The race for green hydrogen competitiveness is on

One type of hydrogen production uses electrolysis, with an electric current splitting water into oxygen and hydrogen. If the electricity used in this process comes from a renewable source, some call it “green” hydrogen.

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Siemens Energy and Air Liquide have announced their intention to create a joint venture focused on the production of “industrial-scale renewable hydrogen electrolyzers in Europe”.

The move, announced Thursday, represents the latest attempt to find a way to reduce the costs of producing “renewable” or “green” hydrogen and make the sector competitive.

The creation of the joint venture – Siemens Energy will hold 74.9% of the capital, while Air Liquide will hold 25.1% – is subject to the approval of the authorities.

If all goes as planned, its headquarters will be in Berlin, with a facility producing electrolysis modules, or batteries, also based there.

Projects for the production of electrolyzers in the German capital had already been announced. Manufacturing is expected to begin in 2023, with annual production capacity of 3 gigawatts reached in 2025.

The European Union’s executive arm, the European Commission, has previously said it wants 40 GW of renewable hydrogen electrolysers to be installed in the EU by 2030.

In February 2021, Siemens Energy and Air Liquide announced plans related to the development of a “large-scale electrolyser partnership”.

Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a diverse range of applications and can be deployed in a wide range of industries.

It can be produced in several ways. One method is to use electrolysis, with an electric current splitting water into oxygen and hydrogen.

If the electricity used in this process comes from a renewable source such as wind or solar power, some call it “green” or “renewable” hydrogen. Today, the vast majority of hydrogen production is based on fossil fuels.

In October 2021, Siemens Energy CEO Christian Bruch spoke about the challenges facing the green hydrogen sector. On Thursday, he stressed the importance of scale and collaboration going forward.

“To make green hydrogen competitive, we need mass-produced, inexpensive, and scalable electrolyzers,” Bruch said in a statement. “We also need strong partnerships,” added Bruch.

Air Liquide CEO François Jackow described the creation of the joint venture as “a major step towards the emergence of a leading European ecosystem for renewable and low-carbon hydrogen”.

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The proposed joint venture between Siemens Energy and Air Liquide represents the multinationals’ latest attempt to set a milestone in the green hydrogen sector.

Just last week, oil and gas supermajor BP announced that it had agreed to take a 40.5% stake in the Asian Renewable Energy Hub, a huge project planned for Australia.

In a statement, BP said it would become the operator of the development, adding that it had “the potential to be one of the largest renewable energy and green hydrogen centers in the world”.

In December 2021, Iberdrola and H2 Green Steel announced that they would partner and develop a 2.3 billion euro (approximately $2.42 billion) project centered on a green hydrogen facility with a capacity of 1 gigawatt electrolysis.

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