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A tutto gas
H2 target model: Is every beginning difficult?

Report and analysis from the E-Control workshop on "Key points of the H2 target model" on 6 May 2025

by Alfred Schuch
5/8/2025

Yes, in this case, all beginnings are difficult - even very difficult. The regulatory authority E-Control has organised a workshop - within the framework of its currently still limited legal requirements with regard to the hydrogen economy - in which the first key points of the envisaged H2 target model were discussed intensively with selected experts. Additional online participation was offered for reasons of space and was also widely utilised - ultimately, it is about the ramp-up of a truly challenging task - namely the establishment of a market-based (green) H2 economy in Austria - embedded in the EU.

(Green) hydrogen (H2) has the potential to contribute to the decarbonisation of the "hard to abate" sectors as an energy carrier and raw material - thus supporting global decarbonisation. The provision of H2 from clean sources, based on the appropriate infrastructure and transport and storage on a large scale in or from different regions, in addition to domestic production, would be key to securing a diversified H2 supply with regard to the targeted decarbonisation goals. The framework conditions for the launch of the H2 economy could hardly be more difficult - in times of tight state coffers and the jeopardised competitiveness of Austrian industry, keyword "high energy costs". These accompanying circumstances were also pointed out in the introductory statements.

The target model proposed by E-Control - based on the requirements of Directive (EU) 2024/1788 and Regulation (EU) 2024/1789 - is very much orientated towards the experience gained from the functioning natural gas market. In order to do justice to the very broad scope of the task and also to map the entire value chain, from generation, transport, storage and trading to offtake, the relevant representatives were assigned to three panels in which these experts discussed the key points envisaged by E-Control.

Due to the enormously high investment requirements, it was assumed - according to the author's impression - that H2 clusters could form first, which would then have to be connected. How and when the import of H2 could become effective depends on the progress of international H2 import projects, such as the SoutH2 Corridor or the H2Med project, and is therefore associated with major question marks/risks. There were unanimous calls to avoid "over-regulation" in the initial phase - especially as it is usually an existing market that is (heavily) regulated and not one that is being developed. Based on the different perspectives and ideas, the conclusion can be drawn that in the start-up/ramp-up phase, a "handful" of H2 producers and consumers can be assumed, meaning that the market remains clear. The "chicken and egg" problem (supply and demand are interdependent) will probably be strongly influenced by the investment requirements of the customers. While it is more or less irrelevant for the refinery process from a technological perspective whether it is grey or green H2, a steel producer would have to replace existing blast furnaces with
direct reduction plants, including electric arc furnaces - i.e. change the technology completely - and consequently make very high investments. This means that in the event of
This means that if there is not enough H2, the steel production process would come to a standstill and, in the worst case, the plant would have to be closed - including consequences such as job losses, etc. It therefore seems sensible to first decarbonise those "hard to abate" sectors - such as the Schwechat refinery - with green H2 in the ramp-up phase where no technological change is required. Here, for example, it must be taken into account that H2 storage facilities for large quantities of H2 - in Austria pore storage facilities - must also be available nearby.

The large number of tasks to be mastered - some of which are in conflict with each other - shows that we are facing a mammoth task - in times of tight budgets in order to somehow manage the really high investments together - along with other additional challenges. So yes, the beginning is very difficult here - especially as the process that has been initiated needs to be consolidated and the roles and responsibilities still need to be clarified.