The Green Hydrogen project aims to decarbonise the industrial north of Europe

Cepsa CEO: the EU has a real energy crisis that is likely to last

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 how the emerging sector is attracting the interest of major companies and organizations.

In an announcement Tuesday, Cepsa, which is involved in the exploration and production of oil and natural gas, said the project will establish “a green hydrogen supply chain” between the port of Algeciras in southern Spain and Rotterdam, the Dutch city that hosts Europe’s largest port.

“The agreement accelerates the decarbonisation of heavy industry and shipping and supports Europe’s energy independence and security”, reads the statement, also published by the port of Rotterdam.

“The cooperation is part of Rotterdam’s ambition to supply Northwest Europe with 4.6 million tonnes of green hydrogen by 2030,” he added.

The two sides signed a memorandum of understanding relating to the project. Cepsa’s shareholders are The Carlyle Group and Mubadala Investment Company Group.

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“Cepsa plans to export the hydrogen produced in its San Roque energy park near the bay of Algeciras, via hydrogen carriers such as ammonia or methanol, to the port of Rotterdam,” read Tuesday’s statement.

The CEO of the Port of Rotterdam Authority, Allard Castelein, said Northwestern Europe used “far more energy than it can sustainably produce”.

“We are therefore creating more 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 place to produce green hydrogen for both local use and export” thanks to its ports, wind, sun and “abundant space”.

“The creation of this trade route between Algeciras and Rotterdam is a substantial contribution to Europe’s ambition to reduce CO2 emissions, increase Europe’s energy independence and stimulate our economies,” he said.

Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a wide range of applications and can be used in a wide range of sectors.

It can be produced in several ways. One method includes electrolysis, with an electric current that splits water into oxygen and hydrogen.

If the electricity used in this process comes from a renewable source such as wind or solar, some call it “green” or “renewable” hydrogen. Today, the vast majority of hydrogen production is based on fossil fuels.

Tuesday’s announcement stated that Cepsa aimed to “lead green hydrogen production in Spain and Portugal by 2030 with a production capacity of 2 GW”.

He added that it will develop a 7 GW portfolio of renewable energy projects, including solar and wind, to produce the renewable energy needed for green hydrogen generation.

The plans of Europe

The European Commission has said it wants 40 GW of renewable hydrogen electrolysers to be installed in the EU by 2030.

Last month, the commission’s chair, Ursula von der Leyen, expressed support for hydrogen during her State of the Union address.

In comments translated on the commission’s website, von der Leyen said that “hydrogen can be a game changer for Europe. We need to move our hydrogen economy from one niche to another.”

In his speech, von der Leyen also referred to a “2030 target of producing ten million tonnes of renewable hydrogen in the EU every year”.

“To achieve this, we need to create a market maker for hydrogen in order to bridge the investment gap and link future supply and demand,” he said.

To this end, von der Leyen also announced the creation of a European Hydrogen Bank. It is hoped that this can invest 3 billion euros (about 2.91 billion dollars) to support the future hydrogen market.