The announcement by the International Energy Association that coal, gas and oil production must stop now to hit the net zero target by 2050 is a stark reminder that setting ambitious targets is the easy part of decarbonising energy.
There is strong appetite for new technologies, collaborations and innovation that will deliver the scale of change required, accelerating opportunities for people with experience and collaborative leadership to bring about change.
This is a key aspect of Carina Krastel’s role as Commercial Director at EIT InnoEnergy’s European Green Hydrogen Acceleration Centre, which she took up earlier this year.
Established in 2010 and supported by the European Institute of Innovation and Technology (EIT), EIT InnoEnergy is the leading engine for innovation and entrepreneurship in sustainable energy across Europe and beyond. It has invested in and provided added value services to some 300 sustainable energy related innovators, including more than 20 across the hydrogen value chain and more than 40 renewable generation projects.
EIT InnoEnergy supports and invests in innovation at every stage of the journey, leveraging its ecosystem of more than 600 partners in sustainable energy – entrepreneurs, businesses, corporates, researchers, investors, universities and public administration.
The value chain approach to accelerating projects has special value to green hydrogen deployment, where the level of investment and regulation means that to date, subsidies have been essential to enabling projects to get off the ground.
“Our goal is to help industrial green hydrogen projects to de-risk and to accelerate time to market,” Carina explained. “We construct partnerships that can decarbonise energy production and consumption without the need for subsidies, reducing the critical path to profitability. We have one metric: how can we ensure that a green hydrogen project can make money today?”
Green steel is one area with the potential for green hydrogen to decarbonise production while also being financially sustainable.
H2 Green Steel is an example of a project where the off-taker and other actors along the value chain were co-creators to develop a greenfield steel plant in Sweden.
“To become carbon neutral and reduce emissions across the supply chain a vehicle manufacturer needs to decarbonise the raw materials that they are buying and that means green steel.”
Just addressing the energy consumption inherent in steel production reduces the base emissions of the vehicle if a marginal increase in cost can be accommodated.
“Vehicle manufacture is a good example where the premium for a ton of green steel can be offset within the total value chain of the product. There is capacity at other points in the value chain to moderate a marginal increase in cost because the net zero target affects everyone – not just the green hydrogen or steel company.”
Carina’s team builds consortia where experts reimagine how to decarbonise the value chain incrementally at each link.
“There are many emerging applications not one ‘quick fix’,” Carina explained. “We are examining shipping and fertiliser production, creating projects that get the downstream and upstream together looking at the puzzle from both ends. Then we can, for example, show European regulators how these projects can be built to scale and what will be needed on demand side to foster market development. This then increases access to finance and facilitates more rapid off taker agreements. The whole process is streamlined by examining it as one piece.”
There is a demand from end customers today in green steel and this makes the deal easier as there already a market ‘pull’. Using green hydrogen to decarbonise fertiliser production is more complex as the value chain is longer and less consolidated.
“It’s a sector where we are dealing with individual farmers and co-operatives, so we need to find the right projects to prove principle. The complexity of the problem is also its beauty because it means that there are lots of links in the chain where carbon levels can be whittled. When everybody wants to decarbonise a supply chain then it’s a win/win/win.”
At a time when green hydrogen is receiving a lot of traction, focusing on the end user is a means to create decarbonising programmes that don’t have to wait for regulation or subsidies.
“We shouldn’t build a business case on subsidies,” said Carina. “Niches like green steel demonstrate how we can bring innovators together to share risks and rewards creating special purpose vehicles
By “putting skin in the game” alongside skills and expertise, IP generation and technology scouting, Carina’s team is able to explore the potential of projects simultaneously.
“We are making more and more connections, matching producers to users and opening up customers. There is global interest in our project-driven value chain approach It’s about bringing teams together to create opportunities, and then seizing individual solutions to individual requirements, one by one.”