Dr. Werner Hoyer, President of the European Investment Bank, gave opening remarks on the acceleration of hydrogen deployment at the Hydrogen Europe Lighthouse Initiative event on 30 March 2022.
Check against delivery
Dear Jorgo and Hydrogen Europe members,
Dear project promoters,
Dear fellow investors,
Dear colleagues,
Ladies and gentlemen,
It is my pleasure to join you today to talk about opportunities and challenges in the hydrogen sector, and in particular the development of the important Lighthouse projects that are the focus of today’s discussions.
As I address you today, I am mindful of the current horrific aggression against Ukraine and its many repercussions—including for the energy sector.
But first, for a minute, I invite you to consider what only a few weeks ago we considered the number one challenge of our century: addressing climate change.
Just a month ago (it was on Feb 28, in fact), the Intergovernmental Panel on Climate Change released its starkest warning yet, in its latest report on climate change. The IPCC said:
- “climate change is a grave and mounting threat to our wellbeing and a healthy planet”,
- “the world faces unavoidable climate hazards over the next two decades”
- and exceeding our 1.5° Celsius warming targets will result in “additional severe impacts, some of which will be irreversible”, even if we only exceed those warming targets temporarily.
This unprecedented global challenge requires unprecedented global action.
At the European Investment Bank, the EU Climate Bank, we will do whatever it takes to play our part.
We have committed to mobilise 1 trillion euros of capital for climate action and environmentally sustainable investments in the critical decade ahead… We are determined to deliver on this commitment … together with you…project promoters and investors in the hydrogen sector.
Hydrogen – I may be preaching to the choir here – is certainly one of the technologies with the greatest potential to reduce carbon emissions in the coming years.
Of course, we all know that hydrogen has physical drawbacks such as conversion losses and difficulties in handling the gas…
…but it also has significant advantages, most importantly, its very high energy content.
Hydrogen has almost three times the energy density of gasoline. This makes it a very attractive source of energy for many hard-to-abate sectors – such as steel, cement or chemicals, heavy transport or aviation…
… and also for storing energy to facilitate the further integration of renewables in the energy mix.
The potential of hydrogen to reduce carbon emissions in hard-to-abate sectors is difficult to overstate.
Now let us come back to today’s reality. As we have realised, most painfully, in the last few weeks, Europe is under threat from Russia’s war in Ukraine. Its implications for energy costs impact us all, citizens and businesses. This has reminded us how important energy independence really is.
In this tragic context, the European Commission launched on March 8 the “REPowerEU” proposals to mitigate the impact of rising energy prices, to diversify European gas supply… and to accelerate the clean energy transition.
As European Commission President Ursula von der Leyen said a few days ago: “We simply cannot rely on a supplier who explicitly threatens us.”
The hard truth is that Europe does, indeed, need to accelerate its switch to renewable energy as soon as possible. Renewable hydrogen can play a critical role in accelerating this energy transition.
In other words, everything that hydrogen does for our climate in the long-term, it will also do for our energy independence in a much shorter time frame.
Indeed, one of the many things hydrogen can also do is act as a substitute for natural gas in its core applications of power generation and heating – albeit at a cost which needs to be considered carefully.
In theory, a portion of hydrogen could be blended in the existing natural gas grid to fuel these applications.
This means that if plentiful, low-cost renewable hydrogen were available today, it could already help alleviate the supply concerns that have pushed gas prices to their current highs.
Therefore, I am fully supportive of the Commission’s “REPowerEU” proposals, where the role of renewable hydrogen is further reinforced.
Under these plans, the targets for hydrogen volumes have almost quadrupled to 20 million tonnes by 2030, implying more imports, but also more production in Europe.
The proposals also address critical enablers for hydrogen’s long-term development: to establish a regulatory framework that will promote a European market for hydrogen and support the development of an integrated gas and hydrogen infrastructure.
Our leaders have taken note of hydrogen’s strategic importance. And the Versailles declaration issued on March 11 stressed again the intention of further developing a hydrogen market for Europe.
With climate and geopolitical forces at work, the urgency of developing hydrogen as a technology and support for this have never been stronger.
Now comes the time for us all, sector players and financiers, to turn this vision into reality.
At the European Investment Bank, we have in the past decade extended over 550 million euros in loans directly linked to hydrogen projects. This has helped finance over 1.2 billion euros in overall hydrogen investments.
These projects include research & innovation loans to companies researching fuel cells or hydrogen industrial applications…
… financing for deployment of hydrogen in the mobility sector through hydrogen-powered trains or networks of refuelling stations…
… and more recently, a solar power facility where hydrogen is integrated as an energy storage solution.
We are also beginning to see more and more large-scale and industrial deployment projects…
My view is that these large and ambitious projects spanning multiple elements of the value chain are the next critical building block in the development of a European hydrogen market.
Let me speak to you, in particular. You, who are developing these Lighthouse projects.
Your projects have a crucial role to play in demonstrating the viability of hydrogen at scale and in industrial contexts.
Deploying these projects can eventually move the needle towards lower costs and broader adoption of hydrogen.
By signalling that hydrogen works on a large scale, these projects also promote much needed economies of scale throughout the value chain …
… for example, through larger electrolyser manufacturing capacities – from which the entire market will then benefit.
For all these reasons, we at the European Investment Bank want to hear more about your hydrogen project plans and how we can support you.
There cannot be a better time to explore opportunities with the EIB. We have just finalised a brand new set of financing and advisory instruments under our InvestEU agreement with the European Commission, which my colleague Jean-Christophe Laloux, Head of EU Lending and Advisory, will talk to you about later today.
With this new mandate will come new financing instruments and renewed capacity and appetite… to support hydrogen projects and to contribute to the energy transition.
Today, thanks to our advisory agreement with Hydrogen Europe, we stand ready to explore every opportunity to accelerate or unblock your Lighthouse projects
We look forward to extending our support to you.
Ladies and gentlemen,
To address our grand climate challenge and improve our energy independence, we must ensure the deployment of hydrogen across Europe.
There is no doubt that challenges remain to be addressed, but momentum has clearly never been higher.
I have no doubt that in the end, we will get there. Just as we did for other energy technologies like wind and solar in the not-so-distant past.
We need to believe in ourselves…our ability to get the job done. We have so much to gain from being successful. And I believe we must remain optimistic.
At the European Investment Bank, the EU climate bank, we stand ready to walk the talk together with you… just as we did for so many other key technologies.
We intend to do everything we can to help you access our financing solutions, where appropriate through our advisory services.
Thank you very much to Hydrogen Europe and all of you for having me.
I wish you all productive discussions for the rest of the day and look forward to a closer dialogue with the Lighthouse projects presented today.
Thank you.