Part 2
Hy-Politics – political considerations shaping the evolution of clean hydrogen policy
Summary of the use case in Italy
In December 2019, the Italian Government officially released the Integrated National Plan for Energy and Climate to implement the Regulation EU 1999/2018 which sets binding targets as energy efficiency, renewable sources and reduction of CO2 emissions to be achieved by 2030.
Currently, in Italy, hydrogen is mostly used in chemical and metallurgical industries. However, the main share of hydrogen production originates from the conversion of fossil fuels. The purpose of the Plan is to promote the use of green hydrogen. The main use case for hydrogen is the decarbonisation of commercial transportation. The Plan also mentions the role of hydrogen for energy storage, in particular power to gas. Furthermore, the Plan aims to employ hydrogen in the electric grid and gas infrastructure. In this regard, green hydrogen generated by electrolysis has the advantage of being usable in the existing gas infrastructure. The Plan's objectives in relation to the transition to green hydrogen would be facilitated by the higher availability of renewable energy plants and transportation pipelines connecting northern Africa to southern Italy for the importation of hydrogen at a lower cost.
In October 2019, the Minister for Economic Development delivered a speech at “The Hydrogen Challenge – 2019 Global ESG Conference”, an event organised by Snam and other stakeholders of the energy sector. The Minister stated that decarbonisation is the core element of the Italian energy strategy in which hydrogen will play a decisive role. The efficiency and conversion of the heat for buildings is fundamental to realise urban transformation. Furthermore, the Minister noted that different initiatives have been taken by the Government to implement the hydrogen strategy: a three-year system research programme for the electrical industry; international programme "Mission Innovation”; and a hydrogen roundtable. In all of them, the Government's purpose is to make hydrogen more convenient and bolster the use of green hydrogen.
In particular, the hydrogen roundtable outlines a set of objectives for the development, transport, storage and reuse of hydrogen. The group has also received 31 projects, of which nine are for transport use and 12 for storage and production. The final goal of the initiative is to create, alongside the relevant stakeholders, a national alliance for the use of hydrogen in industry.
Examples of demonstration/feasibility projects in Italy
Industry
Snam: Use of the grid to transport hydrogen. In 2018, SNAM S.p.A (“SNAM”), launched a project called “SNAMTEC” – Tomorrow’s Energy Company, aimed at increasing energy and operational efficiency, reducing pollutant gas emissions and promoting innovation in the energy sector. Among the initiatives included in the SNAMTEC project, was a trial to introduce a quota of 5% of hydrogen in the energy mix relating to two industrial plants in the Campania region for a period of a month. The trial proved that the introduction of even a small portion of hydrogen in the energy mix would allow a substantial reduction in carbon dioxide emissions (approximately 2.5 million tons per year).
Eni: In March 2019, ENI S.p.A. (“ENI”) signed an agreement with the National Consortium for the Collection, Recycling and Recovery of Plastic Packaging, to develop a research project aimed at producing hydrogen and high-quality biofuels from non-recyclable plastic packaging waste. ENI is undertaking a strategic plan that will allow it to reduce absolute carbon emissions by 80%, by 2050.
Maire Tecnimont and ENI: Since 2019, ENI and NextChem, the Maire Tecnimont Group’s subsidiary for green chemistry, have entered into several partnership agreements to conduct engineering studies with the aim of developing and building gas production plants from non-recyclable plastic packaging waste. The partnership agreements provide for the development of new waste-to-hydrogen production plants in Venice and in Taranto, a waste-to-methanol production plant in Livorno.
Transport
CNH Industrial: transport of hydrogen in partnership with Nikola, an American company. The final goal is to produce battery electric vehicles and fuel cell electric vehicles for the European market.
Landi Renzo: mobility solutions based on hydrogen fuel.
Alstom: In June 2020, Alstom signed a five-year agreement with SNAM aiming to develop hydrogen-powered trains and related technological infrastructure . In light of this, for the first time, hydrogen fuelled trains will be introduced in the Italian rail network.
ENI: ENI has entered into partnerships with Toyota aimed at developing hydrogen fuelling stations and encouraging hydrogen powered vehicles in Italy.
Ferrovie dello Stato: On 20 October 2020, Ferrovie dello Stato Italiane S.p.A. (the Italian State-owned railway operator) and SNAM signed a Memorandum of Understanding to evaluate the technical and economic feasibility of the development and diffusion of hydrogen rail transport in Italy.
Energy
Saipem: The group’s commitment will be focused in particular, on the production of green hydrogen (e.g. by improving the efficiency of electrolysis), the storage and transport of hydrogen, its use and its injection into gas networks. (reserved reproduction).
Enel Green Power: In January 2019, Enel Green Power (Enel Group’s renewables subsidiary) and the Municipality of Lipari entered into an agreement for the building of a new solar PV and green hydrogen energy storage plant on the Island of Stromboli.
SGI: In March 2019, the National Agency for New Technologies, Energy and Sustainable Economic Development (“ENEA”) and the Società Gasdotti Italia (“SGI”), an Italian gas transportation company, signed a framework agreement to develop a “Power to Gas” pilot project using green hydrogen. The hydrogen can then be used for several purposes, e.g. industry, transport and energy.
Green vs. blue
There is no common view amongst leading Italian industrials as to whether green or blue hydrogen should be the focus of the hydrogen strategy:
- Blue hydrogen: Eni and Snam wish to pursue their sustainability goals without generating losses from the large investments made in recent years in gas pipelines and gas fields located in the Mediterranean.
- Green hydrogen: Enel firmly supports the idea of a new way of producing hydrogen with low impact on the environment. The position is in line with the company’s green strategy. In addition, Enel disagrees to grant incentives to companies that rely on the use of blue hydrogen as it is not a ‘clean’ form of energy.