Madrid-based energy company Cepsa said it will work with the Port of Rotterdam to develop “the first green hydrogen corridor between southern and northern Europe,” in the latest sign of the burgeoning sector attracting interest from large companies and organizations.
In an announcement on Tuesday, Cepsa – which is involved in the exploration and production of oil and natural gas – said the project would “create a green hydrogen supply chain” between the port of Algeciras in southern Spain and Rotterdam, the Dutch city where it is based is, would build Europe’s largest port.
“The deal accelerates the decarbonization of heavy industry and maritime transport, supporting Europe’s energy independence and security,” read the statement, which was also released by the Port of Rotterdam.
“The cooperation is part of Rotterdam’s ambition to supply North West Europe with 4.6 million tons of green hydrogen by 2030,” it added.
The two parties have signed a letter of intent regarding the project. Cepsa’s shareholders are the Carlyle Group and the Mubadala Investment Company Group.
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“Cepsa plans to export hydrogen produced at its San Roque energy park, near the Bay of Algeciras, to the port of Rotterdam via hydrogen carriers such as ammonia or methanol,” read Tuesday’s statement.
The CEO of the Port of Rotterdam Authority, Allard Castelein, said north-west Europe uses “far more energy than it can produce in a sustainable way”.
“We are therefore building multiple trade routes for green hydrogen together with exporting countries and private companies around the world,” he added.
Castelein went on to describe southern Spain as a “logical location to produce green hydrogen for both local use and export” thanks to its ports, wind, sun and “ample space”.
“Establishing this trade route between Algeciras and Rotterdam is an essential contribution to Europe’s drive to reduce carbon emissions, increase Europe’s energy independence and boost our economies,” he said.
Described as a “versatile fuel” by the International Energy Agency, hydrogen has a diverse range of applications and can be used in a wide variety of industries.
It can be made in a number of ways. One method is electrolysis, in which an electric current splits water into oxygen and hydrogen.
When the electricity used in this process comes from a renewable source like wind or solar, some call it “green” or “renewable” hydrogen. Today, the majority of hydrogen production is based on fossil fuels.
Tuesday’s announcement said Cepsa aims to “lead green hydrogen production in Spain and Portugal by 2030 with a production capacity of 2 GW”.
It added that it will develop a 7GW portfolio of renewable energy projects – including solar and wind – to generate the renewable energy needed to produce green hydrogen.
Europe’s plans
The European Commission has announced that 40 GW of renewable hydrogen electrolysers will be installed in the EU by 2030.
Last month, Commission President Ursula von der Leyen expressed support for hydrogen in her State of the Union address.
In remarks translated on the Commission’s website, von der Leyen said: “Hydrogen can be a game changer for Europe. We need to take our hydrogen economy from niche to scale.”
In her speech, von der Leyen also referred to a “2030 target of producing ten million tons of renewable hydrogen in the EU every year”.
“To do that, we need to create a market maker for hydrogen to bridge the investment gap and connect future supply and demand,” she said.
To this end, von der Leyen also announced the establishment of a European hydrogen bank. It is hoped that it can invest €3 billion (around US$2.91 billion) to support the future hydrogen market.