Europe has great decarbonisation potential with renewable gases and hydrogen. But unless strong regulatory measures are put in place, these won’t have sufficient access to the market, thereby putting the EU’s decarbonisation objectives at risk.
That’s according to experts from the Centre on Regulation in Europe (CERRE) in a newly published report which explores the economic outlook for renewable gases and hydrogen.
Looking at the market potential of biomethane and hydrogen in the EU, the study highlights that the current production cost for both ranges from two to five times the current price of natural gas in the wholesale market.
“Despite massive production potential in Europe, it is very unlikely that renewable gases and hydrogen will properly work their way through the market unless adequate support is put in place,” explain the authors of the study.
“If European policy makers want to make the best use of the decarbonisation potential brought by hydrogen and renewable gases, they must think beyond EU targets and introduce cost-effective support schemes, increase their access to the grid, reinforce the transparency and interoperability of Guarantees of Origin and measure the impact of these policies over time.”
The study highlighted four key objectives that Europe needs to work on in order to persue the potential of biomethane and hydrogen:
1. Set EU targets for biomethane by 2030 and 2050 and review them by 2028
2. Guarantee the traceability of renewable gases via a certification system
3. Facilitate access to the gas infrastructure for renewable gases producers
4. Introduce support schemes to level the playing-field
“The study shows the there is much more to be done than just setting targets for renewable gases and hydrogen. It is also about how we will redefine the potential integration and coupling between gas, electricity and other sectors in Europe in the next decades,” said Máximo Miccinilli, CERRE’s Director for Energy.