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How soon can hydrogen turn into a concrete market – interview with Ákos Hegedüs, Managing Director of Linde Gas Hungary

Ákos Hegedüs will be one of the speakers at the Budapest Hydrogen Summit, to be held on 4 April.

With Eastern Europe still lagging behind Western European countries in terms of hydrogen development, we cannot help but wonder how soon can hydrogen turn into a concrete market, what colour will it be and what sectors will benefit from it the most.

CEENERGYNEWS spoke with Ákos Hegedüs, Managing Director of Linde Gas Hungary about the challenges still present in the country and in the CEE region for a full upscale of the hydrogen economy and how Linde is driving innovation in this field.

“Hungary and Eastern Europe are still 3-5 years behind Western European countries: we don’t have pilot projects, only small trials like the Aquamarine project in Hungary which is more about R&D,” Mr Hegedüs says.

Hungary had started working on its hydrogen strategy, then the landscape changed: the war in Ukraine started, followed by an unprecedented energy crisis that disrupted supplies and prices.

“Energy is not available in large quantities and green energy not at all in some of these countries and this is holding back possible hydrogen developments,” points out Mr Hegedüs. “Everybody is talking about building electrolysers, without realising that if they don’t operate at 90 per cent capacity, they are useless and too expensive. Especially with current energy prices, it becomes even more expensive. In addition, we still have some technical difficulties also at the industrial scale. Projects are being announced but they are not existing yet.”

Regarding the availability of green energy, Mr Hegedüs underlines that it is quite expensive to install solar panels solely for hydrogen production. In our current circumstances, it is much more useful to use solar to produce electricity for other sources.

“To produce hydrogen will not be a business case,” he says. “Furthermore, we need battery parks and an upgraded and developed network. In other words, we need an energy mix that would give acceptable prices.”

As for the sectors that will benefit the most from the upscale of the hydrogen economy, Mr Hegedüs has noticed a shift in the main trends over the past couple of years.

“Before, it was all about mobility: cars, heavy-duty transport and trains,” he says.

But currently, the biggest opportunities lay with the steel, refinery and chemical industries. And the ammonia production to achieve high levels of CO2 emission reductions. This means that we will still need blue hydrogen for the next decade.

He recalls the buzz around hydrogen-powered trucks and the green bus programme. They are still ongoing but the infrastructure and the filling stations are missing.

“For cars, electric vehicles will still be the better option,” he underlines. “I could imagine a solution for buses if there is an integrated approach. We made a proposal to MAV and Volan Bus in Hungary to have filling stations set up in a way that could fuel trains, buses and trucks. In Germany, the first hydrogen train was put into operation, showing good results both in terms of costs and emissions reduction. Also, trucks that have to make long-distance travel will be more competitive without adding the weight of batteries. At the same time, refineries, which are forced to reduce emissions, are focusing on bioLNG and other biofuels that will compete with hydrogen.”

He also mentions some tests that were carried out in Hungary, like the first mobile test hydrogen filling station, inaugurated by Linde in April 2021 at its Budapest site, which was definitely a milestone on the way to hydrogen mobility in the country; or the first hydrogen-powered heavy-duty vehicle to be revealed in June 2023. But the hydrogen race seems to have slowed down in Hungary. One year ago, Linde Gas Hungary signed a Memorandum of Understanding (MoU) with the Ministry of Innovation and Technology to expand the hydrogen economy. However, not many things have changed since then.

“The novelty of this year on a global level is the US Inflation Reduction Act (IRA) that is supporting also the OPEX part of hydrogen production, putting Europe at a disadvantage. Now the EU has to think about possible similar solutions, but how and when they will be announced, we don’t know,” states Mr Hegedüs. “The economic development slowed down and it is a good thing because we spent a lot of money on equipment that we cannot operate due to technical challenges.”

Something that has changed in Hungary and its neighbouring country Romania is the interest in the steel industry. Linde Gas Hungary is currently discussing possible cooperation with the largest integrated steel company in Romania, to provide hydrogen for the production of green steel.

On the other hand, Linde is driving hydrogen development globally. Mr Hegedüs recalls the first blue ammonia cracking program with Saudi Aramco, in which Linde invested 2 billion US dollars.

“Blue hydrogen is the way for now and green hydrogen will be the next step,” he adds. “But we need more green energy and the market should be developed as, currently, there is no end market.”

Before focusing on hydrogen valleys and corridors we should find end-users and Linde is working exactly in this direction.

In parallel, the company is also focusing on R&D with Hungary ready to set up a remote control centre for hydrogen stations.

Moving on to the challenges, it seems that costs and transport of hydrogen are still the main barriers to a full upscale of this energy carrier.

“When we talk about blue or green hydrogen, it makes more sense to have local hydrogen production near the plants where it will be used. If these plants are closer to cities, it is even better because there could be additional uses,” Mr Hegedüs says, believing that it is better to use hydrogen where it is produced, in order to cut the transportation costs altogether.

Finally, safety is one of the most critical elements when talking about industrial gases.

“There are requirements and standards defined and so far all users and producers are following regulations,” Mr Hegedüs concludes. “Refineries can handle these challenges as it is a daily job for them. It is more complicated for those companies who didn’t have hydrogen so far but want to be part of this market, like energy trading companies, or anyone who wants to produce hydrogen. They have limited experience in safety regulations so another major thing we need to focus on in the future is how to increase the know-how and the skills of specialised workers.”

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