CETO released the 2023 Annual Report on the Development, Trends, Value Chain and Market Status of EU Electrolysis of Water and Hydrogen Technologies

 Report from our correspondent at the end of 2023, The European Union Clean Energy Technology Observatory (CETO) released the 2023 Annual Report on the Development, Trends, Value Chain and Market Status of Electrolytic Water and Hydrogen Technologies (Water Electrolysis and Hydrogen in the European Union-2023 Status Report on Technology Development, Trends, Value Chains and Markets; The Report), This paper briefly analyzes the development status, trend, downstream application demand and possible challenges of related markets in the EU.

 According to the report, electrolysis of water hydrogen is still the most mature, most promising from the carbon source green hydrogen technology, mainly including alkaline electrolysis, proton exchange membrane electrolysis (PEM), high temperature solid oxide electrolysis (SOEC), anion exchange membrane electrolysis (AEM) and proton conductive ceramic electrolysis (PCC) five main technology. Among them, alkaline electrolysis and proton exchange membrane electrolysis are relatively mature, high-temperature solid oxide electrolysis and anion exchange membrane electrolysis are developing slowly, and proton conductive ceramic electrolysis is in an earlier development stage. At present, the European Union mainly adopts "thermal" production methods, hydrogen production by chemical by-products, carbon capture reforming, and water electrolysis for hydrogen production. Among them, the hydrogen production capacity produced by the "thermal" production method accounted for about 95.8%, chemical by-products electrolysis hydrogen production capacity accounted for about 3.6%, carbon capture reforming hydrogen production capacity accounted for about 0.5%, and water electrolysis hydrogen production capacity accounted for about 0.2%.

 According to the European Hydrogen Energy Organization (Hydrogen Europe) forecast, the global installed capacity of electrolytic hydrogen production will reach 2 gigawatts in 2023. Of this, Europe will have an installed capacity of 191 MW to 500 MW; the US is expected to reach 291 MW; China will have the largest production capacity, at least half of the world, about 1.1 GW.

According to the report, in the European Union, about 50.5% of hydrogen is used as chemical raw material for refining, 29.5% for the production of ammonia, 4.3% for the synthesis of methanol, 7.3% for other chemical synthesis, 4.7% for other industries, including food processing, glass manufacturing or power generation cooling, 3.7% for energy production, and 0.001% for the transportation industry.

 The report predicts that eu green hydrogen demand will reach 54 million tons per year by 2030, and will reach 61 million tons per year if projects without disclosed operating dates are included. This requires the EU to increase the supply of about 600,000 to 750,000 tonnes of green hydrogen annually from 2023 to meet the construction needs of related projects. In addition, Germany will be the leading demand country for green hydrogen in Europe in the future, accounting for 38% of the region's total hydrogen demand (53% of that demand is expected to come from the country's steel industry).

 The EU aims in its "REPowerEU" energy plan and the Hydrogen Strategy (The Hydrogen Strategy) to produce 10 million tons of green hydrogen and import 10 million tons of green hydrogen by 2030. According to the report, if 10 million tons of green hydrogen produced by the EU are fully produced by water lysis, the local hydrogen production industry is expected to install 140 gigawatts of electrolytic cells by 2030. The production of electrolytic cell requires more than 40 kinds of raw materials and more than 60 kinds of processing materials. The EU is heavily dependent on imports for raw materials, but its global share of processed materials and components is growing.

According to the report, although the EU's green hydrogen production has now increased compared with 2022, the global production of green hydrogen is still small. At the same time, the standardized certification method of green hydrogen at the international level has not achieved obvious results. The production cost of green hydrogen is highly dependent on the change of electricity price. With the decline of natural gas costs from the peak in 2022, compared with fossil fuel production, the competitiveness of green hydrogen production will be greatly reduced. In addition, the manufacturing capacity of electrolytic cells will accelerate globally, but it will not meet the market demand for electrolytic cell deployment. According to the report, the deployment of sufficient renewable power to supply electrolytic cells may be a major challenge for the EU to meet its strategic green hydrogen production targets.