MEMO/03/132

Bruxelles, le 16 juin 2003

The Hydrogen economy A bridge to sustainable energy - Brussels, 16-17 June 2003
On June 16-17 in Brussels the High Level Group on Hydrogen and Fuel Cells will present its first Report on this promising sector. Hydrogen and fuel cells are seen by many as key energy system solutions for the 21st century, enabling clean and efficient production of power and heat from a broad range of primary energy sources. In October 2002, the Commission established the High Level Group for Hydrogen and Fuel Cell technologies comprising leading personalities representing interested stakeholders from the hydrogen and fuel cell community. The aim was to determine the potential contribution of hydrogen and fuel cells to meeting the European Unions goal for sustainable energy systems, and to consider what should be done at European level to develop appropriate responses and actions at the research, industrial and political level. The conference on The Hydrogen economy A bridge to sustainable energy (Brussels, 16-17 June 2003), organised by the European Commission (with the assistance of the organising committee members) aims at presenting, validating and discussing the high level group report and its follow up recommendations, with relevant policy and decision makers.

1. The aims of the conference

To communicate to politicians, decision makers and civil society, the energy, environmental and economic benefits that hydrogen and fuel cells can bring; To present the High Level Groups summary report to the conference; To initiate debate on the report and the follow-up actions recommended; To consider the report in the context of EU and member state policies for energy, transport, environment, research and enterprise; To stimulate strategic research on hydrogen and fuel cells in the EU, identifying suitable structures for developing and implementing a European Research Agenda and a deployment strategy for H2 and fuel cells in Europe, such as the establishment of a Hydrogen and Fuel Cells Technology Platform. The audience will include high level policy and decision-makers from public administrations, the industrial, financial, scientific and research communities and recognised representatives of civil society. Participants have been expressly invited by the European Commission, on the basis of a consultation of EU Member States and various EU advisory bodies.

2. Why hydrogen and fuel cells ?

H2 and electricity are energy vectors that allow flexible multi-fuel solutions for stationary power and transport, favouring the introduction of renewable and carbonfree primary energy sources, including nuclear. The High Level Groups report describes how hydrogen and fuel cells are expected to bring substantial benefits in respect of: Greenhouse gas reductions, but mainly for beyond the Kyoto 2010 timescale (i.e. 2020-2030) hydrogen can be produced from renewable or carbon free primary energy sources; fuel cells are not only cleaner, but also more efficient energy converters than combustion systems; the cost of doing nothing to combat greenhouse gases may far exceed the cost of investing in new technology to mitigate the effects of climate change; Security and diversity of energy supply EU oil import dependency is forecast to rise from ca. 50% today to 70% by 2020, unless measures are taken; uncertainties on continuity of supply and fluctuations in prices can have severe impacts on sustainable economic development patterns; Air quality the EU has embarked on a clean air for Europe programme, focusing on air pollution from both stationary and transport sources; hydrogenpowered fuel cells are intrinsically clean, emitting only water vapour at the point of use; Industrial competitiveness the EU must compete with the most advanced nations (US, Canada, Japan); fuel cell energy converters are being developed for small portable power (lap-tops, mobile phones), cars and other vehicles, and small and large stationary combined heat and power systems; large markets are predicted with consequent wealth creation and employment opportunities; Growth in energy demand in developing nations - global energy consumption is forecast to double by 2050; by 2030 developing nations could account for half the worlds CO2 emissions; developed nations need to disseminate and transfer these environmentally friendly technologies, which will be essential to enhancing cohesion with industrialising economies by facilitating broader access to more diversified and decentralised energy sources.

3. The High Level Group

The High Level Group (HLG) on Hydrogen and Fuel cells was launched in Brussels on 10th October 2002 by the Vice President of the European Commission Loyola de Palacio, responsible for Energy and Transport, and Research Commissioner Philippe Busquin, with the support of President Romano Prodi. The group was invited to formulate a collective vision on the contribution that hydrogen and fuel cells could make to the realisation of sustainable energy systems in the future.

Structure and Membership

Members include 19 prominent stakeholders representing: Energy companies, utilities, fuel cell stack and component manufacturers and representatives of the transport sector National research centres and academia Policy-makers and public authorities User associations. For more details on the mandate of the HLG and their report, please: http://www.europa.eu.int/comm/research/energy/nn/nn_rt_hlg1_en.html

High Level Groups Report to the Conference

The HLGs summary report is a communication to this conference. The groups terms of reference requested a vision report outlining the research, deployment and non-technical actions that would be necessary to move from todays fossil-based energy economy to a future sustainable hydrogen-oriented economy, with fuel cells as prime energy converters. The report represents a collective vision and proposes agreed recommendations.

4. Overview of High Level Groups Recommendations

The High Level group strongly recommends the formation of a Hydrogen and Fuel Cell Technology Partnership. Major recommendations include: The creation of a Policy Framework that is coherent across transport, energy, environment and enterprise policies to reward technologies that meet sustainable development policy objectives; A Strategic Research Agenda with a substantially increased technical research and development budget in hydrogen and fuel cell technologies, supporting fundamental science through to validation programmes; The main issues on the research agenda include: - R&D on basic technologies to reduce fuel cell costs, improve performance and durability; - R&D on hydrogen production, distribution, and especially storage the latter is a significant bottleneck for hydrogen fuelled vehicles; - Hydrogen safety, standards and regulations for vehicles, systems and components; - Socio-economic research to establish the cost-effectiveness to meet policy objectives. A Deployment Strategy: including demonstration and pilot programmes to extend the technology validation exercises into the market development arena, through a number of lighthouse demonstration projects.

Furthermore, the HLG report recommends that: The technology partnership is steered by a European Hydrogen and Fuel Cell Advisory Council. The Advisory Council would provide governance and input from the different stakeholders in the hydrogen energy arena and assist with the establishment of initiative groups, to progress a far-reaching hydrogen and fuel cell programme, comprising initiatives, such as: - An integrated socio-economic research programme to complement and steer the technical support. - A business development initiative, bringing together different financing organisations to provide leadership for technology exploitation. - A Europe-wide education and training programme, spanning primary schooling to world-class research. - Enhanced international co-operation, working in partnership with North America and the Pacific Rim, as well as the developing world, to speed up the introduction of sustainable energy technologies. - A communication and dissemination centre for all these initiatives. The preparation of a dynamic European Roadmap for hydrogen and fuel cells to guide the transition to a hydrogen future, with realistic timescales, targets and milestones (a transition to a hydrogen-oriented economy will take 20 to 30 years), taking account of : - Time required to develop and phase in new technologies, new supply chains and new infrastructures. - Need to avoid disruption to existing economic and social structures. - Need for managing large public and private investments at a moderate and sustainable risk rate. - Need for trained personnel at all levels to develop and operate new technologies. - Compatibility of hydrogen it will co-exist with both conventional energy converters (e.g. gas turbines and piston engines) as well as fuel cells. The High Level Group concludes by calling for strong political and industrial leadership to ensure that the process starts now, and stresses the importance of getting the timing right for benefiting society and industry.

5. A global issue that needs a European response

The EU aims at establishing a sustainable energy supply, able to provide affordable and clean energy without increasing green house gas emissions. Hydrogen and electricity together with fuel cell energy converters represent an opportunity to facilitate the introduction of carbon free energy sources and particularly renewable energy sources. They open the way to integrated, open energy systems that simultaneously address all of the major energy and environmental challenges, and have the flexibility to adapt to the diverse and intermittent renewable energy sources that will be available in the Europe of 2030. Europe has the skills, resources and potential to become a leading player in the supply and deployment of hydrogen technologies. EU expertise, if harnessed and strategically guided, offers great potential in this field, but European policy, research and development are presently fragmented both within and across the different countries.

To be truly effective, research, development and deployment need to be well coordinated to achieve sufficient critical mass and avoid unnecessary duplication. Action at the European level is crucial to success. Europe must substantially increase its efforts and budgets to build and deploy a competitive hydrogen technology and fuel cell industry. This should not be left to develop in an uncoordinated fashion. Gaining global leadership will require a coherent Europeanlevel strategy, encompassing research and development, demonstration, and market entry. The Commission intends to discuss the setting up of a European Technology Platform on hydrogen and fuel cells to foster effective public-private partnerships between the research community, industry and policy makers in order to mobilise the research and innovation effort towards achieving a common goal. The Technology Platform could be a mechanism to bring together all interested stakeholders to agree a long-term vision on hydrogen and fuel cells, create a coherent, dynamic strategy to achieve that vision and implement an action plan to deliver agreed programmes of activities and optimise the benefits for all parties. It would naturally build on existing initiatives, networks and structures at all levels (European, national, regional, etc.). In view of the ambitious long-term objectives of the Technology Platform, it is evident that strong financial support will need to be associated with it in order to transform the vision into concrete results and generate a real impact. Such funding must be attracted from a variety of sources, including the instruments of the EU Framework Programmes, Structural Funds, national and regional research funding, the European Investment Bank, EUREKA etc. Stimulating increased private investment in research will also be a key goal of the platform. The global dimension of the challenge cannot be neglected and enhanced international co-operation, working in partnership with North America and the Pacific Rim, as well as the developing world, is necessary, to speed up the introduction of sustainable energy technologies. Co-operation with the US in this field is being actively pursued by the Commission, with an agreement due to be signed at the time of the conference, and discussions are underway to further enhance co-operation. Co-operation on hydrogen will be one of the most important items to be discussed at the next Transatlantic Summit to be held in Washington on the June 25, 2003.

6. Significant Hydrogen and Fuel Cell Related Programmes World-wide

USA Freedom Fuel and Freedom Car Programmes proposes a total of $1.7 billion (340 m$/year) over the next five years to develop hydrogen fuel cells, hydrogen infrastructure and advanced automotive technologies. According to the US Department of Energy those activities will result in 750,000 new jobs by 2030. Japan is also aggressively pursuing research and demonstration of hydrogen and fuel cells, with a 2002 budget estimated at around $240 million. The Japan Fuel Cell Commercialisation Conference will commission six hydrogen fuelling stations in Tokyo and Yokohama in 2002-03. The Japanese authorities have announced initial commercialisation targets of 50,000 fuel cell vehicles by 2010, and 5 million by 2020, and installed stationary fuel cell capacity of 2,100 MW by 2010, with 10,000 MW by 2020.

The European Unions funding of hydrogen and fuel cell R&D and demonstration in the EU Fifth Research Framework Programme (1998-2002) amounted to 130 million. This may increase to 250-300 million in the Sixth Framework Programme (2002-2006). To this must be added public support in individual Member States which, in total, has typically been in the same order as the Commissions programmes. Thus, total EU spending on hydrogen and fuel cell R&D could, as things currently stand, be around one third that requested in the US and perhaps half that in Japan. The US and Canada are well advanced in the preparation of roadmaps for the introduction of hydrogen and fuel cells: US: National Hydrogen Energy Roadmap

http://www.eere.energy.gov/hydrogenandfuelcells/
Canada: Canadian Fuel Cell Commercialisation Roadmap

http://strategis.ic.gc.ca/epic/internet/inmse-epe.nsf/vwGeneratedInterE/Home

Annex

High level group on hydrogen and fuel cells technologies

Organisation Air Liquide Person Daniel Deloche Position Vice-President Space and Advance Technical Division Managing Director Europe and Transportation Programs Chairman General Director Vice President for Research Body and Powertrain, Chief Environmental Officer President Member of The Board of Directors Member of Parliament of Iceland Executive Director Executive Vice President of Norsk Hydro and CEO of Norsk Hydro Oil and energy President and Chief Executive Officer Vice-president of Research, Renault SA Chairman and CEO Rolls-Royce Fuel Cell Systems Ltd Chief Executive Officer of Shell Hydrogen President Stationary Fuel Cell Division

Ballard Power Systems Andr Martin

CEA CIEMAT Daimler-Chrysler

Alain Bugat Csar Dopazo Herbert Kohler

ENEA FZJulich Iceland Johnson Matthey Norsk Hydro

Carlo Rubbia Gerd Eisenbei Hjalmar Arnason N.A.P. Carson Tore Torvund

Nuvera Renault Rolls-Royce

Roberto Cordaro Pierre Beuzit Charles Coltman

Shell SiemensWestinghouse Solvay Sydkraft

Jeremy Bentham Thomas Voigt

Leopold Demiddeleer Lars Sjunnesson

Solvay Corporate R&D Director Director of Corporate R&D and Environment President President and Chief Executive Officer

UITP Vandenborre Technologies

Wolfgang Meyer Hugo Vandenborre