Czechia expects shift to renewable H2 imports from 2030

The Czech Republic wants to have 400MW electrolysis capacity installed by 2030, but does not expect major additions afterwards as renewable hydrogen demand could then be more cost-effectively met by imports, based on an update of the country's national hydrogen strategy.

The country will need around 21,600 t/yr of renewable hydrogen, including as derivatives, by 2030 to meet EU targets in the revised renewable energy directive (RED III), according to the strategy. Member states have to ensure that 42pc of all hydrogen used in industry is renewable and that renewable hydrogen and derivatives make up 1pc of all transport fuels, based on RED III.

In order to reach the required renewable hydrogen supply, 400MW of domestic electrolysis capacity should be installed based on an expected utilisation of 30pc, the government said.

Prague wants to have at least 160MW of capacity installed by the end of 2027 as this capacity would then be exempt from the EU's additionality rules, it said.

Under EU rules, electrolysis plants that come on line after December 2027 would have to be powered by renewable assets that were commissioned not more than 36 months earlier. This is intended to avoid "cannibalisation" of existing renewable power for hydrogen production.

Plants that come on line earlier would only have to adhere to the additionality rules from 2038 onwards. Avoiding these initially could reduce the cost of renewable hydrogen production as plants could then draw on power from existing renewables assets, the government said.

Prague's updated plan also foresees that the country could by 2030 possibly make 20,000 t/yr of low-carbon hydrogen — such as via electrolysis fed by nuclear power or from natural gas with carbon capture and storage or utilisation — to help decarbonisation efforts, even though this does not count towards the EU targets.

Still, the combined renewable and low-carbon hydrogen production of just over 40,000 t/yr by 2030 is much lower than the 100,000 t/yr planned in the country's original strategy from 2021, which had been based more broadly on industry expectations rather than specific policy requirements.

Required infrastructure for hydrogen pipeline imports will not become available this decade, necessitating the focus on domestic production, the strategy suggests.

But beyond 2030, the Czech Republic is betting on renewable hydrogen pipeline imports from other parts of Europe or even further afield. The strategy does not outline further additions to domestic production capacity in the 2030s as imports will be cheaper then, according to the government.

Prague expects that imported renewable hydrogen could be available at around €4/kg "at the exit of the transport system" in the early 2030s, while domestic production might still cost as much as €8/kg, even with subsidies.

In order to ensure stable supply via imports, the government wants to implement facilitating measures, such as a conversion of gas pipelines, as soon as possible. According to the strategy, renewable hydrogen could be imported directly via pipeline from the Balkans and Turkey, the Baltic Sea and Scandinavia, North Africa and possibly from Ukraine. But while the Czech Republic is landlocked, it could also receive hydrogen that is delivered to European ports from overseas, the government said.

Prague estimates that combined demand for renewable and low-carbon hydrogen could reach 1mn t/yr by 2040.

The strategy sets out a range of measures that should be explored to support the sector, including funding for domestic production in the coming years. This would primarily come from the EU Modernisation Fund and could involve measures such as tax incentives for production and consumption.

By Stefan Krumpelmann