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Developing renewable technologies to decarbonize electricity has been "relatively straightforward," but decarbonizing energy-intensive industries, replacing natural gas to generate heat and reinventing CO2-intensive industries to reduce CO2 has not. However, with Europe's goal of being climate neutral by 2050, energy-intensive industrial processes are poised for a change.

Of course, green hydrogen is not the only solution for industrial decarbonization, but it is a means and a strong catalyst for change. It has the advantage of coupling to a continuously decarbonizing electricity system and, by targeting energy- or CO2-intensive industries first, such as steel, cement and fertilizer, it can have a large impact in a relatively short period. In fact, steel is responsible for eight percent of global carbon dioxide emissions, while cement accounts for seven percent of the total share.

Value chain growth
Several value chains already exist in Europe thanks to the production of gray hydrogen and the growing interest in blue hydrogen projects. However, organically building the existing value chain to produce green hydrogen would take years. Knowing that we don't have that time, last year, EIT InnoEnergy partnered with Breakthrough Energy to launch the European Green Hydrogen Acceleration Center (EGHAC), an initiative to kick-start large industrial projects commercializing green hydrogen on a large scale. The EGHAC acts as an open platform, bringing together stakeholders from across the value chain.

The main objective of the Center is to create a portfolio of projects, which requires collaboration between the different value chains. If you consider a green hydrogen project in isolation, the commercial aspect is not particularly attractive, but in the context of how the surrounding value chain develops, and what the end customer is willing to pay for the final product, the numbers start to come out.

Common interests
The first to show interest in this initiative have been those in the European automotive industry. As society has become increasingly climate-conscious, manufacturers of all kinds of products are under pressure to reduce the carbon footprint of their products. While the first thing that comes to mind is electric vehicles, this pressure is also strengthening the case for environmentally friendly steel for use in automotive chassis and components. If a car manufacturer were to add the cost of switching to green steel from factory production, the increase would be marginal: about €100; a negligible increase in the cost of a €30,000 car. Although not much research has been done on consumer opinion on this point, it seems plausible to assume that most consumers would accept it.

If the cost of producing green hydrogen on an industrial scale can be, in part, recovered or shared across the value chain, then the commercial proposition will be much more competitive. The concept is the same for fertilizer production with green hydrogen: a consumer will not notice a fraction of a cent/kg increase in the price of tomatoes, but that fraction makes all the difference when scaled up the value chain.

Common objectives
This does not imply that all costs should fall on the consumer, but we should consider the mutual interest that each part of the value chain has in decarbonizing with green hydrogen. If we only think about green hydrogen business model transactions and continue to focus on the price of green hydrogen in isolation, it will stand still for several years, perhaps until carbon taxes force the industry to act. However, if we bring stakeholders together to move forward by collaborating with each other, we can accelerate change.

An example for others
The H2 Green Steel initiative, which is expected to start operating in 2024, is seen as Europe's flagship project: if we can achieve this with steel, we will have a strong model to adapt and apply in other sectors provided sufficient renewable energy is available. In fact, other materials such as cement are also in the spotlight, along with the decarbonization of chemicals, heavy transport, aviation and shipping. And other sectors of the energy industry are also taking note; green hydrogen presents significant potential for use as storage. Hydrogen can be produced using excess renewable generation, stored, and converted back into electricity when the system requires flexibility due to low renewable production: a whole-system approach.

Decarbonization is a critical puzzle that Europe must solve to achieve its climate neutrality goals. At the same time, the momentum for green hydrogen is growing and puts it at the forefront of helping Europe achieve its ambitions. A strong and competitive market is the key, and for this we need input from across the value chain to build the business case once and for all.