Interview Anne-Frédérique Demaerel, Global Business Expert Large Industries – Electrolyzers Accelera by Cummins

Stimulating demand for green hydrogen is entirely feasible. However, all stakeholders must coordinate their efforts, working in parallel across the areas of policy, energy costs, infrastructure, and power grid connectivity. “By piecing all these puzzle pieces together at the same time, we will stimulate demand and boost the production of green hydrogen.” In this interview, Anne-Frédérique Demaerel, Global Business Expert Electrolyzers at Accelera by Cummins, outlines her vision and provides five practical suggestions for stimulating demand.

What motivates you?

“I have been involved in the energy and climate transition for many years now. I want my work to bring about a positive change in the world and society. My career started at Air Liquide. My next post was Programme Manager for Industrial Transition at the Port of Antwerp-Bruges, focusing on Carbon Capture Utilisation, & Storage. For the past two years, I have been working at Accelera by Cummins, a company specialising in power technology. Using our Destination Zero strategy, we help customers transition to zero CO₂ emissions. And we offer them the ideal solution for their particular application. These include hydrogen fuel cells, batteries for all-electric vehicles, and hydrogen-powered ICE engines. Our approach focuses on using electrolysers to produce hydrogen.”

How will green hydrogen fit into our future energy system?

“Our common goal as a society is to steer our evolving energy system towards climate neutrality. Green hydrogen is a key factor in this regard. However, green hydrogen is not a one-size-fits-all solution. Where electrification is an option, we need to embrace it. Green hydrogen is particularly valuable in applications where electrification is either not immediately feasible or is restricted. These include steel, chemicals, aviation, shipping, and heavy-duty transport. Also in regions where network congestion limits the potential for electrification.”

How realistic are the EU’s objectives?

“Europe’s target is to achieve 42.5% renewable energy consumption by 2030. That’s ambitious. Much like the sector-specific sub-targets for industry. After all, this involves transforming the energy system. I’m convinced that ambitious objectives are essential to kick-start progress during a system transformation. Ensuring a level playing field and safeguarding the competitiveness of European industry on the global stage remains a concern. We need to strike the right balance there.”

In the sectors you work with, what are people saying about green hydrogen?

“In my role, I work closely with steel companies, glass and cement manufacturers, the chemical industry, refineries, and companies developing e-fuel projects. Green hydrogen is an emerging market, and that’s quite apparent in those contexts. Many companies are at the exploratory stage – how will green hydrogen fit into their plans? How will it impact processes, product quality and production costs? There are many outstanding examples of large-scale industrial projects featuring green hydrogen. One of these is Sweden’s H2Green Steel/Stegra project. Yet, I often hear that green hydrogen is in short supply and that the costs are prohibitive. It’s the classic ‘Catch-22’ situation. To overcome this dilemma, we need both the proper infrastructure for renewable energy and scaled-up capacity.”

What can stakeholders do right now to stimulate demand?

“In an emerging market, it’s essential to create the appropriate policy instruments. It’s also important to make sure that these are coherent and consistent. We saw projects in the Netherlands losing momentum, getting axed, or being placed on hold. The reasons included skyrocketing energy costs, policy uncertainty, a lack of long-term commitment from buyers to back investments, inadequate infrastructure (such as pipelines), and steep grid connection fees.

For demand to be effectively stimulated, stakeholders must tackle all of these aspects in parallel. And that is well within reach. Policymakers have a range of instruments at their disposal to stimulate green hydrogen supply and demand. Germany, for instance, is stimulating demand by means of Carbon Contracts for Difference (CCfDs). Through this approach, the government aims to bridge the gap between the current costs of operating industrial plants and the expense of transitioning to zero-carbon processes. At the same time, they are stimulating production by the introduction of a new mechanism that allows electrolyser projects to benefit from reduced electricity rates during specific periods and in designated regions.

One piece of the puzzle that is still missing is a market for climate-friendly products, such as green steel and green chemicals. Prompting companies to reduce emissions is important, but it carries a substantial price tag. More often than not, the financial burden lands squarely on the shoulders of consumers. Developing a specific market for this purpose would make it easier for green hydrogen producers to attract customers.”

What do you personally expect the asking price to be?

“Our role at Accelera by Cummins is not to develop green hydrogen projects but to manufacture and market the electrolysers needed to make them happen. We’ve set cost-reduction targets for our products, with 2030 as the deadline. To this end, we have implemented a multifaceted strategy that includes standardising products, scaling up and automating production lines, vertical integration and supply chain optimisation, enhancing product design and performance, scaling up cell stacks, and extending the lifespan of our products.

Accordingly, we foresee a reduction in electrolyser costs over the next few years. Over the past few years, our sector has achieved phenomenal progress in scaling up and driving technological development. Proton exchange membrane electrolysis is a case in point. So I have every confidence that we’ll succeed in this too. Electrolyser costs constitute only a small percentage of the overall expenses associated with producing green hydrogen. In Western Europe, energy prices account for as much as 70% of the cost of green hydrogen. That’s where the biggest gains are to be made.”   

Anne-Frédérique’s 5 tips for stimulating demand

1. Construct a policy framework and develop instruments that are both coherent and consistent.
2. Operate on all fronts in parallel and make certain the timelines are coordinated. The various pieces of the puzzle must be developed and assembled simultaneously.
3. Look to the future, and offer foresight and clarity to help businesses stay well ahead of any upcoming changes. This builds trust and creates certainty for investors.
4. Create a market for climate-friendly products, such as green steel and green chemicals.
5. Avoid excessive regulation. Compare this to electric vehicles, where no one is particularly concerned about whether or not they are charged with renewable energy. Why is an emerging, immature market like green hydrogen already being weighed down by so many regulations?