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Hydrogen: National Strategy and Guarantees of Origin 

by João Marques Mendes, Joana Brandão, Rui Vasconcelos Pinto, Hugo Aparício

Published: August, 2020

Submission: October, 2020

 



Of the Council of Ministers Resolution no. 63/2020, which approved the National Hydrogen Strategy, was published on 14 August 2020.


Also, on 17 August 2020, Decree-Law no. 60/2020 was published, which, following the National Hydrogen Strategy, establishes the mechanism for issuing guarantees of origin for low carbon gases andfor gases of renewable origin.


1. National Hydrogen Strategy


Following our informative note about the version of the National Hydrogen Strategy (henceforth "EN-H2") subject to public consultation, the final version of EN-H2 was recently approved. Thisinformative note is intended to convey the main novelties and aspects of the final version of the strategy.


The final version of the Strategy maintains the focus on green hydrogen - produced through the electrolysis of water using renewable energies–as a fundamental vector for the decarbonization of the economy, particularly in sectors where electrification is unfeasible or excessively costly.


It is crucial that Portugal, according to the Strategy, present particularly competitive conditions to produce green hydrogen, depending on its location and conditions of renewable energy generation at reduced prices.


Phases


EN-H2 sets out three phases for the development of the hydrogen industry in Portugal:


  • The first, to take place between 2020 and 2023, aims to develop the regulatory framework necessary for the implementation of the first projects of variable scale and in various sectors;
  • The second, to be carried out between 2024 and 2030, will be geared towards the consolidation of the national framework, the strengthening of national competences in the sector, as well as the roll-out of projects at national level;
  • The third, to take place between 2030 and 2050, will seek to achieve full development of the national hydrogen market, including export and internationalisation dimensions.

The Strategy defines the following measures and actions to be taken in each phase


Targets


Ambitious targets are set for the development of the hydrogen sector in Portugal, in its numerous possible uses. For the 2030 horizon, the targets set for the incorporation of green hydrogen are the following:


  • 10 to 15% injection into natural gas networks;
  • 2% to 5% energy consumption in industry;
  • 1% to 5% in the energy consumption of road transport;
  • 3% to 5% energy consumption in domestic maritime transport;
  • 1.5% to 2% in final energy consumption.

In terms of hydrogen production and distribution facilities, the Strategy aims to ensure that by 2030 the following capacity is developed:


  • 50 to 100 filling stations;
  • 2 to 2.5 GW of capacity in electrolysers.

Concerning investment figures and public support (of European and national origin), ambitious forecasts for 2030 are defined:


  • 7,000 to 9,000 million euros of investment in new projects (in industry, transport, energy, research and development);
  • 400 to 450 million euros of investment support through European funds (PT2020, PT2030);
  • 500 to 550 million euros of production support.

Depending on the achievement of these targets, the following benefits are estimated for the development of the hydrogen sector in the decade 2020-2030:


  • 380 to 740 million euros of reduction in natural gas imports;
  • 180 million euros of reduction in ammonia imports;
  • 8,500 to 12,000 new jobs;
  • 6 to 8 Mt CO2 emissions reduction;
  • 1% consumption of treated wastewater.

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