KYIV

Ukraine, urged on by its German partners, is pressing rapidly for the development of a hydrogen industry as a way to meet its own needs and supply Western Europe with energy within the framework of the European Union’s “green deal” drive for decarbonisation and zero emissions by 2050.

The key to tackling all these issues is the development of “green hydrogen” – produced by electrolysis powered by renewable energy sources – wind, solar and nuclear — despite clear impediments — it is far more costly than the more widespread “blue hydrogen” produced on the basis of a process known as steam reforming of methane in natural gas, accompanied by “capture” and underground storage of emissions. Despite hopeful statements by officials to the contrary, hydrogen produced in Ukraine may not be transportable westward to waiting markets without a major and very expensive overhaul of the country’s current pipeline system.

But against a background of skyrocketing gas prices and the completion of Russia’s Nord Stream 2 gas pipeline under the Baltic Sea to Germany – denounced by President Volodymyr Zelensky and others as a threat to national security — government ministers, industry leaders and scientific groups have displayed seemingly boundless enthusiasm for rapid development of a “green” hydrogen industry.

“Thanks to ‘green’ hydrogen, Ukraine could become what Russia is to Germany in the gas sector,” Foreign Minister Dmytro Kuleba told a talk show on ICTV television this week. “This is truly a historic opportunity, and it is very important to not waste it but build a relationship between Ukraine and Germany that will bring us to the forefront in their both foreign and domestic policy.”

Germany long backed Nord Stream 2, downplaying U.S. misgivings,  but has pledged to support Ukraine both as a gas transit country after a contract carrying Russian gas through Kyiv’s pipeline network expires in 2024 and has pledged compensation to Ukraine ranging from $175 million to $1 billion in a “green fund” to make up for the lost transit revenue and to pursue “green economy” initiatives.

MERKEL’s VISIT PROVIDES IMPULSE

In August, during a visit to Ukraine by outgoing German Chancellor Angela Merkel, Ukraine state gas and oil company Naftogaz and Germany’s RWE Supply & Trading gas trader signed a memorandum of understanding in the field of the hydrogen economy for the production and storage of hydrogen and its export to Germany alongside the full value chain of green hydrogen and derivates like ammonia. This was seen as the initial jolt needed to get the notion of a hydrogen industry rolling.

“We are interested in pilot hydrogen projects with German partners to start joint production and transit of hydrogen to Germany and Europe,” Ukrainian Prime Minister Denys Shmyhal said during his meeting with Merkel. “Several Ukrainian project proposals on hydrogen have been submitted to the German side for consideration.”

Within weeks, a new National Association Working Group within Hydrogen Europe held its inaugural meeting and pledged to draw up projects and secure funding within the framework of Hydrogen Europe – an alliance of science, industry and business groups committed to the development of a pan-European hydrogen industry.

“One of the important issues is to determine the routes of hydrogen transportation from Ukraine to Germany. The simplest and cheapest way is to use a gas transmission system,” Olexander Riepkin, president of Ukraine’s Hydrogen Council said on his group’s website. “However, there is no direct pipeline between our countries, so it is necessary to involve, for example, Poland, Slovakia or Romania. But no one knows what the situation is with the gas pipeline in these countries. That is why it is now important to take into account the establishment of partnerships between countries on this issue and to create new hydrogen routes.”

More initiatives followed rapidly.

Last week, the company overseeing Ukraine’s gas pipeline network clinched an agreement with companies in the Czech Republic, Germany and Slovakia to create a “hydrogen highway” to send green hydrogen produced in Ukraine westward to European Union consumers. A statement said the four companies saw Ukraine as having “good conditions for the production of green hydrogen (for shipment) through Slovakia and the Czech Republic to areas of the EU with high demand for hydrogen”

The Ukrainian Hydrogen Council estimates $70 billion of investment will be needed to make hydrogen competitive.

DOUBTS OVER PIPELINE NETWORK

But there are serious doubts, not least from Russia, about whether the resources offered to Ukraine will be sufficient to get the industry off the ground and whether Ukraine’s gas transport network, made up of 37,000 km of lines, some several decades old, is suitable for hydrogen transport.

“What Ukraine has been promised in connection with the launch of Nord Stream 2 is very little in order to create a full-fledged hydrogen industry,” Stanislav Mitrokhovich of the National Energy Security Fund told Russia’s Radio Sputnik. “Hydrogen must be exported through pipelines specially built for that purpose or having gone through modernisation. This again requires big investments. Who is going to invest without guarantees that the pipelines can be used for shipments?”

But the European Union has shown optimism about prospects for just such an industry in Ukraine in its base document dubbed the European Hydrogen Strategy, in which it describes Ukraine as a country with a high potential for producing low-carbon hydrogen. Ukraine, it said, could provide one-eighth of all the EU’s demand for hydrogen. And tests on sending hydrogen through the pipeline network are proceeding.

Dr Frank Umbach, research director at the European Cluster for Climate, Energy and Resource Security at the University of Bonn in Germany, said Ukraine’s attraction lies in the existing and potential infrastructure structure and its vast storage network, Europe’s second-largest after Russia.

“It is not surprising that German stakeholders have recognised Ukraine’s potential, not just in compensation for the Nord Stream-2 deal,” Umbach wrote on the euractive.com website. “Ukraine was the only European country that was mentioned in Germany’s hydrogen strategy of January 2020 and plays a major role in Germany’s H2 Global government initiative.”