Thursday, April 18, 2024
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EU to sign at least three green hydrogen deals at COP27

The EU is using the COP27 climate conference to bolster its green hydrogen supply options, mostly likely signing at least three hydrogen co-operation agreements with prospective renewable H2-producing nations before the two-week summit is over.

The bloc is set to sign a hydrogen co-operation agreement with Egypt at the conference in Sharm El-Sheikh next week, which could see the North African country ultimately trading green H2 with European customers.

And European Commission (EC) president Ursula von der Leyen has been busily shoring up other potential green hydrogen suppliers at COP27, laying the groundwork for future supply from Kazakhstan and Namibia, both tipped to be large-scale producers of renewable H2.

EU officials are working on a follow-up to a joint statement signed by von der Leyen and Egyptian president Abdel Fattah el-Sisi in June, in which the two governments agreed to develop a so-called Mediterranean Hydrogen Partnership, focused on developing connecting infrastructure between Egypt and the European landmass.

The new agreement will outline a framework for investment and is likely to include a certification scheme for renewable hydrogen, which can then be traded between Egypt and Europe.

The EU wants to source a secure supply of green hydrogen for the bloc, to decarbonise Europe’s industrial sector and meet its targetsof importing 10 million tonnes by 2030.

But it is also keen to keep its own green hydrogen and industrial sectors competitive, and is carefully structuring bilateral discussions on supply of hydrogen and raw and refined materials around transparent investment and mutually agreed environmental, social and governance (ESG) standards.

These were baked into the tentative supply and investment agreements it signed with Kazakhstan and Namibia yesterday and today respectively.

Both memoranda of understanding (MoU) see the EU commit to work with each respective government to develop value chains for green hydrogen and raw and refined materials (and in the case of Kazakhstan, batteries) with the ultimate goal of securing a supply of these products to Europe.

But both placed an emphasis on alignment with Europe’s high ESG standards, with the Kazakh agreement also containing a commitment to enhance “the transparency and information on measures related to investment, operations and exports relevant to the scope of this partnership”.

Kazakhstan is former Soviet presidential republic without free and fair elections, which has strong ties to Russia. However the EU, which is already the largest foreign investor in Kazakhstan, is keen to pull it further into its orbit, partly by encouraging liberal economic principles.

The former Soviet republic plays host to one of the world’s largest prospective green hydrogen projects, the 20GW Hyrasia One scheme under development by Sweden’s Svevind. European Council president Charles Michel was present when the government of Kazakhstan agreed development terms with Svevind, raising the possibility that EU customers could be in line to be offtakers from the project.

And Namibia, which has abundant wind and solar resources, is positioning itself as a future global producer of “the world’s cheapest green hydrogen”, signing an H2 cooperation agreement with the German government in late March. Germany-based Hyphen is developing a 3GW green hydrogen project in the Tsau Khaeb national park.

Both MoUs envisage a comprehensive roadmap to this end being published within six months, with the European Investment Bank (EIB) pledging to “work towards” a €500m ($500m) loan to the Namibian government to go towards in the roadmap’s goals, including the build out of green hydrogen capability.

“This is not only a huge step forward for the EU’s climate ambitions but also an agreement beneficial to Namibia, a front-runner in the development of renewable hydrogen in Africa,” von der Leyen said.