Geopolitics of European hydrogen aspirations: creating a sustainable balance or a combustible mix?

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Discussions of the role of hydrogen in the transition to carbon neutral economies and the EU Green Deal rarely include consideration of geopolitical aspects and/or national security imperatives. However, given the importance of energy as a factor in global and regional geopolitical trends and national security, the development of hydrogen will not only reshape energy relations between countries, but also change the geopolitical picture. wider.

While elevating new aspects of geopolitical interactions, such as the importance of technology and regional clusters, hydrogen development could also unwittingly transpose current challenges – such as overreliance on energy supplies from hostile powers. – in a carbon-neutral future. Given that Europe’s energy sovereignty and geopolitical role in its neighborhood could be at stake, the link between geopolitics, energy security and hydrogen development should receive particular attention. At the same time, the transformative socio-economic impact of the energy transition will create winners and losers within and between nations, which in some cases will have national security implications; hydrogen development may offer ways to mitigate this.

This report focuses on exploring the impact that the European Union’s hydrogen development ambitions and plans – including an expansion of its infrastructure in the form of the European Hydrogen Backbone – on its geopolitical position until 2040. It first examines in more detail the European hydrogen strategy and its links with the energy union, as well as with questions of strategic autonomy and energy sovereignty Europeans. He finds that the development of hydrogen, alongside the growth of the renewables sector, offers a great opportunity to reduce the current exposure to hostile energy players who often hamper Europe’s ability to act. as a geopolitical force in its vicinity. However, he also warns that the lack of unity and coherence which currently plagues the Energy Union, and which manifests itself in recent controversies such as the Nord Stream 2 undersea gas pipeline between Russia and Germany before Russia’s 2022 invasion of Ukraine, could potentially weaken such a geopolitical impact of hydrogen.

Although the development of hydrogen forces Europe to rely on external suppliers, the fact that this supply can come from many countries offers a significant opportunity to diversify and reduce the power of the energy supply as a geopolitical weapon. In this regard, two directions stand out in the EU neighbourhood: Ukraine to the east and the Mediterranean with the Middle East and North Africa (MENA) to the south. Both have enormous potential to play a major role in European hydrogen supply chains, and their cultivation by the EU would offer many opportunities both to strengthen the influence of the EU in its neighborhood and to build new partnerships. Certainly, neither of these directions is without risks and drawbacks: political instability and armed conflicts, poor governance, unstable investment environment, water scarcity and, in some cases, dependence on water. Regarding the revenues of the hydrocarbon industry will be important factors that will hinder efforts to unlock their potential. . Ukraine, in particular, will need sustained reconstruction efforts to deal with the massive devastation wrought by Russia’s war. This will divert resources and attention, but transforming its energy sector and expanding its hydrogen production base could still be important parts of these efforts.

Europe’s own domestic hydrogen production potential is another direction this report examines as a way to untangle itself from current geopolitically toxic dependencies and strengthen its energy sovereignty. The Baltic States and Finland represent an interesting case study of how hydrogen could underpin a regional cooperation cluster with a high degree of integration – one of the new features of the hydrogen era that will have geopolitical implications. The report, however, finds that the different national perspectives on hydrogen, the lack of coordination and some trust issues stemming from recent failures of solidarity and unity in tackling the regional nexus of energy security and geopolitics could hamper future regional cooperation in the field of hydrogen.

The hydrogen economy also offers significant advantages in managing national security challenges at the national level. In Estonia, the loss of the fossil fuel-based industry in the highly sensitive northeastern region of Ida-Virumaa will deal a socio-economic blow to the local population. This report highlights how the vulnerability of the region, dominated by Russian-speaking ethnic minorities already highly exposed to malign Russian influence activities, could jeopardize Estonia’s energy transition and its national security. The creation of a national hydrogen cluster in this region, building on its industrial infrastructure and human capital, could mitigate the consequences of decarbonization and energy transition. However, these considerations do not seem to receive enough attention from government and energy companies when developing the map of the future of hydrogen in Estonia.

The report recommends that the various EU stakeholders, including those behind the European hydrogen backbone, continuously monitor and assess geopolitical risks, especially in terms of impact on energy sovereignty EU, when creating and managing new hydrogen-related interdependencies with regions and countries outside the EU. The report urges the EU to support the energy transition and the necessary market and governance reforms in post-war Ukraine and MENA countries to facilitate their emergence as crucial and reliable partners in supply chains. hydrogen value. The report also recommends closer coordination and joint planning between hydrogen players from the Baltic States and Finland when forming a regional hydrogen supply cluster that would contribute to European energy sovereignty. Last but not least, he suggests that, for reasons of national security and resilience, Estonia should pay more attention to the Ida-Virumaa region when developing its national hydrogen roadmap.

Download the report: Geopolitics of European hydrogen aspirations (PDF)

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