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Green Hydrogen Production to Begin at ZE PAK This Year

ENERGYGreen Hydrogen Production to Begin at ZE PAK This Year

Interest in hydrogen investments from the private sector is growing: this year, green hydrogen production is set to start at ZE PAK, and the H2Silesia project by Polenergia in Upper Silesia, which aims to build a large-scale factory with a capacity of approximately 105 MW, recently received nearly 143 million euros in funding from the European Commission under the EU’s IPCEI Hy2Infra initiative. Despite ongoing initiatives in Poland, the hydrogen market’s development still faces three main barriers: regulatory, financial, and technical.

“Hydrogen is essential for achieving a zero-emission economy by 2030,” emphasizes Emilia Makarewicz, board member of Polenergia H2Silesia, in an interview with Newseria Biznes. “While many sectors of the economy can be decarbonized based on green energy, there are areas where this is impossible. Therefore, hydrogen is necessary as a green energy carrier in these sectors. It is also crucial for stabilizing and effectively managing the production of green electricity.”

Green hydrogen (produced by electrolysis powered by renewable energy sources) is a key element of the energy transition, allowing for the avoidance of CO2 emissions in hard-to-decarbonize industrial sectors such as steel and cement production, as well as maritime and aviation transport. It is also one of the leading options for storing energy from renewable sources.

In July 2020, the European Commission published the “Hydrogen Strategy for a Climate-Neutral Europe.” Green hydrogen is highlighted as one of the key energy carriers to help achieve the European Green Deal. According to this strategy, by 2050, hydrogen is to become a fully zero-emission and widely available energy source in the EU.

Support, mainly legislative, for the development of hydrogen technologies is now being offered not only by the EU but also by individual countries, including Poland, which adopted its own “Hydrogen Strategy until 2030 with a Perspective until 2040” in 2021. This strategy includes installing approximately 2 GW of low-emission hydrogen production capacity by 2030 and building an innovation ecosystem of hydrogen valleys.

Importantly, Poland is currently the third-largest producer and one of the largest consumers of hydrogen in the EU, although it primarily produces gray hydrogen – made from natural gas reforming or other hydrocarbons derived from oil refining. According to consultancy EY, replacing gray hydrogen with green hydrogen will present capital and organizational challenges but is still much easier than building demand and infrastructure from scratch. Therefore, Poland’s starting position at the threshold of the hydrogen revolution appears favorable.

“Our potential for hydrogen production and uptake is significant, but if we do not immediately unlock regulations related to green energy production and increase the share of green energy in Poland’s energy mix, we will not be able to talk about green hydrogen. As a result, our situation and the competitiveness of our industry will deteriorate, and we are already the most emission-intensive economy in Europe,” notes Emilia Makarewicz. “The entire sector still has a lot to do: by 2030, we should be producing hundreds of thousands of tons of green hydrogen. Looking at the projects under development, their locations, and the level of advancement, these goals are currently unattainable. This must be accelerated immediately.”

She points out that the hydrogen market’s development still faces many barriers, with the main ones being regulatory and financial.

“Not all barriers equally impact the feasibility of hydrogen projects. The regulatory barrier is not so severe; progress is quite good. Currently, Polish regulations do not significantly hinder, and European regulations strongly support by setting new targets and standards. Financially, there are more challenges, as the subsidy system is still insufficient, not tailored to regions, and inadequately distributed among European countries. It still requires work. However, we see that it is starting to move. Poland is also considering implementing its own hydrogen production support system, and we hope it will be clarified soon. Banks have varying appetites for risk, but investment funds are more open to hydrogen and more willing to invest in such projects,” says the board member of Polenergia H2Silesia.

The pace of project development also indicates considerable technological challenges.

“Not all projects are launched on time, but there are more of them, and each new project is a learning experience for companies, compressor suppliers, electrolyzer suppliers, etc. This gives them the opportunity to improve. Therefore, I believe that during the construction or finalization of such investments in Poland, we will benefit from lessons learned in other regions of Europe,” says Emilia Makarewicz.

Interest in hydrogen investments from the private sector is growing. According to announcements, green hydrogen production will start this year at the Pątnów-Adamów-Konin Power Plant Complex. The installation will produce hydrogen using electrolyzers and energy obtained from biomass combustion, with the fuel going to refueling stations for passenger vehicles and buses across the country. Companies such as Orlen and Polenergia are also heavily investing in hydrogen technologies.

“Polenergia is implementing its hydrogen strategy according to schedule, even more ambitiously than initially planned. We are doing well in securing financing for hydrogen projects we want to implement, so we are on a good path to support the goals set by Poland and the European Union,” says the board member of Polenergia H2Silesia.

Polenergia is developing the H2Silesia project in Upper Silesia, which involves building a large-scale green hydrogen factory with a capacity of approximately 105 MW, capable of producing about 13,000 tons of hydrogen annually for heavy industry and zero-emission transport. It can also support the energy transition of the region associated with the extraction and use of fossil fuels.

Earlier this year, the European Commission confirmed funding for this project amounting to up to 142.77 million euros under the IPCEI Hy2Infra initiative. The Polenergia project is the only one in Poland included in this program.

“H2Silesia received notification from the European Commission under the IPCEI (Important Projects of Common European Interest) program, and we obtained the possibility of funding close to 143 million euros. We are currently awaiting national financing and the opportunity to apply for national funds. We are about to start designing, we have a preliminary location, we have thoroughly analyzed the supplier market, and we are preparing for the IPCEI tender since everything is subject to public procurement law, and the timelines for such proceedings are measured in many months,” says Emilia Makarewicz.

The Hy2Infra program, focusing on building hydrogen infrastructure in the EU, is an integral part of the EU’s “Hydrogen Strategy,” which aims to achieve climate neutrality by 2050. The European Commission launched it under the IPCEI initiative. Seven member states participate in it: Poland, France, Germany, Italy, the Netherlands, Portugal, and Slovakia.

The H2Silesia green hydrogen factory project by Polenergia in Silesia is one of several company initiatives in this area. The most advanced is H2HUB Nowa Sarzyna, located in Podkarpacie. The project at the Nowa Sarzyna CHP plant involves building a green hydrogen production facility with a capacity of 5 MW.

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