Croatia has 32 pilot projects in progress for green hydrogen

A total of 32 green hydrogen projects are underway in Croatia at different stages of maturity, according to the Study of the Development Plan and Implementation of the Croatian Hydrogen Strategy by 2050.

Croatia is in a good position and has key strengths for establishing hydrogen production and use, reads the study commissioned by the Croatian Hydrocarbon Agency.

The authors said the implementation of the development plan would allow Croatia to achieve benefits for the national economy and the climate.

Out of 32 hydrogen projects in progress, six are part of the North Adriatic Hydrogen Valley. After reviewing them, the authors concluded that most don’t form integrated hydrogen ecosystems.

The total amount of produced and consumed renewable hydrogen in Croatia in 2030 will be 26,400 tonnes

Only seven projects, with an estimated combined output of 975 tonnes of hydrogen per year, are designed to both produce and consume it, thereby mitigating the risk associated with the lack of a hydrogen market.

On the other hand, the capacity of hydrogen production projects is approximately 33,750 tonnes per year in total, but they lack clear indications of potential buyers, the study reads. Projects focused on hydrogen consumption are estimated at 382 tonnes per year.

However, the demand expected in the following years easily supports even higher hydrogen production intentions, the authors stressed.

The total amount of renewable hydrogen produced and consumed in Croatia, for the transport, industry, residential and commercial sectors as well as for the production of power and heat by blending with natural gas, is 26,400 tonnes in 2030, followed by 97,100 tonnes in 2040 and 243,200 tonnes in 2050, according to the document.

The transport sector offers the most suitable preconditions for pilot projects

Based on the analysis, the transport sector offers the most suitable preconditions for initiating hydrogen pilot projects in Croatia. The primary segment would be road transport, more precisely public transport, possibly with maritime and rail transport.

At the earliest stage of the development of the hydrogen market, it can be expected that public transport in the largest urban centers of the country: Zagreb, Split, Osijek, and Rijeka, will be amid the first adopters of hydrogen technology, the study underlines.

Due to the high prices of renewable hydrogen, maintaining the same affordability level in public transport might pose a challenge. In later stages, the affordability of clean public transport will be achieved by imposing CO2 taxes on fossil fuel counterparts. However, the authors suggest that in the early stages of the pilot project rollout, reducing the price of renewable hydrogen might be a more straightforward solution.

A new national model for incentivizing renewable hydrogen production might be needed

It requires a new national model for incentivizing renewable hydrogen production, they added.  The model could be based on well established models for incentivizing renewable electricity production, for example contracts for difference (CfD). The difference or the premium would be calculated as the gap between the production cost of renewable hydrogen and its reference market price.

The reference market price would be the level at which hydrogen is competitive with its fossil alternatives. Assuming that the prices of CO2 emissions increase over time, a reduction in the required amount of premium can be expected, according to the study.

The premium amount is expected to be in the range of EUR 3.5 to EUR 5 per kilogram of renewable hydrogen produced. Funds necessary in 2030 to incentivize the use of renewable hydrogen in the transport sector would amount to EUR 20 million, the study reads.