EHB Implementation Roadmap: Public support as catalyst for hydrogen infrastructure European Hydrogen Backbone
Investors are willing to invest in bankable projects but require guarantees. — Investors seek projects with firm end-user commitments, which are difficult to obtain in the early stages of market ramp-up. Pipelines sensibly built to accommodate future demand come with early-stage financial risks.
The EHB is most cost-effective when sized to serve mature-market volumes, preventing expensive expansion projects and infrastructure-related bottlenecks as the hydrogen market develops. — Consequently, generating sufficient revenue in the first five-to-ten years of operation poses challenges for forward-looking pipeline developers, with low initial revenues discouraging private investment despite the decades-long durability of decarbonisation benefits.
TSOs are pushing forward with build-out but should not be required to bear all financial risk. — Public risk sharing is needed to enable investment in the construction and operation of pipeline projects, rather than disincentivising proactive TSOs by requiring them to bear the risk alone. — Example: A €5 billion cross-border pipeline project requires an initial investment of €125-250M for developmental studiesa to help mature the project and make it bankable for investors.
Hydrogen and the EHB are crucial enablers of the European energy transition. — A successful early rollout of hydrogen infrastructure will be key to achieving Europe's decarbonisation targets by 2030 and beyond. — Pan-European hydrogen infrastructure supports the scale-up of renewable energy and bolsters security of supply, with connectivity between supply and demand regions directly contributing hundreds of billions of euros in savings.
