The race for the competitiveness of green hydrogen is on

One way of producing hydrogen uses electrolysis, in which an electric current splits water into oxygen and hydrogen. When the electricity used in this process comes from a renewable source, some call it “green” hydrogen.

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Siemens Energy and Air Liquide have announced plans to set up a joint venture focused on the production of “industrial-scale renewable hydrogen electrolyzers in Europe.”

The move, announced on Thursday, represents the latest attempt to find a way to reduce production costs for “renewable” or “green” hydrogen and make the sector competitive.

The establishment of the joint venture – Siemens Energy will hold a 74.9% stake and Air Liquide a 25.1% stake – is subject to official approval.

If everything goes according to plan, the headquarters will be in Berlin, where there will also be a production facility for electrolysis modules or stacks.

Plans for electrolyser production in the German capital had previously become known. Production is scheduled to begin in 2023, with an annual production capacity of 3 gigawatts in 2025.

The European Union’s executive, the European Commission, has previously announced that it aims to install 40 GW of renewable hydrogen electrolysers in the EU by 2030.

In February 2021, Siemens Energy and Air Liquide announced plans related to the development of a “large-scale electrolyser partnership”.

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.

In October 2021, Siemens Energy CEO Christian Bruch spoke about the challenges facing the green hydrogen sector. On Thursday, he emphasized the importance of scaling and collaboration going forward.

“To make green hydrogen competitive, we need mass-produced, cost-effective and scalable electrolysers,” Bruch said in a statement. “We also need strong partnerships,” added Bruch.

François Jackow, CEO of Air Liquide, described the creation of the joint venture as “an important step towards the emergence of a leading European ecosystem for renewable and low-carbon hydrogen”.

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The plan for a joint venture between Siemens Energy and Air Liquide is the latest attempt by multinational companies to make their mark in the green hydrogen space.

Just last week, oil and gas supermajor BP announced that it had agreed to take a 40.5 percent stake in the Asian Renewable Energy Hub, a huge project planned for Australia.

In a statement, BP said it would operate the development, adding that it had “the potential to be one of the largest renewable energy and green hydrogen hubs in the world”.

In December 2021, Iberdrola and H2 Green Steel announced they were collaborating to develop a €2.3 billion (around US$2.42 billion) project centered around a green hydrogen plant with an electrolysis capacity of 1 gigawatt rotates.