Scenarios for Clean Hydrogen Demand in Europe

The study looks to provide  a comprehensive understanding of the sources of demand for hydrogen in Europe and, critically, the assumptions behind this demand. The focus is primarily on Northwest European countries such as Germany, the Netherlands, Belgium and England. Domestic use inside Scotland is out of scope, focusing only on export. This research study has been developed with the explicit understanding that it will allow further analysis to assess the size of the commodity export opportunity in Europe and, within this, Scotland’s export opportunity.

In summary, the research study’s key objectives are:

• Quantification of hydrogen end-use demand by sector and region, by scenario and comparatively across the scenarios.
• Development of an understanding of the current assumptions on imports and exports, and if any correlations by sector exist.
• Mapping of the assumptions that are being used in the varying scenarios.
• Identify how the different scenarios are being developed, which can be cross compared directly, and which need to be seen as stand alone, and;
• Further analysis by the Scottish Government, Scottish Enterprise and partners in developing hydrogen policy.

The research study evaluated the potential global/European markets for low carbon hydrogen demand based on a selection of hydrogen scenarios from various technical reports that are published.

The scope of the analysis was focussed on the following parameters. Namely:

• Focus on scenarios which cover the listed NW European countries, looking at hydrogen demand and domestic supply in each.
• Other countries are included if and where that are beneficial and relevant scenarios are available to review.
• Europe-wide scenarios have been evaluated to provide some insights into the domestic production capacity of Southern Europe/Spain and hydrogen trade flows. Based on an assessment by the IEA, it was assumed that NW Europe would account for 60% of the total European demand.
• This study has focused on public domain sources which can be referenced.

The majority of scenarios foresee industry as the primary offtaker sector in the early 2030s, highlighting sizeable hydrogen demand in subsectors such as refineries for fuel production, ammonia production (fertiliser industry) and the iron and steel industry.

Low case scenarios under the European reports show that hydrogen demand in NW Europe could be met by domestic production, highlighting the crucial role of low carbon hydrogen (e.g. blue hydrogen) in avoiding a net deficit of hydrogen supply across the region.

Most global and European high case scenarios foresee Europe as an importer region due to its limited renewable resources (wind and solar) and that Europe will scale up its hydrogen economy proportionally earlier than in other geographies.

According to global reports, hydrogen imports will be transported as pure hydrogen via pipeline from North Africa and other European countries (Norway and the UK) and imported by sea in the form of hydrogen derivatives (e.g. ammonia) from global markets.

Many of these scenarios foresee Germany as an importer country, which is also emphasised in Germany’s Hydrogen Strategy.

This report reflects a snapshot in time and that updated and new reports will continue to emerge and reflect the dynamic change of the demand for hydrogen and hydrogen products in key markets. However one clear key market has emerged in the demand research study. Germany unsurprisingly is the emergent market which demonstrates the highest demand for hydrogen and hydrogen products over the short to medium term. This outcome reflects and aligns well to our work across Europe with a number of MOUs in place with Germany around cooperation in building economic partnerships around the supply and demand for Scottish hydrogen and hydrogen products.