BrazilEC taps Guidehouse and Frontier Economics for hydrogen study
The European Commission has hired Guidehouse and Frontier Economics to support policy makers with the design of a regulatory framework for hydrogen.
Against the backdrop of the Paris Agreement, the European Union has set a target to become climate neutral by 2050. Realising this ambitious target will be an uphill challenge – at the current progress of decarbonisation, member states are set to miss out on the target.
Delivering on the ambition will require a major transition to renewable energy, while in hard-to-abate industries such as petrochemicals, cement, steel, trucking, airlines, and shipping (sectors for which non-fossil alternatives struggle to meet energy requirements) low-carbon hydrogen will be required to drive decarbonisation. In addition, hydrogen is important as it enables large-scale storage of energy.
According to the EC’s roadmap, by 2030 at least 40 GW of electrolyser capacity should be in place to produce green hydrogen (and blue hydrogen). Hydrogen is a very light gas produced from electrolysis, in which water (H2O) is split into hydrogen (H2) and oxygen (O2). If this process is powered by renewable energy, then hydrogen is known as green hydrogen as opposed to for example grey hydrogen.
Effectively scaling-up hydrogen production – the globe’s top producers are currently outside of Europe: Australia, Morocco, Chile, Saudi Arabia, China and Japan – will require a strong governance framework and supporting infrastructure, providing clarity to market players and investors, and facilitating an effective value chain.
Meanwhile, as hydrogen is highly flammable, it is important to handle it with care during production, transport and use, and to ensure that parties involved comply with stringent safety requirements.
Working together with Guidehouse (a US consultancy with a strong track record in the energy sector) and Frontier Economics (one of UK’s leading strategic and economic consulting firms), the EC is assessing potential policy options designed to stimulate and regulate the future European hydrogen market.
Planned for delivery in the third quarter of 2021, the study will be used by the European Commission as input to the creation of an impact assessment that will accompany its legislative proposal expected in the fourth quarter.
Commenting on the project, Daan Peters, a director in Guidehouse’s Energy, Sustainability, and Infrastructure practice said: “Introducing regulation for hydrogen requires a robust impact assessment. Regulating too much too early could stifle this nascent market while a lack of regulation could hinder the rollout out of an efficient, functioning market in the long-run.”
In related projects, last year the world’s largest green hydrogen project in Denmark called in Boston Consulting Group and COWI for support.
