G7 launches Hydrogen Action Pact. Will offshore wind help reach its ‘green’ ambitions?

The Group of Seven (G7) has launched the G7 Hydrogen Action Pact (G7-HAP), a joint initiative on low-carbon and renewable hydrogen, and its derivatives such as ammonia. The pact comes on the heels of the recently signed declarations through which some of the seven countries vowed to up their energy transition game and entered collaborations on offshore wind and green hydrogen, the latest being the one signed between Germany and the U.S.

The climate, energy, and environment ministers of of Canada, France, Germany, Italy, Japan, the UK, and the U.S. met on 26 and 27 May in Berlin to discuss, align and take action on plans to accelerate energy transition.

The ministers concluded the meeting with a communiqué containing commitments, recognitions, and plans to help reach the goals from the Paris Agreement, with the most notable commitments made on coal phase-out and ending direct public financing of international fossil fuel projects.

Among other things, the minsters launched the G7 Hydrogen Action Pact (G7-HAP), saying Power-to-X, low-carbon and renewable hydrogen, and its derivatives such as ammonia play a central role in achieving net-zero emissions and energy security.

“Ramping-up global markets and supply chains for low-carbon and renewable hydrogen and its derivatives is a key enabling step towards a full decarbonisation of our economies. This need has become even more prevalent given the current geopolitical turmoil and disruptions, which led to record-high energy prices and a severe risk for our energy security”, the communiqué states.

The action plan comprises six points, the first being a commitment to accelerate the development of low-carbon and green hydrogen, and other Power-to-X value chains both domestically and at global scale, notably in hard-to-abate sectors.

To achieve this, the G7 ministers have pledged to speed-up the shaping of regulatory frameworks and common standards, and confirmed their financial commitments for the market ramp-up.

Under the G7-HAP, the seven countries will also help identify and close existing gaps for the ramp-up of green hydrogen supply chains beyond G7, exchange best practices on low-carbon and renewable hydrogen production based on sustainability criteria and facilitate dialogue on the geopolitical implications of an emerging global hydrogen market.

The minsters also stated they would support the role of low-carbon and renewable hydrogen and its derivatives in the decarbonisation of natural gas infrastructure and for zero-emission thermal power generation.

Accelerating the buildout of green hydrogen production infrastructure inevitably involves raising the renewable energy targets and accelerating the deployment of new renewable energy projects, which the G7 ministers also emphasised in their joint statement.

Some of the coastal countries will achieve this by adding new and massive offshore wind farms to their mix of renewable energy infrastructure, which can provide great amount of electricity needed to power green hydrogen production.

In the case of G7 countries, new commitments on both offshore wind and hydrogen have been made by some of them just hours and days before the energy minsters’ meeting in Berlin.

Namely, on the sidelines of the G7 meeting last week, German and U.S. officials signed a joint declaration on partnering in the area of climate and energy, and established four working groups, two of which are specifically dedicated to offshore wind and hydrogen.

The offshore wind working group is currently drawing up a joint strategy paper on transatlantic cooperation, including on the prevention of capacity shortages and on the sharing of expertise, with a joint workshop on hydrogen certification to also take place in June as part of the two countries’ new cooperation on hydrogen.

For offshore wind, both countries have set targets of 30 GW by 2030, the U.S. as the Biden-Harris Administration took over the steering wheel at the beginning of 2021, and Germany last month as part of the recently passed “Easter Package”.

Germany is also one of the four countries that signed the Esbjerg Declaration earlier this month, under which it will, together with Belgium, Denmark, and the Netherlands, jointly work toward having 65 GW of installed offshore wind capacity by 2030 and 150 GW by 2050.

The four countries said their offshore wind targets would support the ambitions for green hydrogen production of the EU (a non-enumerated G7 member), and that they had set combined green hydrogen targets of about 20 GW of production capacity by 2030, with a view of expanding this even further for 2050.

Last year, Germany also announced plans to auction off sites in its North Sea Exclusive Economic Zone (EEZ) for the purpose of producing green hydrogen offshore, with auctions expected to start as early as this year.

When it comes to hydrogen, the U.S. is currently the world’s second largest producer and consumer, operating more than half of the world’s installed pipelines.

Canada, albeit later than others, has also joined the offshore wind-to-green hydrogen discussion as the country’s government and that of Nova Scotia recently announced their intention to refresh and expand the mandate of the their offshore energy regime, and further collaborate on establishing a competitive offshore renewables sector expected to position Nova Scotia as ”a world leader in offshore wind and clean hydrogen production.”

As for France, the country is a few steps away from getting its first commercial-scale offshore wind farm and is also home of the world’s first offshore wind-to-hydrogen system.

Japan, which is among the leaders in floating wind project, has also started to see offshore wind-to-hydrogen technology and project proposals emerging, with several partnerships and initiatives launched over the past couple of years.

Still, the most advanced of the G7 countries in this regard is the UK, the second in the world in terms of installed offshore wind capacity (beaten by China last year) and also has several offshore wind-to-hydrogen projects proposed by multiple big names from both oil and gas and offshore wind industries.

Last year, the UK government announced it would increase the frequency of auctions for funding through the Contracts for Difference (CfD) scheme to every year rather than every two years, starting from March 2023.

Scotland is also on the way to holding its new Innovation and Targeted Oil and Gas (INTOG) offshore wind leasing process which, besides the electrification of oil and gas assets, will allow for innovative projects to demonstrate their technology, such as for green hydrogen, in Scottish waters and offer the potential for clean energy from offshore wind to support North Sea decarbonisation.