EUROPEAN HYDROGEN BACKBONE Analysing future …

1 JUNE 2021. EUROPEAN HYDROGEN BACKBONE . Analysing future demand, supply, and transport of HYDROGEN A cooperation with Creos, DESFA, Elering, Enag s, Energinet, Eustream, FGSZ, Fluxys Belgium, Gas Connect Austria, Gasgrid Finland, Gasunie, Gaz-System, Gas Networks Ireland, GRTgaz, National Grid, NET4 GAS, Nordion Energi, OGE, ONTRAS, Plinovodi, Snam, TAG, Ter ga Imprint Supported by: Date: Guidehouse June 2021. Contact: Picture credits: Guidehouse Title motif based on a map of ENTSOG. Stadsplateau 15, 3521 AZ Utrecht (see ). Authors: The Netherlands Anthony Wang, Jaro Jens, David Mavins, +31 30 662 3300 Design: Marissa Moultak, Matthias Schimmel, Kees van Meike Naumann Visuelle Kommunikation der Leun, Daan Peters, Maud Buseman Analysing future DEMAND, SUPPLY, AND TRANSPORT OF HYDROGEN .

2 2. Table of contents Unit conversions 4 4. HYDROGEN Transport 70. List of abbreviations and acronyms 4 Infrastructure HYDROGEN Transport by Pipeline 70. Executive summary 5 HYDROGEN Transport by Ship 74. Comparison of HYDROGEN Transport Methods 76. 1. Introduction 9 and Supply Routes Comparison of Electricity and HYDROGEN 80. Infrastructure 2. HYDROGEN Demand 11 80. Transport cost comparison between Industry 12 pipeline and power line Iron & steel 17 Energy storage, system integration, 82. Ammonia for fertilizers 20 and societal acceptance High value chemicals 23. fuel production 27. Industrial process heat 29 Appendix A.

3 85. Transport 31 HYDROGEN Demand Methodology Road transport 31 Industry 85. Aviation 34 Transport 88. Shipping 36. Power 91. Transport conclusions 37. Buildings 94. Power 38. Buildings 42. Appendix B. 97. Conclusions on HYDROGEN demand 51. HYDROGEN Supply Methodology Green HYDROGEN 97. 3. HYDROGEN Supply 53. Blue HYDROGEN 106. Introduction 54. Green HYDROGEN 54. Renewable energy supply potential 55 Appendix C. 107. Green HYDROGEN supply potential 57 HYDROGEN Transport Green HYDROGEN production costs 59 Infrastructure Methodology Green HYDROGEN and electrolysis in 62 HYDROGEN Transport by Pipeline 107.

4 National HYDROGEN strategies HYDROGEN Transport by Ship 109. Summary 63. Comparison of HYDROGEN Transport 111. Blue HYDROGEN 64. Methods and Supply Routes Imports of green and blue HYDROGEN 67. Comparison of Electricity and HYDROGEN 112. Infrastructure Analysing future DEMAND, SUPPLY, AND TRANSPORT OF HYDROGEN . 3. Unit conversions 1 kg H = m H (0 C, 1 bar). 1 kg H = kWh (LHV). 1 kg H = MJ (LHV). List of abbreviations and acronyms ASHP Air-Source Heat Pump kg Kilogramme ATR Auto Thermal Reformer km Kilometre BECCS Bio Energy Carbon Capture and Sequestration kW Kilowatt BF Blast Furnace kWh Kilowatt-Hour BNEF BloombergNEF LH Liquid HYDROGEN BOF Basic Oxygen Furnace LHV Lower Heating Value CAPEX Capital Cost LNG Liquefied Natural Gas CCS Carbon Capture and Storage LOHC Liquid Organic HYDROGEN Carriers CCU Carbon Capture and Utilisation MENA Middle East and North Africa CCUS Carbon Capture.

5 Utilisation and Storage MGO Marine Gasoil CNG Compressed Natural Gas MtO Methanol to Olefins CO Carbon Dioxide MVA Megavolt-Ampere DAC Direct Air Capture MW Megawatt DR Direct Reduction MWh Megawatt-Hour DRI Direct Reduced Iron NECP National Energy and Climate Plan DSO Distribution System Operator NIMBY Not in My Backyard Scrap-EAF Scrap-Electric Arc Furnace NOx Nitrogen Oxides EC EUROPEAN Commission NUTS Nomenclature of Territorial Units EHB EUROPEAN HYDROGEN BACKBONE OPEX Operating Costs EU ETS EUROPEAN Union Emissions Trading System PCI Pulverised coal injection EUR Euro PV Photovoltaic FCHJU fuel Cells and HYDROGEN Joint Undertakings R&D Research and Development GHG Greenhouse Gas RES Renewable Energy Source GW Gigawatt SAF Sustainable Aviation fuel HBI Hot Briquetted Iron SMR Steam Methane Reforming HP Heat Pump SOx Sulphur Oxides HVAC High Voltage Alternating Current TSO Transmission System Operator HVC High Value Chemicals TWh Terawatt-Hour HVDC High Voltage Direct Current TYNDP Ten-Year Network Development Plan IEA International Energy Agency UK United Kingdom JRC Joint Research Centre VLSFO Very Low Sulphur fuel Oil Analysing future DEMAND, SUPPLY.

6 AND TRANSPORT OF HYDROGEN . 4. HYDROGEN is crucial to Europe's transformation into a climate-neutral continent by mid-century. This study concludes that the EUROPEAN Union (EU) and UK could see a HYDROGEN demand of 2,300 TWh Executive (2,150-2,750 TWh) by 2050. This corresponds to 20-25% of EU. and UK final energy consumption by 2050. Achieving this future summary role of HYDROGEN depends on many factors including market frameworks, legislation, technology readiness and consumer choice. Green and blue HYDROGEN are crucial for our industrial decarbonisation pathway. It is particularly relevant for chemicals (ammonia and high-value chemicals), iron and steel, and fuel production where HYDROGEN is primarily used as feedstock.

7 Green and blue HYDROGEN replaces the current use of grey HYDROGEN in ammonia and fuel production and is a main input for the production of low-carbon fuels used in aviation or as feedstock for the production of high-value chemicals. HYDROGEN -based steel making is considered the main decarbonisation option for primary steel making. About 1,200 TWh of annual HYDROGEN demand in industry can be expected, including just over 200 TWh for medium and high temperature industrial process heat. Around 650 TWh of annual HYDROGEN demand can be expected to be required in dispatchable electricity production.

8 The value of HYDROGEN over most other flexible power options is that it can be supplied and stored in large quantities at relatively cheaper investment costs, making it appealing for longer duration storage. In transport, next to electrification and biofuels, there is a clear role for about 300. TWh per year of HYDROGEN as a fuel . Additional HYDROGEN will be needed to produce HYDROGEN -derived synthetic fuels in aviation.. Heating in buildings will be decarbonised using a range of technologies with significant regional variations. The HYDROGEN demand depends on renovation rates, the relative shares of biomethane and HYDROGEN , and the mix of heating technologies.

9 This study assumes Europe-wide accelerated renovation rates and hybrid heating systems in existing homes with a gas connection and in 30% of district heating. Such hybrid systems use electricity (in a heat pump) and renewable or low-carbon gas. This approach reduces energy system costs, enabling lower cost to consumers and faster emission reduction. As the hybrid heating systems mainly use gas as peak energy supply, gas demand is lower than in gas-only solutions like HYDROGEN boilers and fuel cells considered in other studies. Under this study's assumptions, annual renewable and low-carbon gas demand in buildings will be around 600 TWh in 2050.

10 All of this could be HYDROGEN , yet assuming a scale-up of biomethane as in previous Gas for Climate studies, annual HYDROGEN demand would be around 150 TWh. Domestic EUROPEAN green and blue HYDROGEN supply potential is vast and exceeds what would be needed to meet projected EUROPEAN HYDROGEN demand in all sectors Domestic green HYDROGEN supply potential in the EU and UK from dedicated renewables is estimated to be 450 TWh in 2030, 2,100 TWh in 2040, and 4,000 TWh in 2050. This potential already takes into account the growing need for renewable electricity for direct consumption, land availability, environmental 1 This additional HYDROGEN demand, mainly for synthetic fuels, is included in the industry considerations and installation rates.