The European hydrogen geostrategy has just turned around with the emergence of the Netherlands as a new and ambitious player. The country's plans are already known, but in just two days and with the backing of the King of the Netherlands, Willem-Alexander, it has closed important agreements with Cepsa and Iberdrola to take the hydrogen produced in Spain to the port of Rotterdam by ship. With these moves, he anticipates H2Med, the great project between Spain and France to connect the two countries with a hydroduct, and raises a big question: has he dealt a mortal blow to the tube between Barcelona and Marseille?
Cepsa's answer is no. The company has just announced the construction of the largest ammonia factory in southern Europe to transport green hydrogen by ship to the Netherlands. It will invest 1,000 million, which is added to the 750 million that Iberdrola, as it said on Tuesday, will dedicate to another plant with similar purposes.
"The maritime corridor and the H2Med are complementary. I don't see them as competing routes," said Cepsa's CEO, Maarten Wetselaar, from Algeciras. He did so in the presence of the top executives of Yara, the Norwegian company that will be in charge of buying Cepsa's ammonia and distributing it from Rotterdam to industrial clients in the Netherlands, Belgium, Germany and Denmark.
Spain is considered a future European power for the production of green hydrogen thanks to the availability of renewable energy. To transfer this volatile fuel to Europe, the big project continues to be the H2Med hydroduct, to which Spain and France have given the go-ahead and whose capacity will be two million tons per year, equivalent to 10% of the expected consumption in the EU. Enagás calculates that a Spanish network of hydroducts will cost 7,000 million euros.
The goal is to have H2Med up and running by 2030, but companies seem to be in a hurry and have preferred to embrace the Dutch option, which is the fast track to inject hydrogen into the industrial poles of northern Europe. "To fill a pipeline in the south of Spain with hydrogen, we need a lot of hydrogen, and we're still just getting started," Cepsa's CEO said in reference to H2Med.
However, taking the hydrogen by ship to the Netherlands is more expensive, among other things because it requires various industrial processes. Hydrogen must be manufactured by separating the water molecules with electrolysis thanks to renewable electricity. Then you have to extract nitrogen from the air through a similar process. Subsequently, nitrogen must be added to the hydrogen to create the liquid ammonia that travels by ship and, to top it off, the ammonia must be transformed back into hydrogen at the port terminal.
Cepsa indicates that the trip by boat is easier because the ammonia is transported at -33 degrees Celsius and the hydrogen by tube, at -235 degrees. However, she admits that the tube ends up being cheaper. "Moving hydrogen by ship costs between 1.5 and 1.75 euros per kilogram, and moving it by pipeline should be less," says her CEO.
The conclusion is that "when the tubes are in place, it is possible that maritime traffic will decrease", but that will not mean the decline of the ammonia plants, since "there will be other places in Europe that we can serve by boat". Cepsa also has in mind "customers in Japan and other parts of the world to supply them", and recalls that ammonia can also serve as fuel for the ships themselves.
The truth is that the Netherlands has just scored an important goal in its objective of replicating with hydrogen the success of the TTF gas market, invented in the country and turned into a world reference by marking the international prices of this hydrocarbon. If France and Germany get confused, the Dutch ports can be the great door for green hydrogen and also the market where its price is marked.
Apart from announcing investments of 1,000 million in the largest ammonia plant in southern Europe to transport hydrogen by ship to Rotterdam, Cepsa has also signed a couple of agreements with companies today to guarantee this activity. Added to the contribution foreseen by the future Iberdrola plant, they add up to almost a million tons, that is, almost half of the hydrogen that fits in the H2Med. A volume capable of marking the pace of this fledgling industry.
