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The Hydrogen Hype: Gas Industry Fairy Tale or Climate Horror Story?

By Belén Balanyá, Gaëtane Charlier, Frida Kieninger and Elena Gerebizza - Corporate Europe Observatory, December 2020

Industry’s hydrogen hype machine is in full swing. An analysis of over 200 documents obtained through freedom of information rules reveals an intense and concerted lobbying campaign by the gas industry in the EU. The first goal was convincing the EU to embrace hydrogen as the ‘clean’ fuel of the future. Doing so has secured political, financial, and regulatory support for a hydrogen-based economy. The second task was securing support for hydrogen derived from fossil fuels as well as hydrogen made from renewable electricity. Successful lobbying means the gas industry can look forward to a lucrative future, but this spells grave danger for the climate as well as the communities and ecosystems impacted by fossil fuel extractivism.

Key findings include:

  • The hydrogen lobby, whose main players are fossil gas companies, declared a combined annual expenditure of €58.6 million trying to influence Brussels policy-making, although this is suspected to be a gross underestimate.
  • The hydrogen industry met with European Commissioners Timmermans, Simson, Breton, their cabinets and directors general 163 times on energy topics between December 2019 and September 2020, compared with 37 meetings on energy between high-ranking Commission officials and NGOs.
  • The revolving door has been in full swing: former Deputy Director General for Energy, Klaus-Dieter Borchardt, one of the most influential officials in the Commission around gas and hydrogen, left his post to join law firm Baker McKenzie. He joined former colleague Christopher Jones who was also Deputy Director General for Energy and became a lead member of the Baker McKenzie Hydrogen Team.
  • Public relations firm FTI Consulting – the same company exposed in the USA for creating fake pro-fossil fuel grassroots organisations on behalf of Big Oil and Gas – has been key in creating the hydrogen lobby. It is behind Hydrogen Europe and the Hydrogen Council, the lobby groups most responsible for creating the hydrogen hype.
  • The Commission’s European Hydrogen Strategy, published in July 2020, is worryingly similar to lobby group Hydrogen Europe’s demands, including goals and investments needed for hydrogen both inside and outside the EU, which industry costs at €430 billion by 2030.
  • The European Commission has put the gas industry in the driving seat of many new hydrogen-focused bodies, such as the ‘Clean Hydrogen Alliance’, tasked with drawing up a list of hydrogen projects eligible for public funds. This is a glaring conflict of interest.
  • The hydrogen industry had access to over €1 billion in public funds for its projects between 2014-2020 thanks to the public-private research partnership ‘Fuel Cells and Hydrogen - Joint Undertaking’ between the European Commission and Hydrogen Europe. The partnership has been key in creating the hydrogen hype, as well as ensuring more public funds flow to Hydrogen Europe members in the years to come.
  • Hydrogen projects will now enjoy regulatory and financial support from the EU, as outlined in the European Hydrogen Strategy and the European Commission’s Industrial Strategy, among others, while also being pushed in the upcoming reviews of the Trans-European Networks for Energy (TEN-E) Regulation and the Renewable Energy Directive. Hydrogen-related projects will also enjoy access to new and existing EU funding streams such as the Sustainable Investment Plan, the Recovery and Resilience Facility, the Connecting Europe Facility, and through revised state aid rules as ‘Important Projects of Common European Interest’.
  • Failed ‘carbon capture and storage/usage’ (CCS/U) technology is being resurrected, and is receiving political, financial, and regulatory support so the EU can justify including fossil fuel-based hydrogen in its 2050 climate plans.
  • The EU’s oversized fossil gas network has been rebranded by industry as Europe’s future ‘Hydrogen Backbone’, blending small amounts of hydrogen into existing gas pipelines in the short-term, and repurposing them for hydrogen in the longer-term. The European Commission appears to support industry plans, which would give a green light to companies building and operating fossil gas infrastructure to carry on as before.
  • The ‘Hydrogen Backbone’ is being used by industry and member states to resurrect controversial mega projects like the Franco-Spanish-Portuguese MidCat fossil gas pipeline, which was refused on climate grounds.
  • European member states are also joining the hydrogen hype, with many producing national strategies and substantial funding. Germany has promised €9 billion, with €2 billion to be spent on international projects, while using its EU Presidency to act as a strong gas lobby ally and promote blue hydrogen despite public opposition to fossil fuels.

The EU has jumped aboard the hydrogen hype train and is going full steam ahead, embracing hydrogen as the ‘clean’ fuel of the future and lavishing it with political, financial and regulatory support. Yet today less than 0.1 per cent of hydrogen produced in Europe is from renewable or ‘low carbon’ electricity. While hydrogen is presented as a climate panacea, concerted lobbying by the gas industry has ensured that for the next few crucial decades at least, Europe’s much-hyped ‘hydrogen economy’ will be powered by hydrogen made from polluting fossil fuels rather than from renewable electricity. As for the promised ‘green’ hydrogen, industry and the EU are planning to source half of it from Ukraine and North Africa, continuing the neocolonial relationship that has characterised EU energy policy up to today, extracting resources while leaving behind the political, social, and environmental impacts.

Europe has an opportunity to transform its energy system and wrestle back control from a small cartel of fossil fuel-hungry corporations but appears too afraid or unwilling to break with the status quo. Decision-makers and industry are pushing unproven technologies such as carbon capture and storage or ‘green hydrogen’ which can never be sustainably delivered in the necessary quantities. Instead we need to decarbonise our gas system through a just transition, a planned phase-out of all fossil fuels and their associated infrastructure in line with climate science, while protecting communities and workers over corporate profits.

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