Energy Park in the Bay of Algeciras to be exported.

The high-level support these green hydrogen projects are receiving, demonstrated by the endorsement from the Kings of Spain and the Netherlands during a June 14 visit to Algeciras, illustrates their importance.

Beyond Europe, Uruguay is also planning an ambitious green hydrogen project with strong investments in generation, including an industry in Paysandú set to produce green hydrogen starting in 2024. The estimated investment, around 3.71 billion euros, is notable for a country with less than 3.5 million inhabitants but aligns with Uruguay’s strong renewable energy focus over the years. In fact, by 2019, 98% of its energy mix came from clean sources.

Objections to Green Hydrogen Megaprojects

Despite the significant contributions projects like H2Med can make to decarbonization and energy sovereignty goals, some experts question their high cost, the environmental impact of building a marine pipeline, and the overall viability of green hydrogen as an energy solution.

These experts also argue that the projected transport of two million tons by 2030 seems unrealistic, given that Spain currently produces only a few dozen tons per year, with the 2020 Hydrogen Roadmap initially aiming for just over 100,000 tons by the early 2030s.

Moreover, although green hydrogen transport may be technically viable and profitable, local production and consumption would always be more efficient and cost-effective.

Others suggest that green hydrogen production should be channeled toward replacing fossil-based hydrogen (known as black, brown, or gray, depending on the specific fossil fuel source), which is currently used in various sectors, prioritizing their decarbonization. Industries like oil refining or petrochemicals, which already have adaptable infrastructures, would thus not require significant new investments, which may have uncertain profitability.

ALEJANDRO BETANCOURT