Greece set to miss EU goal for green H2 use in industry

Greece has further reduced its 2030 goal for installed electrolysis capacity, which suggests the country will miss an EU target for renewable hydrogen use in industry.

A new national energy and climate plan (NECP) put forward for consultation by the interior ministry sets a goal of 187MW installed electrolysis capacity by 2030.

This follows several revisions over the past two years. An initial 2021-30 NECP from January 2023 set a target of 1.2GW. This was raised to 1.7GW by August that year, but slashed to just 300MW in November.

That sharp cut followed an assessment that previous targets had been too high, considering Greece's ability to produce and consume renewable hydrogen by the end of the decade. Previous iterations of the NECP had considered injections of renewable hydrogen into the natural gas grid, which have since been deemed too expensive.

Renewable hydrogen use in Greece is now foreseen to be limited almost exclusively to production of synthetic fuels for shipping and aviation until 2030. The government expects around 1 TWh/yr of hydrogen will be needed for this, equivalent to just over 30,000 t/yr based on hydrogen's lower heating value of 33.33 kWh/kg.

It could be difficult to produce this amount with just 187MW of electrolyser capacity, especially as the plan foresees a small additional amount would be required to fuel buses in Athens and Thessaloniki. The ministry was not immediately available to comment on how the electrolyser and production targets align.

Off target

The synthetic fuel production could allow Greece to meet EU targets for use of renewable hydrogen or derivatives in transport, but the NECP suggests it will not meet the bloc's goal for industry use.

The EU requires member states to ensure 42pc of industrial hydrogen use is renewable by 2030. Greece's NECP does not consider any renewable hydrogen use that would count towards the industry targets by then.

This is despite the country currently using around 700-1,050 GWh/yr of conventional hydrogen — made from natural gas with unabated emissions — for ammonia production, some of which would arguably have to be replaced by renewable hydrogen to meet the target.

Greek refineries use conventional hydrogen, but most of this would be covered under EU targets for transport rather than for industry. Emissions at refineries will be reduced primarily by switching to 'blue' hydrogen that uses carbon capture and storage, rather than renewable supply, according to the NECP.

Previous iterations of the NECP had mentioned the EU's 42pc target for 2030, but the new plan makes no such reference. The ministry instead states broadly that goals set by the EU "are not certain to be achievable" given a lack of maturity with regard to renewable hydrogen.

By 2035, member states will have to reach 60pc of renewable hydrogen use in industry. Greece could be able to comply with this based on the NECP projections, with 700 GWh/yr use for ammonia production anticipated by then.

Required electrolyser capacity is expected to rise to 680MW by 2035 and to more than 5GW by 2050 (see table).

By 2035, the renewables share in Greece's electricity mix could reach 90pc, which would make it easier for grid-connected electrolysis projects to comply with the EU's definition of renewable hydrogen as it would remove requirements such as additionality and the need for power purchase agreements.

Greece does not expect to require renewable hydrogen imports and could export into Europe in the long-run through two planned pipeline connections in the country's north, according to the NECP. It stops short of providing estimates for export potential, pointing to uncertainties around technological developments and demand.

Carrots and sticks

Athens wants to support the hydrogen sector through subsidies for production of renewable hydrogen and derivatives that could include demand-side incentives such as tax exemptions.

The European hydrogen bank's auction-as-a-service system could be used for production support, but the NECP leaves open the possibility of other mechanisms.

Mandated quotas for renewable hydrogen consumption in transport or industry could be "an effective mechanism" for reaching demand targets, but only once "the relevant applications" have reached "technical and economic" maturity, according to the NECP.

The government is concerned about increases in consumer prices given the considerably higher costs for cleaner fuels. It points to potential detrimental effects on the tourism industry — which accounts for 13pc of gross domestic product — if the cost of airfares and coastal shipping increases significantly.