The hydrogen market - France (2023)

1.2 A bright future for the global hydrogen market

In ****, the global hydrogen market is estimated at $***.** billion, and is expected to grow at a CAGR of *.*% until ****.

Global hydrogen market development projections World, **** - ****, in $ billions Source: ****

Growing demand for cleaner fuels and increasingly stringent government regulations to reduce the use of petroleum products are driving the adoption of hydrogen as a new energy source. These trends should play a significant role in the penetration of hydrogen into new markets. In addition, global electricity demand is expected to increase by almost two-thirds over the forecast period. In addition, the focus on distributed energy and utility projects should support the growth of the hydrogen industry.

The decarbonization of the global energy system rests on several pillars, including energy efficiency, behavioral change, electrification, renewable energies, hydrogen, hydrogen-based fuels, and CCUS (***). Hydrogen plays a significant role in the "net zero emissions" scenario, thanks to its growing share of cumulative emissions reductions. Its growing demand, coupled with the adoption of cleaner technologies for its production, enables hydrogen and hydrogen-based fuels to make an important contribution to the decarbonization of sectors such as heavy industry and long-distance transport.

Cumulative emissions reduction by mitigation measure in the "zero emissions" scenario World, **** - ****, in Source: ****

Hydrogen ...

1.3 A fast-growing French market

Industrial hydrogen production in France totals over ***,*** tonnes a year. The main uses are desulfurization of petroleum fuels (***) account for **% of this production. It generates **.* Mt of CO* emissions, representing around *% of French national emissions [***].

No information is available on the size of the French market, but we can estimate it using the annual production and price per kilo of hydrogen given in *.*. As we know that electrolysis accounts for only *% of hydrogen production, the price of hydrogen produced by electrolysis is much higher than the average, enabling us to refine our estimate:

Low estimate: *.** x French annual production x Low range of fossil hydrogen prices + *.** x French annual production x Low range of fossil hydrogen prices + *.** x French annual production x Low range of fossil hydrogen prices*.** x French annual production x Low range of electrolytic hydrogen prices = *.** x ***,*** x *,*** + *.** x ***,*** x *,*** = *.*** billion euros

High estimate:*.** x French annual production x High range of fossil hydrogen prices +*.** x French annual production x High range of electrolytic hydrogen prices = *.** x ***,*** x *,*** + *.** x ***,*** x **,*** = *.*** billion euros

The French hydrogen market was thus estimated at between *.* and *.* billion euros in ****.

The French Ministry of Ecology refers to a scenario drawn up by McKinsey, ...

1.4 France, a country heavily dependent on hydrogen imports

To study French foreign trade in hydrogen, we use the HS code ****** for hydrogen.

Exports:

French hydrogen exports by value France, **** - ****, in $ millions Source: ****

Between **** and ****, annual French hydrogen exports experienced several variations. A significant drop was observed between **** and ****, with a decrease of $*.*** million, representing a decline rate of **.*%. Between **** and ****, exports fell again, but at a slower rate, with a drop of $***,***, a rate of decline of **.*%. A slight increase was observed between **** and ****, with a rise of $**,***, representing a growth rate of *.*%. Finally, from **** to ****, exports rose sharply by $***,***, a growth rate of **.*%, to $*.** million.

Main countries buying French hydrogen World, ****, in thousands of $ Source: ****

By far the biggest importer of French hydrogen is Germany, with imports of nearly $*.* million in ****.Italy and Switzerland follow. Only two non-European countries feature in the top ** buyers:Australia and the United States.

Imports:

French hydrogen imports by value France, **** - ****, in $ millions Source: ****

French hydrogen imports saw a general downward trend between **** and ****, falling from $**.*** million in **** to $*.*** in ****, a drop of almost **%. However, this trend reversed in ****, with imports rising slightly to $*.*** million, an increase of **.*%. In ****, imports climbed significantly to $*.*** million, representing growth of ***.*% over the previous ...

2.1 France's main hydrogen customer sectors

Hydrogen demand in France is still dominated by traditional industrial uses. Indeed,the main market is the desulfurization of petroleum fuels (***).

Main uses for hydrogen France, ****, in Source: ****

These sectors should see their share of hydrogen demand gradually decline as other user sectors such as transport, power generation and heating develop.

The hydrogen sector is currently being boosted by national and European strategies, as well as by stringent regulations currently being applied or planned for the future, such as RED*, RED*, the border carbon adjustment mechanism and low-emission zones. As a result, players in the French industry have reaffirmed the target they set last year of consuming ***,*** tonnes of low-carbon or renewable hydrogen per year. ne per year by ****, in line with the"Ambition ****" reference scenario. Consumption volumes are to be distributed as follows.

Breakdown of consumption volumes by sector in the "Ambition ****" scenario France, ****, in Source: ****

The industrial sector would account for **.*% of low-carbon hydrogen use, notably in the refining, chemical (***) and diffuse industries. It can also be used to fuel new applications, via the decarbonization of the steel and heavy chemicals industries, the relocation of methanol production in France, and the establishment of a synthetic fuel production chain. The ...

2.2 Refining and fertilizer production, the two main uses for hydrogen

Refining:

Hydrogen has a special function in refining, as it removes sulfur from fossil energy sources, a process known as petroleum desulfurization. Introduced at high temperature and pressure, it reacts with the sulfur naturally contained in hydrocarbon molecules to form hydrogen sulfide (***), which is then removed. This makes hydrocarbons less polluting to burn and reduces their negative effects on health[***].

The refining and coking business (***) saw a marked decline between **** and ****, with a **.*% drop in the sales index. Between **** and ****, a recovery was observed, with a **.*% increase in sales. However, activity then fell until ****, reaching an all-time low with a sales index of **.*. Since then, the index has grown steadily, reaching a record ***.* in ****, completing a ***% growth compared to ****.

Coking and refining sales index France, ****-****, base *** in **** Source: ****

Fertilizer production:

Combined with nitrogen, hydrogen formsammonia, which is then used in fertilizer production.the manufacture of nitrogen products and fertilizers using hydrogen should also experience a phase of deceleration, against a backdrop of increased regulation and a preference for organic rather than chemical fertilizers.

Between **** and ****, the sales index for the production of nitrogen products and fertilizers fell slowly by **.*%. Since ****, however, the sales index has risen sharply to ***.** in ****, recording ...

2.3 Replacing traditional industrial sectors with innovative ones

Subject to an ambitious policy and substantial investment, new uses - such as mobility, new industrial processes or injection into gas networks- could gradually replace the traditional uses we mentioned earlier. However, this reversal in demand is likely to take place over the long term, and historical sectors are likely to remain in the majority until ****, according to Sia Partners.

The consultancy then proposes two scenarios for new hydrogen demand worldwide up to ****. A medium scenario from IRENA and an optimistic scenario from the Hydrogen Council.

Scenarios for global hydrogen demand linked to new uses by **** World, horizon ****, in millions of tonnes Source: ****

In the first scenario, we arrive at a hydrogen demand for these new uses of *.* million tonnes per year. In the more optimistic scenario, this would rise to ** million. by way of illustration, world production was ** million tonnes in ****[***].

In France, the government is also seeking to initiate this shift through the hydrogen deployment plan (***).

Hydrogen, if produced from renewable energies, makes it possible to :

Store solar or wind energy via a fuel cell, and release it when renewable energies are not producing. This is a key solution for smart-cities and off-grid zones, i.e. areas not connected ...

2.4 The growing use of renewable energies

Hydrogen can be used to store electricity, particularly that produced from renewable energies, and can also be used as a fuel in electric vehicles equipped with fuel cells. This energy carrier could therefore be an essential pillar of the energy transition, provided we decarbonize production, which today remains largely dependent on fossil fuels. Indeed, **% of French energy production comes from fossil fuels (***).

Renewable energies are widely acclaimed by the French. In fact, more than * out of ** French people say they are in favor of the bill to accelerate the production of renewable energies in France, which will be voted in in January ****, which aims to increase solar energy production tenfold, deploy ** offshore wind farms and double onshore wind turbine production by ****.

are you in favor or opposed to such a text in principle? France, January ****, in Source: ****

Thus, the development of renewable energies could contribute to the development of low-carbon hydrogen, or "green" hydrogen.in ****, France Hydrogène published a study entitled"Trajectoire pour une grande ambition hydrogène", proposing two scenarios. The first,"Ambition ****", envisages the deployment of renewable or low-carbon hydrogen production capacity reaching ***,*** tonnes by ****. The second,"Ambition+ ****", envisages an increase in these quantities to *,***,*** tonnes[***].

French gross ...

3.1 The hydrogen value chain

Source: ****

The hydrogen value chain can be broken down into several stages:

hydrogen production, which can be carbon-based or decarbon-based, depending on the raw material used. Most hydrogen today is produced from fossil fuels (***), but electrolysis is becoming increasingly popular; storage and transport: most often in gaseous form, hydrogen is stored in tanks or cylinders to facilitate transport by truck. Other methods are emerging, such as storage in solid or liquid form, or in underground cavities. As far as transport is concerned, it is conceivable that if the use of hydrogen becomes more widespread, pipeline transport networks will become increasingly common; the uses to which it is put: traditional uses remain in the majority, but new uses are seen as increasingly promising.

According to the report "L'hydrogène en France en **** - Une nouvelle ère industrielle" published by France Hydrogène, the hydrogen sector will account for **,*** jobs in ****, including *,*** direct jobs [***].the Stratégie nationale pour le développement de l'hydrogène décarboné en France (***) considers hydrogen to be a strategic industry. With a budget of *.* billion euros, this strategy aims to create a competitive low-carbon hydrogen industry over a **-year period. By ****, this initiative is expected to generate ...

3.2 Hydrogen production in France

Production methods :

France, aware of hydrogen's potential in terms of reducing greenhouse gas emissions and boosting competitiveness, was one of the first countries to actively support this sector. As of ****, resources have been allocated to promoting hydrogen through the Future Investment Program (***).

Currently, hydrogen produced from fossil fuels accounts for the majority of French production. In fact, **% is produced from natural gas, hydrocarbons or coal. Only *% can be attributed to electrolysis.

Hydrogen production sources France, ****, as a percentage of production volume Source: ****

Figures are a little dated, but have not been updated since.

Production is carried out by separating elements of which the H atom is a component.

The most economical and widely used process is steam reforming of natural gas (***) with steam at *** degrees. Energy efficiency is estimated at **-**%. The transformation process emits ** kg of CO*/kg H* produced, which is still the best balance with the reforming of biogas from biomass or waste recycling. * kilogram of dihydrogen represents **.* liters of dihydrogen at *** bar, or around ** kwH of energy. [***] Hydrogen is often the result of the production of other chemical elements, mainly refined products from hydrocarbons. This is known as "co-product" or "fatal" hydrogen. The hydrogen created can be ...

3.3 The difficulties of storing and transporting hydrogen

Hydrogen can only be stored and transported on one condition: by increasing its density.

Under conditions of atmospheric pressure and ambient temperature, it takes **m* to store *kg of hydrogen[***]. To remedy this shortcoming, hydrogen is stored and transported :

in gaseous form: hydrogen can be compressed from a few tens to *** or even *** bars in cylinders and tanks manufactured or sold by suppliers such as Faber cylinders (***). This is the most widespread form, especially for nomadic and transport applications; in liquid form at -***° C : a niche solution, as it requires a very large amount of energy; in solid form: notably by absorption in metal hydrides at low pressure. This invention saves compression energy and allows great flexibility in the quantity of products stored, from a few kilos to several tonnes. However, difficulties persist, and the aim today is to reduce costs while adapting the process to industrial applications.

New forms of storage are being developed, with underground storage in salt caverns. These cavities offer the advantages of high impermeability, extremely large storage volume, absence of micro-organisms likely to interact with hydrogen, and resistance to sustained injection and withdrawal cycles in terms of frequency and flow rate. However, this form of ...

4.1 Hydrogen, an energy carrier at a variety of prices

On Earth, hydrogen is essentially found in combined form - with oxygen in water, with carbon. Hydrogen is therefore not an energy source, but an energy carrier. It must be produced by extracting it from its compounds. Then, by bringing it into contact with other chemical elements, such as oxygen, it produces energy (***).

As we saw earlier, hydrogen can be extracted from natural gas, coal, hydrocarbons or even water through electrolysis. Only the latter process can make hydrogen a renewable energy source, so the price per kilo of hydrogen will vary according to the production method used.

Source: ****

Green" hydrogen is therefore much more expensive than "grey" hydrogen, costing between * and * times more on average than the most economical solution: steam reforming of natural gas.

4.2 Public authorities: essential support for the development of the hydrogen industry

The national strategy for the development of decarbonated hydrogen, announced by the French government on September *, ****, will benefit from * billion euros in public support through to ****. This initiative aims to guarantee France's technological sovereignty and deploy *.* gigawatt-hours of electrolyser capacity across the country. The hydrogen produced will be used to reduce carbon emissions from heavy mobility and the most polluting industrial sectors.

The France **** investment plan includes an allocation of *.* billion euros in public support, in addition to the aid already provided under the France Relance plan. The intention of this funding is to support structuring industrial projects that meet three priority objectives:

production of electrolyzers; development of essential equipment for hydrogen-powered mobility; hydrogen production to decarbonize industrial sites.

As part of a European initiative, ** member states and Norway have launched the construction of an Important Project of Common European Interest (***) on hydrogen in December ****. The aim of this project is to promote the development of the low-carbon hydrogen industry in Europe. By August ****, over *** projects had been submitted to the European Commission by the participating states. The Commission has reiterated the importance of this PIIEC, and the aim is to complete the evaluation of projects by the summer.

For example, ...

4.3 Hydrogen filling stations still unevenly distributed across France

When it comes to using hydrogen as a fuel, distribution is also of strategic importance, with refueling stations to be set up all over the country.in its review of the national hydrogen strategy, France Hydrogène is proposing a set of targeted measures to optimize the deployment of hydrogen in light commercial vehicles (***), regional distribution trucks and long-haul trucks by ****. these measures target the simultaneous development of vehicles and recharging infrastructure[***].

For the development of hydrogen-powered vehicles, the creation of a genuine distribution network for recharging vehicles appears to be the sine qua non condition for acceptance of this new mode of transport by professionals and private individuals alike. However, this requires very high levels of investment, which can only be made by very large consortia with common interests, or by public authorities, as is the case in Japan.

There are ** hydrogen stations in France, unevenly distributed across the country.

Source: ****

Of the ** French regions, four have no hydrogen stations at all. The two regions with the most stations are Île-de-France and Normandy, with eight each. There are two types of hydrogen station in France: *** bar and *** bar. These stations are operated by various players, including Air Liquide, ENGIE, McPhy, ...

5.1 France's energy transition law for green growth

The mobility plan :

As reported by Les Echos, the French energy transition law for green growth has required all companies with more than *** employees to set up a mobility plan for its employees since ****, making their daily commutes more efficient and less polluting.

Formerly known as the PDE (***) obliges companies to rethink the use of their car fleets and their impact on the environment.

TheADEME (***) website gives a few examples of measures that can be taken by companies:

promote the use of bicycles by setting up a bicycle room, showers for cyclists... ; encourage employees to take public transport; adapt work schedules and facilitate telecommuting; encourage employees to carpool.

This measure should result in a rethinking of mobility within large companies, with greater emphasis on car-sharing and cleaner mobility overall (***).

Detailed information on the regulations applicable to hydrogen, whether for production, storage, transport or distribution, is available on France Hydrogène's Vig'Hy website.

5.2 A greener French tax system

It may be interesting to take a look at the tax implications of purchasing or leasing vehicles for companies, using the information provided by Sesame LLD.

Current VAT

vAT on the purchase of private vehicles is not recoverable, except in the case of professions involving the purchase of a vehicle (***).

Taxes on company vehicles

If a company leases a private vehicle, it must pay a corporate vehicle tax (***). For any vehicle leased for more than ** days in a six-month period, this is calculated according to the vehicle'sCO* emissions per km and the pollutant emissions of the fuel consumed.

Vehicle registration taxes

A company that registers a vehicle must pay several taxes at the time of registration:

the regional tax, calculated on the basis of the vehicle's power and age; the flat-rate tax on the registration certificate, which must be paid for all commercial vehicle registrations; taxes on the most polluting vehicles, such as the ecological malus, calculated according to the vehicle's level ofCO* emissions ; the ecological bonus.

Companies that decide to lease an electric or hybrid vehicle that doesn't run on diesel fuel may be eligible for a subsidy known as the "bonus écologique". This aid is a financial subsidy for ...

6. Segmentation

• Mc Phy
• Hydrogenics
• Linde
• STEP (Hype)
• Symbio
• Ballard Power systems
• Toyota
• Faber Cylinders
• Forvia (ex Faurecia)
• Hydrogen Council
• Air Liquide
• EDF
• HDF (Hydrogène de France)
• Atawey
• Lhyfe
• Safra
• Elyse Energie
• Roth2
• Genvia
• Hélion Astom Hydrogen Alsthom
• Chemours
• HySiLabs
• Technip Energie
• Verso Energy
• 45-8 Energy
• Vallourec
• HEF Groupe
• Rely Solutions
• Fives Group