5 Oktober 2022 – Green hydrogen is set to become the most important energy carrier for the European Union and EU steel producers in the future. But is hydrogen without green water green at all? Raw materials in stronger demand again at the start of the 4th quarter. Natural gas prices fall by more than 50%.
Commodities in stronger demand again at the start of the 4th quarter
At the start of the 4th quarter of 2022, demand for commodities is clearly stronger again. According to a recent analysis by Deutsche Bank, investors also seem to be more willing to take risks again, which is probably due in part to the somewhat weaker dollar. Silver in particular increased in price by around nine per cent on Monday. In the medium term, Deutsche Bank sees upward potential for many commodities.
European stainless steel demand picks up, prices rise
According to analysts, European demand for stainless steel is also picking up, which is also leading to rising prices.
Natural gas prices down by more than 50%
Looking at the ICE Dutch TTF Natural Gas Futures, natural gas prices have fallen by more than 50% since their extreme peak in mid-September 2022. In particular, mild autumn weather and full gas storage facilities in the European Union have caused natural gas prices to fall.
Green hydrogen for green steel from green water?
The European Union’s Green Transformation relies to a large extent on the production and use of green hydrogen. European steel producers in particular have declared clean hydrogen to be the core raw material for reducing their CO2 emissions, alongside steel and stainless steel scrap. Projects, especially in the steel industry, to be supported with billions in subsidies from the EU.
Political PR ignores water
One issue that is being ignored by the European Commission, but also by member states like Germany, is the need for large amounts of clean water for the production of green H2. A fact that we have already pointed out several times and which is currently also being taken up by major news agencies, such as Reuters.
Are politicians aware of the water problem?
Germany, or rather the current and previous federal governments, are well aware of the problem, even if they do not want to or cannot openly admit it. For water is a scarce commodity in Germany, just look at the state of Brandenburg, where a gigafactory for EV batteries was built out of the ground, but now the water supply cannot actually be guaranteed due to scarcity. The first reports have now come from Australia that companies that wanted to produce hydrogen had to abandon their plans because there simply wasn’t enough water.
Germany shows the way
One only has to look at the German hydrogen strategy of the former Federal Minister of Economics, Peter Altmaier. Or the PR trip of the current Green Federal Minister of Economics, Robert Habeck, to countries that have important core components for the production of hydrogen – energy in the form of fossil fuels such as natural gas, energy-intensive desalination plants and mostly immature environmental standards. Mostly, the availability of sun as an alternative energy source is cited for this, while the problematic production of water with desalination plants is discreetly omitted.
Water scarcity in Europe
Water is not only scarce in Germany, Italy or the European Union. Worldwide, the availability of clean drinking water is declining. More and more water is now being extracted from the world’s oceans by desalination in order to meet the ever-increasing demand. At the same time, however, this leads to massive environmental damage, as the brine is either dumped directly into the sea or results in huge and very dirty salt mountains.
9 litres of water per 1 kg of H2?
In most publications, from governmental sources, but also consultants and internationally recognised authorities, such as the International Energy Agency, usually speak of only 9 to 10 litres of water being needed for 1 kg of hydrogen.
9 litres only partially correct
This is also correct to the extent that about this much pure water is needed in the final processing step of H2 production. But what is the demand for water before that? The official side prefers not to say. Calculations assume that at least 24 litres of drinking water are needed. Other consulting firms even assume 60 to 90 litres of water per kg of hydrogen.
300 litres of salt water for 1 kg of H2?
If salt water is used, and this was a real shock, according to calculations by Reuters based on data from the University of Delaware, at least 300 litres of water even have to be desalinated on average to produce 1 kg of H2 from it.
Green hydrogen at the expense of the world’s oceans?
Green hydrogen can help create the green transformation. But the reality in water supply seems to be different. Even if the shift from fossil to alternative energy sources like solar and wind can save CO2 and other Green House Gases (GHG), at the same time the production of water has to be increased significantly at the expense of the environment.
Producing countries for hydrogen not in Europe?
It comes as little surprise, then, that the future producer countries for hydrogen are hardly to be found in Europe. On the German coasts of the North and Baltic Seas, desalination plants in the middle of nature reserves and world heritage sites will not be feasible.
And even the attempt by the European steel industry to have dirty hydrogen secretly exempted from the Carbon Border Tax (CBAM) seems to have failed for the time being due to the resistance of the EU parliamentarians.
Where is the green water?
With all the focus on the shift towards a green future, one must not forget that there is more than just green energy as a raw material and why the European Commission is frantically trying to keep the inclusion of CO2 emissions from raw materials optional. So the question remains where will the green water for green hydrogen for green steel come from?
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.