Challenges ans prospects

There is a momentum behind the growth of the hydrogen sector such as has never been seen before. Against the backdrop of the struggle to counter climate change and to kick-start the economy in a post-Covid world, France has positioned itself at the front of the pack in both European and global terms with the 2020 launch of a National Hydrogen Strategy aiming to speed up the production of decarbonized hydrogen.

All over the world, hydrogen is becoming a strategically important energy carrier which can make a key contribution to a successful energy transition thanks to the convergence of four key factors :

The climate challenge. Following the 2015 Paris Agreement and a number of alarming reports from the IPCC, the struggle to combat climate change absolutely has to become a priority if we are to keep global temperature rises to a maximum of 2° Celsius between now and the turn of the century. With this objective in mind, France aims to achieve net zero carbon dioxide emissions by 2050 and should reduce its Greenhouse gas emissions by 55% by 2030 (in comparison with 1990 levels). The end objective is clearly defined but the pace of change required will be challenging: at least a 3 to 3.3% reduction in emissions each year will be needed to hit the target. This will only be possible with the help of ambitious, well thought-out climate policies with a combined focus on energy efficiency, eco-sufficiency and technological innovation. The International Energy Agency (IEA) estimates that almost one half of the reduction in emissions we must achieve will need to come through technological advances which are currently only at the demonstration or prototype stage. Amongst these advances, low-carbon and renewable hydrogen have been identified by the IEA as a useful way of decarbonizing the industrial sector (refineries, fertilizer and chemicals production, steel-making) and heavy transportation methods (road, rail, maritime, air).

The energy challenge. No solution should be ruled out on the road to net zero. This objective will be achieved through having a diverse energy mix. Renewable energy sources, including hydroelectricity, as well as nuclear power, must be harnessed in order to replace the fossil energy sources which still represented about 47% of our primary energy consumption in 2020. It is crucial that we transition away from coal, oil and then natural gas. To reduce our dependence on these fuels, direct electrification should be encouraged wherever feasible. However, by 2050, electricity will only account for 50 to 60% of final energy consumption. Other decarbonized approaches will have to make up the difference, such as natural gas and renewable and low-carbon hydrogen. The 880,000 tonnes of fossil fuel-based hydrogen currently used in France each year in refineries, the production of fertilizers and chemical products can now be decarbonized through new production methods. Moreover, new hydrogen-based approaches should be encouraged in the steel-making industry and heavy transportation sector, fields which are difficult to decarbonize and where electrification cannot play a major role. Decarbonized hydrogen could amount to 13 to 14% of final energy consumption by 2050 and even up to 20 to 22% in the most ambitious scenarios. Hydrogen alone is not capable of achieving the energy transition, but the energy transition will not happen without hydrogen.

The technological challenge. Hydrogen-related technologies have progressed in leaps and bounds in recent years in terms of energy efficiency and reductions in the quantity of raw materials used. Fuel cell costs have dropped by 70% since 2008. They are at the stage where their use can be considered in new fields such as maritime or air transport. The Alternative Energies and Atomic Energy Commission (CEA) is now one of the principal patent filers in this area. France already has numerous leading industrial players at every stage of the Hydrogen value chain from production to transportation, storage, distribution and applications in industry and transportation. Taken together, this means that the country is very well-placed to take a leading role in an international competition that has already begun. Electrolyzers and fuel cells are now in the realm of mature technology and are ready for widespread use.

The economic challenge. With the cost of producing electricity from renewables having significantly dropped, renewable hydrogen is closing in on fossil fuel energy in terms of cost-competitiveness and it is possible the gap will be closed entirely by 2030. Worldwide, the cost of solar electricity dropped by an average of 90% between 2009 and 2019. Wind-generated electricity costs have dropped by 70% over the same period. However, hydrogen-related technologies remain costly. As was the case with solar panels and wind turbines, the only way to create economies of scale that are large enough to deliver huge reductions in production costs is through a massive scaling up of these technologies through major investment by both the state and the private sector.  France needs to embark on a comprehensive programme of investment in order to develop a large-scale, locally-based hydrogen sector.