Green hydrogen needs policy push to reach required scale -report

FRANKFURT (Reuters) - Green hydrogen will remain scarce in the short-term and its supply uncertain in the longer term without a decisive policy push, an analysis published on Thursday concluded.

Enthusiasm for green hydrogen, produced using renewable energy, has grown in recent years because of its advantages over other methods of manufacturing the clean-burning fuel.

Embraced by European Union policymakers, countries and companies, it could lead the way forward to replace millions of tonnes of "grey" hydrogen made with natural gas in order to meet the bloc's goal of net zero emissions by 2050.

But at current rates of growth in production, green hydrogen would likely supply less than 1% of total energy globally by 2035, while the EU might hit the 1% mark by about 2030, researchers behind the report in the journal Nature Energy.

The study was circulated by Germany's Potsdam Institute for Climate Impact Research, whose researchers participated.

Global green hydrogen capacity of 600 megawatts (MW) in 2021 needs to rise by 6,000 to 8,000 times by 2050 to hit meaningful scale, the report said, adding that only then can it contribute to climate scenarios compatible with the 2015 Paris Agreement.

"In particular, the EU's 2030 plan to supply 10 million tonnes of green hydrogen with domestic (electrolysis) capacity will be out of reach, unless policymakers can foster growth that is unprecedented for energy technologies," the researchers said.

Critics say hydrogen serves to prolong the use of fossil fuels when the aim should be to get rid of them entirely and that it requires large amounts of costly energy to produce.

The report said promoting hydrogen should not be an excuse to delay the rollout of other readily available clean energy options such as electric mobility or heat pumps.

"We need to scale all crucial zero-carbon technologies with full effort," it said.

European gas prices have soared to record highs this year as a result a sharp fall in Russian exports since the start of the Ukraine crisis in February.

This has made renewable power with its low marginal costs, once deployment, operations and output swings are accounted for, look increasingly attractive, some analysts say.

(Reporting by Vera Eckert, editing by Rachel More and Alexander Smith)