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Hydrogen Backbone

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European

Hydrogen Backbone
IMPLEMENTATION ROADMAP —
CROSS BORDER PROJECTS AND COSTS UPDATE

NOVEMBER 2023

Amber Grid, Bulgartransgaz, Conexus, CREOS, DESFA, Elering,


Enagás, Energinet, Eustream, FGSZ, FluxSwiss, Fluxys Belgium,
Gas Connect Austria, Gasgrid Finland, Gassco, Gasunie, GASCADE,
Gas Networks Ireland, GRTgaz, National Gas Transmission,
NET4GAS, Nordion Energi, OGE, ONTRAS, Plinacro, Plinovodi, REN,
Snam, TAG, Teréga, Transgaz, Transitgas AG and the TSO of UA
Table
of contents

Executive summary 4

1. The role of EHB within the European energy transition 7


1.1 Hydrogen’s key role for European climate policy 7
1.2 The EHB initiative: a collaborative effort to build out the clean hydrogen infrastructure network 8
1.3 The clear benefits of an integrated pan-European hydrogen network 9

2. Current EHB progress to date 11


2.1 Typical hydrogen infrastructure project timelines 11
2.2 Overall network development and project timelines 12
2.3 Corridor-specific development 14
3.3.1 Corridor A — North Africa and Southern Europe 14
3.3.2 Corridor B — Southwest Europe and North Africa 15
3.3.3 Corridor C — North Sea 16
3.3.4 Corridor D — Nordic and Baltic Regions 17
3.3.5 Corridor E — East and Southeastern Europe 18
3.3.6 Transmission Network in Germany 19

3. Update of pipeline infrastructure costs 20


3.1 Cost inputs and results 20
3.2 The impact of inflation 23

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Table of contents
(continued)

4. Conceptual framing of the financial challenge 24


4.1 IRC — conceptual framework 25
4.2 UFG — conceptual framework 27

5. What to expect from the EHB in 2024 28

6. Appendix 29
6.1 Appendix A: selected projects to create EHB by early 2030s 29
6.1.1 Corridor A — North Africa and Southern Europe 29
6.1.2 Corridor B — Southwest Europe and North Africa 32
6.1.3 Corridor C — North Sea 34
6.1.4 Corridor D — Nordic and Baltic regions 36
6.1.5 Corridor E — East and Southeast Europe 37
6.1.6 Transmission Network in Germany 39

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November 2023

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Motivation

Building out an integrated pan-European hydrogen network before 2030 is of


critical importance to Europe’s goals for the energy transition, including energy
affordability, security, and independence. Early hydrogen infrastructure enables

Executive a competitive European energy transition on multiple fronts, facilitating large-


scale deployment of renewable energy and hydrogen production, allowing for

summary hydrogen production in regions where costs are low, and enabling imports from
third-party countries. Cross-border infrastructure has been and remains a crucial
component of the energy value chain—connecting supply with demand and
storage and sending important signals to mitigate perceived financial risk for
market participants, project developers, and downstream end users. To fulfill
Europe’s hydrogen objectives, hydrogen infrastructure will be paramount.

Existing progress and momentum

The buildout of the European Hydrogen Backbone (EHB) network is well


underway. Transmission System Operators (TSOs) are planning to make substantial
investments and can point to tangible progress on corridor projects. All five
envisioned corridors1 have projects currently in progress, with a clear majority
of EHB member TSOs working on implementation and producing real progress
in their countries.

This report highlights a set of 40 concrete projects managed by the EHB’s TSO
members, representing 31.500 kilometres of hydrogen pipelines with expected
commissioning prior to 2030. TSOs are actively seeking sufficient contractual
commitments from future network users to underpin their investment decisions
in hydrogen networks. With the EHB moving from a vision towards reality, the
first financial investment decision (FID) in a project which is part of the backbone
has already been taken. Furthermore, together, the TSOs are using their existing
expertise with gas networks and working to ensure that the EHB is not just a
vision but a tangible reality that will support and accelerate the European energy
transition.

Updating costs from EHB’s flagship 2020 publication

The world has undergone substantial changes since the initial publication of
EHB cost estimates in 2020. Globally impactful factors like COVID, the Russian
invasion of Ukraine, rising inflation, and policy responses to climate change have
all influenced implementation costs. This report presents an updated, bottom-up
accounting of unitary costs for capital expenditures (CAPEX) and developmental
expenditures (DEVEX) of pipelines and compressors, based on new primary data
collected from the TSOs’ real-world projects.

Costs are nominally higher as compared with the 2020 update but are shown to
be largely in line with economy-wide inflation (of course, the broader impacts of
inflation are felt across nearly all sectors, including other energy vectors). The
cost data in this report reflects Europe-wide average numbers. However, it is
1 EHB (2022). Five hydrogen supply
corridors for Europe in 2030. Source: important to consider that energy infrastructure costs tend to be highly project-
EHB-Supply-corridors-presentation- specific, with geographic, demographic, and other factors playing an important
ExecSum.pdf
role in project economics.

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Framing the financial challenge

Conceptually and once operational, the EHB network is likely to encounter two
distinct financial phases that are linked to the development of the European
hydrogen economy. The first of these phases represents the market ramp-up,
involving limited hydrogen demand and low booking of capacity on the hydrogen
network. However, as the hydrogen economy develops and demand rises, the
market will transition to the later, mature market phase.

Defined here, the investment recovery challenge (IRC) arises from the potential
financial disparity between the regulated revenue cap and the revenue that can
be earned from network users on account of real network capacity bookings
during the initial market ramp-up phase. A simplified way to interpret the origin
and timing of this challenge is presented conceptually in Figure 1. Please note
that some pipelines will be financially feasible from the start of operation and
not only during the mature market phase, in particular in case of high share of
repurposing. Therefore, this graph is not a reflection of the real dynamics of
the entire EHB network but rather a simplification of a single pipeline, used to
illustrate the structure of the IRC framing.

Underpinning this potential challenge is the possibility that demand might take time
to develop, as market design enablers will take some time to be fully developed
and implemented. (These include, for example, RED III obligations, European
Union [EU] and national policy enablers, and subsidies for renewable and low
carbon hydrogen production to enable hydrogen to become increasingly cost
competitive with fossil fuels.) The impact of demand development over time can
be observed via the teal line in Figure 1. The hydrogen demand, and equally the
use of the booked capacity, increases until a steady booked capacity is observed
in the mature market phase. This increase in booked capacity allows TSOs to
lower tariffs until the market transition to the mature phase.

The extent of the potential financial challenge of course depends on the amount
Figure 1
of public financial support for infrastructure, the share of existing infrastructure
The IRC and level of tariff required that can be repurposed, as well as the location of supply and demand centers
to realise regulated return. (which are very much country specific).

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The upfront financing gap (UFG) is a consequence of the IRC and represents the
difference between the total required upfront investment prior to project operation2
and the ability of a TSO to finance the project. Policymakers could mitigate
the challenges associated with a potential UFG by developing mechanisms to
manage market risk while in parallel allocating public funding or guarantees to
mitigate the IRC where relevant. These mechanisms should be designed in a way
that network development is sufficiently derisked and able to attract market-rate
investment to finance its buildout.

Conclusions and looking forward

EHB member TSOs are moving ahead with real, tangible progress on building
out a Europe-wide hydrogen network. Investment in the EHB is a necessary step
forward for achieving lowest-cost societal decarbonisation in Europe. Hydrogen
makes use of plentiful European and neighboring resources, serves a multitude
of sectors—including those typically viewed as hard to decarbonize—and
provides connectivity and resilience across the continent. Furthermore, building
out infrastructure enables the creation of a liquid, pan-European, hydrogen
market. Simply put, the hydrogen infrastructure network is of critical importance
for achieving energy transition goals.

Here, we the research team have provided important cost updates to help inform
policymakers on the competitive advantages offered by the EHB and maintain the
progress that is already underway. Additionally, we have laid out a conceptual
framework for the potential financial challenges that could become most prominent
for network development. Future EHB efforts will quantify the potential amount
of required EU-wide support, present recommended solutions to mitigate the
defined financial challenges, and provide additional suggestions for addressing
other aspects of the hydrogen value chain. Regardless of the specific path
forward, we expect that the road ahead is likely to require collaboration amongst
energy network operators, end-user industries, governments, and regulators.
The EHB—and the energy transition as a whole—requires proactive planning,
collective action, and a dedication to the overarching goal.

2 Investment required prior to operation is


composed of CAPEX and DEVEX.

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1. The role of EHB within the
European energy transition

1.1 Hydrogen’s key role for European climate policy

In 2020, the EU envisioned a hydrogen strategy to create a continent-wide


hydrogen ecosystem in line with the European Green Deal. In July 2021, the
European Commission set out a target of 5.6 million tonnes (Mt) of renewable
hydrogen in Europe by 2030 in its Fit For 55 legislative package3. Russia’s
invasion of Ukraine in February 2022 strengthened the already clear need for a
rapid energy transition. In the face of these events, the European Commission
published REPowerEU4, setting a target of 20 Mt of renewable hydrogen (10 Mt
domestically produced and 10 Mt imported).

Before the European Commission released the REPowerEU plan, the EHB
initiative conducted a bottom-up assessment of demand by sector and country.
In this analysis, the EHB identified 14.7 MT of demand5, representing tangible
and achievable projections based on national targets, market developments, and
announced projects (prior to the release of REPowerEU).

The sizeable hydrogen demand in 2030 laid out in both the REPowerEU plan and
the EHB’s bottom-up analysis underscores the key role hydrogen is envisioned
to play in the future European energy system, both as an energy carrier and
as an energy feedstock in industrial and other processes. Hydrogen is likely
to be a crucial component of the energy transition across end-use sectors, as
3 European Commission (2022). an important tool for hard-to decarbonise sectors such as heavy industry (e.g.,
Commission launches consultations on iron and steel manufacturing), freight and transportation sectors that historically
the regulatory framework for renewable
depended upon fossil fuels, and as a means of storing renewable energy for use
hydrogen. Source: https://commission.
europa.eu/news/commission-launches- on a dispatchable basis.
consultations-regulatory-framework-
renewable-hydrogen-2022-05-23_en
4 European Commission (2022).
REPowerEU: Joint European Action for
more affordable, secure, and sustainable
energy. Source: https://ec.europa.eu/
commission/presscorner/detail/en/
ip_22_1511.
5 EHB (2022). Five hydrogen supply
corridors for Europe in 2030. Source:
https://ehb.eu/files/downloads/
EHBSupply-corridor-presentation-Full-
version.pdf

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1.2 The EHB initiative: a collaborative effort to build
out the clean hydrogen infrastructure network

The EHB initiative is a group of TSOs spanning the European continent and
collaborating to lead hydrogen infrastructure development. The original group of
11 EHB partners published their first paper in July 2020, outlining a vision for
dedicated hydrogen pipeline infrastructure—to a large extent based on
repurposed existing natural gas pipelines—including maps showing hydrogen
infrastructure covering their home regions. Since then, the EHB initiative has
grown to 33 European network operators with infrastructure covering 24 EU
member states plus Norway, the United Kingdom, Switzerland, and Ukraine
(Figure 2).

Figure 2

The 33 members of the


EHB, as of 2023.

Since the EHB’s initial report in 2020, subsequent publications served to enhance
the vision as more partners entered the initiative, adding detail to recommended
actions and building additional momentum for the deployment of large-scale
hydrogen infrastructure. In view of national and European climate ambitions, first-
mover market actors have called for accelerated hydrogen infrastructure planning
and development to support lower-cost implementation of their energy transition
strategies. In addition to contributing to REPowerEU climate targets, the ability to
strengthen European resilience and energy security in response to global energy
market disruptions, while preserving the overall EU competitiveness, underscores
the urgency of large-scale hydrogen infrastructure planning.

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From the EHB’s formation in 2020 through today, EHB partners have collaborated
to develop a common hydrogen infrastructure strategy. By combining and
validating the viewpoints and ambitions of a growing number of members, this
strategy continues to evolve. Since the beginning, we have periodically updated
our expectations of infrastructure size and cost to reflect the dynamic external
environment of recent years.

Since our previous publication describing hydrogen corridors in June 2022,


many ambitions have turned into reality as all members have been engaged in
real project development, allowing first-hand access to key financial indicators
that allow us to report more accurately on the investment needs of the EHB.

1.3 The clear benefits of an integrated pan-European


hydrogen network

While both electricity transmission and hydrogen transmission will be required


in a mature energy system, a previous EHB report6 demonstrated that a pipeline
transmission system offers a more cost-effective energy transfer solution to serve
hydrogen demand as compared with high voltage direct current or high voltage
alternating current options, with a particularly strong competitive advantage at
high volumes. Therefore, the rollout of hydrogen infrastructure is key to scale
up Europe’s renewable energy supply efficiently and fully—including domestic
renewable hydrogen production—and enable a significant increase in the amount
of low-carbon energy transferred between countries and imports from outside
EU.

The EHB has long advocated for European hydrogen corridors and their role
in contributing to an affordable and secure energy supply in Europe. The
corridor concept provides an economical means to bridge the substantial
variation of hydrogen producers and end users throughout regions of Europe,
owing to demographic, geographical, economic, and climatic factors.7 Some
European regions—the Nordics, Baltics, North Sea, and southern Europe—
are characterised by a net oversupply of low-cost hydrogen resources. These
6 Note that this comparison is made
against transmitting renewable energy regions benefit from vast renewable energy potential, high-capacity factors, and
as electric current to the place of local substantial land availability. Other regions—such as central Europe—will require
hydrogen demand and then converting
into hydrogen (locally). EHB (2021).
hydrogen imports from neighbouring European or other countries to meet their
Analysing future demand, supply, and hydrogen demand.
transport of hydrogen.p.81. Source:
https://ehb.eu/files/downloads/EHB-
Analysing-the-future-demand-supply-and-
Offering an economical connection between regions of hydrogen supply and
transport-of-hydrogen-June-2021-v3.pdf the hydrogen consumers in central Europe via cross-border pipeline corridors
7 EHB (2022). Five hydrogen supply will become increasingly important as adoption of hydrogen increases in the
corridors for Europe in 2030. Source:
https://ehb.eu/files/downloads/EHB- transport, industry, and power sectors. Such a scenario could lead to demand
Supply-corridor-presentation-Full-version. outpacing supply in regions with lower renewable energy potential. Importantly,
pdf
8 Projects of Common Interest (PCIs)
this mirrors the EU sentiment, aligning with goals of the Projects of Common
are intended to help the EU achieve its Interest (PCIs).8
energy policy and climate objectives:
affordable, secure, and sustainable
energy for all citizens and long-term
decarbonization. Source: https://energy.
ec.europa.eu/topics/infrastructure/
projects-common-interest/key-cross-
border-infrastructure-projects_en

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A recent study by the Gas for Climate consortium—using a methodology based
on optimising a single European energy system—estimated the cost savings
resulting from a pan-European hydrogen network over the 2030 to 20509
Figure 3
timeframe to be as high as €330 billion as compared with a more isolated cluster
A comparison of the clustered approach (see Figure 3).10 Here, it becomes clear that an integrated pan-European
vs. interconnected hydrogen hydrogen network contributes to an affordable energy supply, supporting the
network approach in the S1 most competitive integration of large-scale variable renewable energies and
scenario.11 strengthening Europe’s security of supply.9

9 Gas For Climate (2023). Assessing the


benefits of a pan-European hydrogen
transmission network. Source: https://
gasforclimate2050.eu/wp-content/
uploads/2023/03/2023_Assessing_
the_benefits_of_a_pan-European_
hydrogen_transmission_network.pdf
10 Based on supply and demand data from
the 2022 Ten Year Network Development
Plan (TYNDP), factoring an adjustment
for the phase-out of Russian supply and
consideration of REPowerEU targets,
the study shows that total cost savings
could reach €330 billion. These cost
savings are mainly attributed to the
ability to source hydrogen from the most
economical regions, while additional
savings can be attributed to lower
investment requirements for electricity
generation, storage, and transmission
capacities.
11 The S1 scenario is the TYNDP Global
Ambition scenario.

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2. Current EHB progress to date
EHB members are central actors enabling hydrogen’s role in decarbonising the
European energy system. Amidst large-scale economic, geopolitical, and regulatory
changes, these TSOs are moving forward with project development and working to
turn the EHB vision12 into a tangible reality.

2.1 Typical hydrogen infrastructure project timelines

Figure 4 shows a representative implementation timeline for the types of


transmission projects comprising the EHB. This timeline shows that urgency and
speed is essential for realising Europe’s decarbonisation goals for 2030. Project-
specific timelines likely vary depending on the jurisdiction, size, and complexity
of a project, as well as established corporate and national procedures. On
average, implementing a hydrogen transmission project implementation takes 7
years from initiation to commissioning.

Figure 4

A representative timeline
for transmission project
implementation.

The most important milestone of any project is the Final Investment Decision
(FID). The building blocks of the timeline prior to FID are intended to address the
technical and financial complexities of a project. In addition to technical studies
and permitting, market and financial analyses are important. The main objective is
to ensure that the project will generate a sufficient return to cover the investment.
The costs incurred before FID are referred to as DEVEX and are assumed to be
12 Note, on a national level, continual
a couple percentage of the total CAPEX of a project. The EHB’s members are
discussions are being held on the currently working proactively with policymakers and industry to ensure FIDs can
development of national grids. These be taken at a speed in line with Europe’s decarbonisation ambitions.
discussions could lead to a deviation
from the current EHB vision.

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2.2 Overall network development and project timelines

Projects initiated by the EHB members have been planned in close cooperation
with industry stakeholders and regulators and are anticipated to receive strong
support at the national and international level. Most of these projects are already
in the early phase of development and are expected to be operational between
2029 and 2031 (see Figure 5).

The projects currently in the front-end engineering design (FEED) phase are
expected to be operational within a couple of years. If FID is taken, these projects
will establish the first 4.000 km of the European hydrogen transmission network.
In total, 40 projects are expected to be commissioned in by the start of the next
decade.

Figure 5

Anticipated kilometers of
commissioned hydrogen
pipelines, per year.

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Figure 6

A selection of EHB-affiliated
hydrogen transmission projects
(see Appendix A for details).

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2.3 Corridor-specific development

The next sections provide in-depth information about projects planned for
commissioning by EHB partners in the coming years.13 The projects are arranged
and color-coded by corridor. The transmission network in Germany is included
separately because that would otherwise have been discussed in multiple
corridors. For more detail about the projects included in the sections below see
the Appendix A: Selected Projects to Create EHB by Early 2030s.

3.3.1 Corridor A — North Africa and Southern Europe

Figure 7

Corridor A development
(selected projects).

Corridor A is intended to deliver low-carbon hydrogen from North Africa


and Southern Italy towards Central Europe. Overarching initiatives such as the
SunsHyne Corridor and the SoutH2 Corridor combine multiple national projects
into bigger alliances that enhance political support and enable them to benefit
from a streamlined permitting process as well as pursue a value-for-money
framework through mechanisms such as the Projects of Common European
Interest (PCI). The very broad support and exchange of stakeholders along the
entire value chain—from production to consumers—is a success factor for the
development of the favourable production areas in North Africa. Focusing on the
development within specific countries, green hydrogen from North Africa will first
be injected to the Italian Hydrogen Backbone, consisting of approximately 2.300
km of pipeline (of which 75% is repurposed). After serving domestic demand in
Italy, hydrogen will be moved into additional central European countries. Within
Austria—in addition to serving domestic demand—hydrogen will be transported

13 These maps do not provide a complete


overview of projects in each region.
There are additional projects in
development that are not shown.

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via one repurposed TAG pipeline, WAG, and Penta West pipeline towards
Germany and connected to storage facilities along the route. HyPipe Bavaria
in Germany finally forms the link between Austria and the German Hydrogen
Backbone. The route from Austria via Slovakia and Czech Republic to Germany
is fully made up by repurposed pipelines and will serve demand centres along
the corridor. Additionally, a connection to the Slovenian Hydrogen Backbone will
not only supply national demand but also enable further connection to Croatia.
Furthermore, the SunsHyne corridor will be used to serve hydrogen demand in
Slovakia and Czechia. When needed, the connection to Hungary can also serve
demand in southern Europe.

3.3.2 Corridor B — Southwest Europe and North Africa

Figure 8

Corridor B development
(selected projects).

The Southwest Europe & North Africa Corridor aims to transport hydrogen to
demand centres in Germany and beyond, through the H2ercules project. Within
Corridor B, H2Med is the overarching project connecting hydrogen networks
in Portugal, Spain, France, and Germany. It consists of the CelZa project in
Portugal that connects hydrogen producers such as the Green H2 Valley to
the Spanish Hydrogen Backbone. The Spanish Hydrogen Backbone collects
multiple supply sources from around Spain and allows connection to North
African project developments, making it one of the most promising hydrogen
production locations in Europe. To transport planned supply volumes to the main
demand centres of Europe, the connection into France is essential. The BarMar
project circumvents geographic challenges of the Pyrenees by traversing the
Mediterranean Sea as an offshore pipeline from Barcelona to Marseille. From
Marseille onwards, the hydrogen network branches into two directions, through
France with HySoW towards the Atlantic coast and as connection to Western
European countries via HyFen.

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3.3.3 Corridor C — North Sea

Figure 9

Corridor C development
(selected projects).

The North Sea Corridor aims to expedite the delivery of hydrogen to demand
centres in the western part of Germany. A primary energy feedstock for hydrogen
in this corridor is provided by the vast offshore wind potential in the region. With
this aim, H2T envisions to develop a pipeline from Norway in close collaboration
with the German and Norwegian government. Nearby, the Danish-German
Hydrogen Network intends to transport hydrogen via a 561 km onshore pipeline
through Denmark into the north of Germany. Additional offshore wind energy
from the North Sea is brought to the German coastline with hydrogen initiatives
such as HyOne and AquaDuctus in which hydrogen will be produced offshore
and will be transported via pipelines to the mainland. Entities in Corridor C also
envision supplying hydrogen in this corridor by importing hydrogen derivatives
via ports such as Rotterdam and Antwerp. Additionally, to transport hydrogen
across the mainland and into Europe, projects such as the Belgium Hydrogen
Backbone and the Hydrogen Network Netherlands are progressing rapidly—the
Belgium Hydrogen Backbone is in the FEED phase, while the Hydrogen Network
Netherlands has already taken FID. The construction of the Hydrogen Network
Netherlands has started on 27th of October.

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3.3.4 Corridor D — Nordic and Baltic Regions

Figure 10

Corridor D development
(selected projects).

The Nordic and Baltic regions have significant renewable energy resources based
on low-cost renewable energy. The availability of land and water for hydrogen
production makes the region lucrative for hydrogen projects and new P2X (Power-
to-X, the process of turning hydrogen into something else) industries. Therefore,
three major projects are planned to connect with demand regions. The Nordic
Hydrogen Route-Bothnian Bay connects the northern parts of Finland and Sweden
with their abundant renewable energy resources (onshore and offshore wind) to
demand centers in these regions. It is also connected to the onshore Nordic-Baltic
Hydrogen Corridor project, which connects the future Baltic hydrogen market
with Germany. The offshore Baltic Sea Hydrogen Collector offshore project,
which connects Finland, Sweden, and Germany, as well as the energy islands
in the region, will link the vast offshore wind resources to be used for hydrogen
production with demand in Western and Central Europe. The offshore project
might also be connected to the Bornholm-Lubmin interconnector in Denmark.

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3.3.5 Corridor E — East and Southeastern Europe
Figure 11

Corridor E development
(selected projects).

Corridor E—the East and Southeastern corridor—enables the transport of


hydrogen from Greece or from Ukraine through Bulgaria, Romania, Hungary,
Slovakia, and Austria to Central Europe. Projects already under development
include the RO/HU H2 corridor, the HU/SK H2 corridor, and the Central European
Hydrogen Corridor (CEHC) or the H2EU +Store initiative. Each of these projects is
currently in the pre-feasibility phase and are all aiming to be operational in 2030.
A significant part of these projects also directly interfaces with other neighboring
initiatives, such as the SunShyne Corridor and the SoutH2 Corridor, where they
enable transport of hydrogen from East and Southeastern Europe as well as from
Northern Africa through Corridor A. To enable flows in all these directions, there
is a need for technical flexibility of the transmission system, especially in Slovakia
and Austria.

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3.3.6 Transmission Network in Germany
Figure 12

Development of the network in


Germany (selected projects).

Germany is part of all EHB corridors and is therefore discussed separately


here. Germany is expected to import large amounts of hydrogen to meet the
largest national hydrogen demand. Development of the network in Germany
(selected projects). shows the key projects of some German TSOs as part of the
planned Hydrogen Core Network,14 which will enable the connection of domestic
hydrogen production and neighboring countries for hydrogen imports to the
demand centers. The German TSOs are closely cooperating on several projects
in Germany, the Netherlands, Belgium, France, Norway, Austria, Denmark, and
the Czech Republic.

The German TSOs work closely with FNB Gas e.V.15 and the Federal Ministry
of Economics and Climate Action (BMWK) to coordinate the development of
the Hydrogen Core Network. As of July 2023, the total length of the network
is expected to be about 11.200 km. The goal of the planning is to connect the
key supply and demand facilities to enable an open and competitive hydrogen
market. Joint planning will also enable the development of comprehensive support
mechanisms to minimise and derisk investments.16 Note that the final network is
still under discussion and therefore might be updated after the publication of
this report. The latest version can be found on the website of FNB Gas e.V.17.
Development of the network in Germany (selected projects). shows only selected
projects and therefore does not fully correspond to the network developed under
14 FNB Gas (2023). Hydrogen core the FNB Gas e.V. initiative.
network. Source: https://fnb-gas.de/en/
hydrogen-core-network/
15 The association of the supra-regional gas
transmission companies.
16 Hydrogen Insights (2023). How should
Germany fund its 11,200km national
hydrogen network? This is Berlin‘s
latest thinking. Source: https://www.
hydrogeninsight.com/policy/how-should-
germany-fund-its-11-200km-national-
hydrogen-network-this-is-berlins-latest-
thinking/2-1-1497289
17 https://fnb-gas.de/en/

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3. Update of pipeline
infrastructure costs

In 2020, the EHB published first-of-its-kind cost data for hydrogen pipeline
infrastructure, outlining the costs associated with pipelines of different sizes,
onshore versus offshore, and new versus repurposed. This data has been
circulated around the world, being utilised by commercial actors, research
institutions, planners, policymakers, and others. Given recent developments to
the global economic picture—whether COVID, geopolitical, or climate-related—
the EHB has undertaken an effort to provide updated cost information to keep
project development, planning, and policy efforts as current and accurate as
possible. In this section, we provide a discussion of CAPEX relating to pipeline
and compressor costs.

3.1 Cost inputs and results

The 2023 cost update included a survey of TSOs to estimate the costs associated
with each of the components necessary to build out pipeline infrastructure.
Broadly speaking, these components include material costs, labour costs,
Figure 13
costs to acquire rights-of-way, and miscellaneous additional costs. DEVEX were
calculated as a percentage of the total CAPEX costs. A simple schematic of the
Components included in the CAPEX calculation methodology can be seen in Components included in the
calculation of CAPEX and DEVEX. calculation of CAPEX and DEVEX..

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EHB member TSOs—the stakeholders most familiar with real-world hydrogen
infrastructure implementation—provided primary data to inform this cost update.
The collected data originates from a variety of sources, including vendor quotes,
pre-feasibility studies, real project data, and internal budgeting departments.
Additionally, we used an external model,18 historical project database,19 and
commercial studies20,21 to corroborate and validate TSO data. To account for
varying data quality and specificity, we categorised collected data by level of
rigor—assigning different weights to the various source types and creating
weighted average cost values for pipelines of different sizes. In this process,
TSO primary data was given a stronger weighting than external models and
studies. Within collected TSO data, real project cost data was valued with a
higher weighting than costs from pre-feasibility studies and the assumptions from
internal budgeting departments.

Figure 14 provides comparison of the new and previous EHB cost assumptions
for new-build onshore pipelines and compressors. The graph above the table
displays how the costs of a pipeline can be influenced by external factors (e.g.
population density and elevation). The EHB 2023 values in the table are reflected
of Europe-wide estimates. Although the data distribution has been anonymised
for confidentiality purposes, the visualisation does reflect the true nature of the
collected data. The yellow line represents the current assumption of EHB network
costs.
Figure 14

Visualisation of data received


from EHB members for new
pipeline and new compressors
costs.

18 Khan, M.A., Young, C. and Layzell,


D.B. (2021). The Techno-Economics
of Hydrogen Pipelines. Transition
Accelerator Technical Briefs Vol. 1, Issue
2, Pg. 1-40. ISSN 2564-1379.
19 Energy Information Administration
(2023). U.S. natural gas pipeline
projects. Source: https://view.
officeapps.live.com/op/view.
aspx?src=https%3A%2F%2Fwww.
eia.gov%2Fnaturalgas%2Fpipelines
%2FEIA-NaturalGasPipelineProjects.
xlsx&wdOrigin=BROWSELINK
20 DNV (2023). Specification of a
European Offshore Hydrogen Backbone.
Source: https://www.gascade.de/
fileadmin/downloads/DNVStudy_
Specification_of_a_European_Offshore_
Hydrogen_Backbone.
21 Strategy& (2021). HyWay 27: hydrogen
transmission using the existing natural
gas grid?

21 / EUROPEAN HYDROGEN BACKBONE


Not visualized in Visualisation of data received from EHB members for new
pipeline and new compressors costs. (but compiled using the same method),
TSO data shows that repurposed 20” pipelines represent 30% of the cost of new
pipeline deployment. For all other sizes, repurposing costs are approximately
20% of the cost of new pipeline construction. (Note that this 20% repurposing
cost assumption is in line with previous EHB values). For offshore pipelines, we
retain the previous EHB assumption, indicating that these kinds of pipelines cost
approximately 1.7x more than similarly sized onshore pipes. Detailed cost results
by size and type of pipeline can be seen in EHB CAPEX Assumptions.
Table 1 CAPEX costs
Parameter (M€/km for pipelines and
EHB CAPEX Assumptions
M€/MWe for compressors)
20” onshore pipes 1.80
36” onshore pipes 3.20
New
48” onshore pipes 4.40
pipelines
36” offshore pipes 5.44
48” offshore pipe 7.48
20” onshore pipes 0.54
36” onshore pipes 0.64
Repurposed
48” onshore pipes 0.88
pipelines
36” offshore pipes 1.09
48” offshore pipe 1.50
Compressor station 4.0

It is important to note that although this report presents the latest cost estimates
for hydrogen infrastructure within Europe, the numbers are based on three broad
financial assumptions:
1. EHB cost data reflects a Europe-wide estimate. Europe-wide estimates
are reasonable to use in EHB calculations due to the diversity of pipelines
in the pan-European grid. However, these assumptions might not apply to
individual projects, given the diverse terrain or required infrastructure in
differently populated regions. Regions with greater population density or
mountainous geography might encounter costs toward the higher end of
these ranges, while more sparsely populated or with flatter or less complex
terrain will likely be able to take advantage of lower values.
2. Limited empirical data exists regarding large-scale hydrogen
transmission pipelines in Europe. While gas transmission pipeline data
can be extrapolated, uncertainties regarding operating pressure, pipeline
materials, etc., contribute to uncertainty for hydrogen-specific costs. As
described previously, TSO data is consolidated across all responses and
compared with existing studies to reduce any potential bias. However, the
data still relies on estimates underlied by a limited amount of empirical data.
3. Material and labour costs account for 70%-80% of transmission pipeline
and compressor expenses. Consequently, future cost developments are
strongly tied to the development of steel prices, energy prices, inflation, and
workforce dynamics. Overall, it is the EHB’s aim to estimate and monitor the
true cost of a pan-European hydrogen network, enabling this research to
provide value for real pipeline network planners and implementers.

22 / EUROPEAN HYDROGEN BACKBONE


3.2 The impact of inflation

While prices in this update are nominally higher than the costs cited in 2020,
Figure 15 shows that the bulk of the cost increase—as compared with previous
EHB publications—can be attributed to inflation. To corroborate this assertion,
the figure portrays the previous EHB assumptions adjusted for sector-specific
inflation,23 leading to CAPEX numbers that are approximately equal to the new
EHB values.
Figure 15

Comparison of 2019 EHB


assumptions (adjusted for
inflation compared) to EHB 2023
assumptions (based on new data
reflective of project experience
of TSOs) show costs increase are
largely due to inflation

23 Inflation numbers are based on producer


prices in industry – specifically for
manufactures of tubes, pipes, hollow A comparison of Eurostat data24 on producer price indices by sector shows that
profiles and related fittings, of steel.
Eurostat (2023). Producer prices in
the gas pipeline and electricity transmission sectors (and their associated raw
industry. Source: ttps://ec.europa. materials) have seen an equivalent rise in prices on account of recent inflation.
eu/eurostat/databrowser/view/STS_
INPP_A__custom_6529451/default/
table?lang=en
Considering this cost increase, the primary aim of policy makers should be
24 All producer price indices are based on to enable sufficient investment in infrastructure across all energy carries.
Eurostat data, indicating—since 2019—a Both electricity and hydrogen infrastructure have an important role to play in
47% increase in prices for manufacture
of tube pipes, hollow profiles and decarbonising the European energy system. However, with regard to hydrogen,
related fittings of steel; a 48% increase several studies conclude that it is more cost-efficient to install electrolysers close
for copper production; a 52% increase
for aluminium production; and a 125%
to renewable power generation and then use pipelines to transport hydrogen
increase in electric power generation, to the point of consumption than it is to install electrolysers close to hydrogen
transmission and distribution: ec.europa. demand and consequently power electrolysers through the electricity grid.25,26,27
eu/eurostat/databrowser/view/STS_
INPP_A__custom_8023762/default/ Given our observation that the inflation has impacted both hydrogen pipelines
table?lang=en and electricity transmission infrastructure, we believe this conclusion still holds
25 International Energy Agency (2023).
Energy Technology Perspective 2023.
true.
Page 320. Source: https://iea.blob.
core.windows.net/assets/a86b480e-
2b03-4e25-bae1-da1395e0b620/
EnergyTechnologyPerspectives2023.pdf.
26 Gas For Climate (2023).
Assessing the benefits of a pan-
European hydrogen transmission
network. Page 6. Source: https://
gasforclimate2050.eu/wp-content/
uploads/2023/03/2023_Assessing_
the_benefits_of_a_pan-European_
hydrogen_transmission_network.pdf.
27 EHB (2021). Analysing future demand,
supply, and transport of hydrogen.
Page 81. Source: https://ehb.eu/
files/downloads/EHB-Analysing-the-
future-demand-supply-and-transport-of-
hydrogen-June-2021-v3.pdf

23 / EUROPEAN HYDROGEN BACKBONE


4. Conceptual framing of
the financial challenge

Upfront CAPEX and DEVEX costs are just a part of the broader financial picture
of hydrogen network development. Conceptually, the EHB network is likely to
encounter two distinct financial phases during its operation that are strongly linked
to the development of the European hydrogen economy (Figure 16). The first of
these phases represents the market ramp-up, involving limited hydrogen demand
and low hydrogen capacity booking on the network. The capacity booking of the
network could consist of both long-term and short-term bookings. However, as
the hydrogen economy develops and demand rises, the market will transition to
the later mature market phase.

The EHB network is projected to be financially viable in the long term, given
the updated unit costs explained in section 4.1 of this report and bottom-
up demand development as laid out by the EHB in previous publications.28
Given the signals of wider institutional support towards hydrogen in Europe,
the financial challenges during operation discussed in the upcoming section
relate primarily to the first, developmental phase of network operation. The main
cause of this potential financial challenge is that demand might take time to
develop, as market design enablers will take some time to be fully developed
and implemented.

During the ramp-up phase, the EHB might therefore encounter an investment
recovery challenge (IRC), meaning that the network might not generate the full
revenue allowed by regulators under a largely similar application of existing—
natural gas infrastructure-based—regulations. Operational revenue streams are
necessary to refinance the costs associated with building and operating the
network; therefore, the challenge is caused by low earned tariff revenue resulting
from a low level of capacity bookings or uncertain network user willingness-
to-pay in the initial phase. Additionally, the duration of market ramp-up might
exceed the timeframe for network operators to recoup missed revenue under
existing cost recovery rules.

28 EHB (2022). Five hydrogen supply


corridors for Europe in 2030. Source:
https://ehb.eu/files/downloads/EHB-
Supply-corridor-presentation-Full-version.
pdf

24 / EUROPEAN HYDROGEN BACKBONE


Fundamentally, the IRC can be perceived as a source of investment risk for TSOs
and other EHB investors during network buildout. This perceived risk leads to a
upfront financing gap (UFG), which emerges if network operators are not able to
Figure 16
mobilise sufficient market capital to develop the EHB. This section explains the
Structure of the EHB’s main fundamentals of the IRC and UFG, the impact these challenges might have on
financial challenges EHB buildout, and potential measures to mitigate their risks.

4.1 Investment recovery challenge —


conceptual framework

As introduced earlier, the first potential financial challenge—occurring during


the market ramp-up phase—is the IRC. For simplicity, we assume that the EHB
network will be regulated under a typical Regulated Asset Base (RAB) model,
mirroring to a large extent the current gas infrastructure regulatory framework.
The RAB represents the total value of owned infrastructure and is used (alongside
considerations of operating expenses and allowed maximum return on capital) by
regulators to set a revenue cap each year, defining the TSOs’ regulated returns
based on depreciated asset value over time.

Additionally, we can estimate the revenue generated by a pipeline as the amount


of booked capacity times a tariff equal to the assumed network user willingness-
to-pay for hydrogen conveyance. The IRC arises from the financial disparity
between the regulated revenue cap and the real revenue that can be earned
from network users on account of actual network usage.

25 / EUROPEAN HYDROGEN BACKBONE


A simple way to interpret the IRC is presented conceptually in Figure 17. Note
that this graph is not a reflection of the real dynamics of the entire EHB network
but rather a simplification of a single pipeline, used to illustrate the structure of
the IRC framing.

Figure 17 Represented by the yellow area on the left side of the graphic, the challenge
arises during the early years of operation. Even considering the optimistic long-
Level of tariff required to realise
regulated return across different
term financial picture, it is important to mitigate the potential effects of high early
financial phases (utilising a single tariffs hindering hydrogen market development. Building a smaller pipeline to
simplified pipeline model). match the initial low hydrogen capacity booking level—while initially requiring
less investment—is neither an efficient nor a competitive solution: it would fail to
accommodate the expected future hydrogen flows, leading either to additional
costs required to build new lines outside of the initial large-scale buildout or
insufficient transport capacity and a bottleneck for Europe’s decarbonisation
efforts.

Conceptual IRC Example: In this simple illustrative example, assume that the regulator has set the RAB revenue cap
at 100€, that the expected booked capacity is 4 MWh/y in the first year, and that the pipe can transport 20 MWh/y at
maximum capacity.

The TSO is allowed to set the tariff at 25€/MWh = 100€ (RAB) / 4 MWh/y (booked capacity). This tariff is visualised by
the yellow line at the start of market ramp-up phase. If network users are willing to pay a tariff of 25€/MWh, no IRC exists.
However, due to low initial capacity booking level (and subsequently low denominator in the IRC equation), the TSOs
need to ask for the calculated 25€/MWh tariff to earn back their network costs. However, such a tariff (in this example) is
likely to be unacceptably high for first movers. Consequently, if network users are only willing to pay 10€/MWh (visualised
by the blue line in Figure 17), there is a 15€/MWh = 25€/MWh – 10€/MWh difference between the tariffs required to
realise the regulated return and the willingness-to-pay of (initial) network users. This scenario results in an IRC of 60€ =
15€/MWh x 4 MWh.

By contrast, in a mature market where hydrogen capacity booking level matches the maximum capacity of the pipes, the
required tariff would be: 5€/MWh = 100€ (RAB) / 20 MWh/y (capacity booking level). This 5€/MWh is likely lower
than the maximum early market end-user willingness-to-pay. After the market has matured, this would mean that tariffs are
acceptable to network users while also allowing TSOs to recover their investments.

26 / EUROPEAN HYDROGEN BACKBONE


4.2 Upfront financing gap — conceptual framework

One consequence of an IRC—should one arise—is investor concern about the


bankability of the EHB, which manifests as investment risk, preventing them from
providing the necessary capital available to TSOs. While some TSOs will be able
to fully fund the buildout of their portions of the EHB network, many TSOs must
attract additional external capital to do so. In this report, we refer to the capacity
to do so as the financing ability per TSO.

Therefore, in many cases, the UFG arises as a consequence of the projected IRC
and represents the difference between the total required upfront investment prior
to project operation29 and the ability of a TSO to finance the project (Figure 18).
There are cases where TSOs have sufficient capital available but are not able to
invest this capital, as the IRC poses too big of a risk.

Figure 18

Definition of the UFG.

The UFG poses a particular problem for the upfront capital that is reserved
for DEVEX. If TSOs do not have sufficient capital to conduct developmental
activities, the timeline to build a project is directly delayed (this is the first step
in realising a project, as section 3.1 shows). Therefore, the UFG—which impacts
the DEVEX—should be a primary concern of European policymakers aiming to
achieve ambitious decarbonisation goals.

Policymakers could mitigate the challenges associated with the UFG by facilitating
funding or guarantees in an amount appropriate to counter the IRC. In this way,
network development could be sufficiently derisked and able to attract market-
rate investment to finance its buildout.

29 Investment required prior to operation is


composed of CAPEX and DEVEX.

27 / EUROPEAN HYDROGEN BACKBONE


We view investment in the EHB as a necessary step forward for achieving
lowest-cost societal decarbonisation in Europe. For a new venture—especially
at this scale—the path forward is likely to at times be complicated, uncertain,
and involve numerous different stakeholders. Despite these challenges, the
EHB effort remains a vital and strategic investment in the future of the European

5. What to energy system. Hydrogen makes use of plentiful European and neighbouring
resources, serves a multitude of sectors—including those typically viewed as hard

expect from
to decarbonise—and provides connectivity and resilience across the continent.
Simply put, the hydrogen infrastructure network is of critical importance for

the EHB in
achieving energy transition goals while preserving the competitiveness of the EU.

In this paper, we have conceptually framed certain financial challenges that could
2024 potentially arise in the emerging hydrogen market. Future EHB efforts will explore
the size of the financial commitment required for the EHB network development
and compare it with the existing funding mechanisms already available for
hydrogen infrastructure development. In conjunction, we aim to examine the
current and future role of the EU and member states in funding the EHB.

Beyond the financial challenges, there are a variety of considerations related to the
hydrogen value chain and project delivery process that could help to enable the
timely and efficient implementation of the EHB. Each of these ecosystem factors
contributes to the success of the emerging hydrogen market, and in turn provides
some measure of risk mitigation for financiers by streamlining the process and
encouraging hydrogen market development. Future EHB efforts will also recap
the current understanding of these supplemental and ecosystem considerations,
with recommendations for an efficient path forward to implementation.

28 / EUROPEAN HYDROGEN BACKBONE


6.1 Appendix A: selected projects to create EHB by
early 2030s

Overview of selected projects planned for commissioning by early 2030s.

6. Appendix 6.1.1 Corridor A — North Africa and Southern Europe

Italian Hydrogen Backbone (part of SoutH2 and SunsHyne Corridors)


Project partners: Snam
Development phase: Pre-feasibility phase / feasibility phase

The project includes the development of a hydrogen backbone from Sicily to the
export points with Austria and Switzerland, enabling the transport of hydrogen
produced in Northern Africa and Southern Italy to the main national and European
consumption areas. The project supports creation of an interconnected EU
hydrogen market, ensuring diversification and security of supply and positioning
Italy as a hydrogen hub.

The Italian Hydrogen Backbone will be approximately 2,300 km long with


around 75% share of repurposed pipelines and up to 500 MW of compressor
stations. The project would be a major European renewable hydrogen import
artery, serving Italian demand clusters and enabling exports towards Central
and Western European countries via Austria and Switzerland. Snam is currently
analysing the possibility of converting depleted gas storage fields into hydrogen
storage sites that could complement the backbone to mitigate the volatility of the
increasing RES production and provide flexibility to the power system.

SoutH2 Corridor
Project partners: Snam, TAG, Gas Connect Austria and bayernets
Development phase: Pre-feasibility phase / feasibility phase
Website: https://www.south2corridor.net/

The SoutH2 Corridor project is a 3300 km hydrogen pipeline connecting North


Africa, Italy, Austria, and Germany. Led by TSOs that each submitted Project of
Common Interest submissions to the European Commission, it aims to supply
competitive renewable hydrogen to European demand clusters. It utilises >70%
repurposed infrastructure, with new pipeline segments where necessary. The
corridor has trilateral political endorsement, as well as strong support from
companies involved in production (ca. 2.5 Mt/y) and offtake of hydrogen
along the whole corridor. The SoutH2 Corridor plays a vital role in enabling the
transportation of both imported and domestically produced hydrogen.

29 / EUROPEAN HYDROGEN BACKBONE


SunsHyne Corridor
Project partners: Snam, TAG, Eustream, NET4GAS, OGE
Development phase: Pre-feasibility phase
Website: https://www.sunshynecorridor.eu/

The SunsHyne Corridor is a strategic infrastructure initiative promoted by a


group of five leading TSOs – Snam, TAG, Eustream, NET4GAS, OGE – whose
ambition is to enable hydrogen flows from North Africa to Germany supplying
and crossing Italy, Austria, Slovakia, and the Czech Republic. The corridor has
a total length of 3.400 km, a share of 85 % repurposed pipelines, and aims to
offer a capacity of minimum 126 GWh/d in 2030. Each TSO has applied for the
status of Project of Common Interest. Due to its strategic location, the SunsHynde
Corridor will not only enable the development of a common hydrogen market in
Italy, Slovakia, the Czech Republic, and Germany but also in wider Central and
Eastern Europe, supporting competition and security of supply.

H2 Readiness of the TAG Pipeline System (part of SoutH2 and


SunsHyne corridors)
Project partners: TAG
Development phase: Feasibility phase

The project connects the hydrogen pipeline at the Italian-Austrian border


(Arnoldstein) with those at the Austrian-Slovakian border (Baumgarten). It
consists of repurposing one of the three existing natural gas pipelines of the
TAG system to 100% hydrogen, with all associated facilities between Arnoldstein
and Baumgarten. There, it will be connected to the H2-WAG pipeline within
Austria to supply central Austria and southern Germany and will be connected to
EUSTREAM’s hydrogen pipeline.

The bidirectional design of TAG’s 380 km hydrogen pipeline meets the local
needs of customers in Austria and enables Italy, Germany, Slovakia, Czech
Republic, and all of central and eastern Europe to develop a common hydrogen
market, promoting competition and security of supply. The system is optimised
to transport hydrogen from the Snam system at 168 GWh/day capacity from low-
cost production areas in North Africa.

H2 Backbone WAG + Penta West (part of SoutH2 corridor)


Project partners: Gas Connect Austria
Development phase: Feasibility / Pre-FEED phase
Website: https://h2backbone-wag-pw.at/en/home-english/

With the realisation of the project bidirectional cross-border hydrogen transport


possibilities between Slovakia and Austria as well as between Austria and
Germany to the extent of 150 GWh/day (55 TWh/a) are established. The project
connects part for South-North as part of the SoutH2 Corridor initiative and East-
West as part of the H2EU+Store initiative. The project would enable hydrogen
from the south via the TAG-hydrogen pipeline systems in the Baumgarten node.
This setup allows for obtaining hydrogen from different sources in the future such
as North Africa, Ukraine, Germany, Romania, and Croatia. The development of
this project is a precondition to address the hydrogen import need of Austria and
deliver the hydrogen to the large demand centers along the route, in particular
the wider area around Vienna and Linz. Additionally, the project allows for the
connection to storage facilities in Austria, which helps to create security of supply
with hydrogen.

30 / EUROPEAN HYDROGEN BACKBONE


Central European Hydrogen Corridor, Czech part
Project promoter: NET4GAS
Development phase: Pre-feasibility phase
Website: https://www.sunshynecorridor.eu/, www.cehc.eu

The Central European Hydrogen Corridor, Czech part (gas pipeline DN 1.400,
403 km), between the Czech/Slovak border and Czech/German border enables
transport of pure hydrogen of 144 GWh/d starting by the end of 2029 and
aims to create a part of a hydrogen “highway” in Central Europe for transporting
hydrogen from two major hydrogen supply areas outside the EU (mainly Ukraine
and North Africa) as well as the supply areas along the corridor to expected high
demand clusters along the corridor, especially in Germany.

The supply corridor from North Africa will go to Germany through Italy, Austria,
Slovakia, and Czechia and is developed as SunsHyne. The project is promoted
by the following gas TSOs: Snam (IT), TAG (AT), EUSTREAM (SK), NET4GAS
(CZ), and Open Grid Europe (DE).

The supply corridor from Ukraine will go to Germany through Slovakia and
Czechia and is developed as project CEHC. The east-west corridor is promoted
by four gas TSOs: Gas TSO of Ukraine, EUSTREAM (SK), NET4GAS (CZ), and
Open Grid Europe (DE).

H2 Backbone Murfeld
Project partners: Gas Connect Austria
Development phase: Pre-feasibility phase
Website: https://h2backbone-murfeld.at/en/home-english/
With the realisation of the project bidirectional cross-border hydrogen transport
possibilities between Slovenia and Austria to the extent of 33 GWh/day (12
TWh/a) are established. The project enables the transportation of hydrogen from
the South, e.g., from Croatia via Slovenia or Italy to Austria. Hence, it contributes
to the diversification of the future hydrogen supply supporting consumption areas
in Austria, such as Styria, the wider area of Vienna and Linz and surrounding
industrial regions in neighbouring countries.

Slovenian Hydrogen Backbone – Central Region


Project partners: Plinovodi d.o.o.
Development phase: Pre-feasibility phase

Project is the first phase of development of the Slovenian Hydrogen Backbone.


The repurposed part of the project will connect the Slovenian capital Ljubljana with
Austria and will lead to the first hydrogen interconnection point in Slovenia with
Austria. The project will also enable the establishment of a new interconnection
point with Croatia. The repurposed part of the project consists of 165 km of
existing pipelines. Bidirectional capacity of the new hydrogen interconnection
point with Austria is aligned with GCA and is equal to 33 GWh/day (12 TWh/a).
The first phase of the project is expected to be completed by 2029.

In Germany, Corridor A connects to the H2ercules project via the SunsHyne


Corridor and the SoutH2 Corridor.

31 / EUROPEAN HYDROGEN BACKBONE


6.1.2 Corridor B — Southwest Europe and North Africa

CelZa (part of H2Med corridor)30


Project partners: REN and Enagás
Development phase: Pre-feasibility

The CelZa (Celorico-Zamora) is part of the H2Med corridor and is about 242 km
long with a bidirectional capacity of 81 GWh/d (HHV), links and supplements the
development of the BarMar interconnection project, enabling the emergence of a
supply corridor. With the CelZa as an enabler, REN considers a first component
of the Portuguese Hydrogen Backbone with new pipelines between Figueira
da Foz and Cantanhede and the repurposed portion between Cantanhede –
Celorico da Beira – Monforte, allowing the connection of Green H2 Valley at
Figueira da Foz and other producers along the corridor.

Portuguese Hydrogen Backbone


Project promoters: REN
Development phase: Pre-feasibility

The Portuguese Hydrogen Backbone is linked to the CelZa project and includes
a new Figueira da Foz–Cantanhede hydrogen pipeline, about 50 km long, and
three repurposed pipelines: Cantanhede-Mangualde (68 km of a trunkline and
8 km branch line), Mangualde-Celorico da Beira (48 km of a trunkline), and
Celorico da Beira-Monforte (213 km of a trunkline plus 4 km branch line).

This project creates a condition for the production and integration of green
hydrogen, both in Portugal’s central inland region and in the Figueira da Foz
region, which benefits from its proximity to industrial infrastructures and offshore
wind production as part of the objectives pursued by the government.

Spanish Hydrogen Backbone


Project partners: Enagás
Development phase: Feasibility / Pre-FEED phase

By 2030, the proposed hydrogen network will connect the industrial clusters
along the Mediterranean coast and in the north of Spain, where two underground
storage projects could also link to the network. The network will also comprise
pipeline axis along the Via de la Plata and Ebro Valley to harness the potential for
hydrogen production from the rich renewable resources of these areas. Later,
the development of the network will guarantee cohesion between the different
demand regions and integrate the multiple supply points that will be distributed
across the country.

Spain’s long-term ambition is to be one of the main hydrogen suppliers in Europe,


building on its significant solar PV, wind, and hybrid potential to produce green
hydrogen. The national backbone will enable this setup by connecting with France
through a new marine pipeline route from Barcelona to Marseille by 2030 and
later by converting the existing connections via Irún and Larrau to hydrogen. A
new connection between Portugal and Zamora (2030) is also planned.

30 H2Med partners: GRTgaz, Teréga, REN


and Enagás

32 / EUROPEAN HYDROGEN BACKBONE


HySoW (Hydrogen South-West corridor of France)
Project partners: Teréga
Development phase: Pre-feasibility

The project has a capacity of 0.40 Mt/y and consists of 460 km of new and 180
km of repurposed natural gas pipelines for hydrogen transport:
− Connection of the saline cavern storage facility near Lacq to the Iberian-
Franco-German H2Med corridor
− Connection to the renewable energy and hydrogen production hub in Port-
la-Nouvelle
− Connections to key demand centres and additional production sites in the
ports of Bordeaux and Bayonne
HySoW has received explicit support from more than 37 national and international
stakeholders, including public authorities (e.g., French Ministry for the Energy
Transition, Région Occitanie, Région Nouvelle Aquitaine), hydrogen producers
(e.g., H2V, DH2 Energy), and off-takers (e.g., Lafarge, Aerospace Valley, or
BASF). Teréga is also actively cooperating with GRTgaz, Enagas, and REN on
delivering the H2Med corridor.
BarMar (part of H2Med corridor)
Project partners: GRTgaz, Teréga, Enagás, OGE
Development phase: Pre-feasibility / Feasibility

As part of H2Med corridor, the BarMar project will transport up to 2 Mt/y of


green hydrogen between the Iberian Peninsula and France (between Barcelona
and Marseille), which is 10% of the hydrogen consumption anticipated by
REPowerEU. The hydrogen will be mainly produced in the Iberian Peninsula (by
RES) and then transported through the H2Med corridor to supply the industrial
and mobility sectors. By 2040, some imports from North Africa are expected,
which will increase the flows through this corridor. The project will allow to
scale future European hydrogen markets by providing affordable and low-cost
hydrogen by 2030. It will also allow for development of national backbones and
storage projects along the corridor. This project is politically supported by the
announcement of high officials of the European Commission, Portugal, Spain,
France, and Germany.

HY-FEN
Project partners: GRTgaz
Development phase: Pre-feasibility phase

The HY-FEN project aims to develop a French hydrogen transmission network via
pipeline, connecting the Iberian Peninsula (via H2Med) to Germany (H2ercules)
and national storage sites by 2030. Security of supply and flexibility will be
enhanced through access to UGS projects (such as GeoH2 and HySoW) and
future salt cavern projects in Etrez and Tersanne/Hauterives in the Rhône Valley.
HY-FEN will further enhance the Hynframed, MosaHYc, HySoW, and RHYn projects
by providing access to competitive hydrogen from various sources, particularly
imports. Overall, stakeholders of the mentioned projects will gain access to
hydrogen volumes produced/stored outside their immediate periphery, thereby
broadening the market for large hydrogen volumes. In Germany, Corridor B
connects to the H2ercules project to continue supply from HY-FEN (see Section).

33 / EUROPEAN HYDROGEN BACKBONE


6.1.3 Corridor C — North Sea

Hydrogen Network Netherlands


Project partners: Gasunie
Development phase: FID taken

The objective of the Dutch hydrogen network project is to create an open access
non-discriminatory national and cross-border network and for connection with
large-scale hydrogen storage in northeast Netherlands. This network will be
composed of 70%-80% repurposed natural gas pipelines, with the addition of
new pipes in areas where connections are not yet available. Once complete, the
hydrogen network will connect onshore and offshore hydrogen sources with
consumers in the Netherlands, Germany, and Belgium. As such, the hydrogen
network will form a vital part of the EHB and help kickstart the shift towards
carbon-neutral energy in Europe.

Capacities of the total hydrogen network and the different cross-border


connections will be gradually increased. The industrial clusters are planned to
be connected from 2025-2026. The entire backbone will be operational from
2030 and will have a capacity between 10 GW and 15 GW.

Danish-German Hydrogen Network (Danish backbone West and


Hyperlink 3)
Project partners: Gasunie, Energinet
Development phase: Feasibility / Pre-FEED phase

The 561 km project includes construction of a dedicated hydrogen pipeline


between Denmark (Danish backbone West) and Germany (Hyperlink 3 project) to
transport up to 10 GW of hydrogen from Denmark to end customers in Germany.
The German part of the project will include repurposing of the existing natural
gas infrastructure to hydrogen transportation (114 km) and construction of new
hydrogen pipelines (84 km). The project Hyperlink 3 is an integral part of the
Hyperlink system, developed by Gasunie as well as the future German National
Hydrogen Network. It will provide a possibility to transport hydrogen from the
interconnection point Ellund, domestic production sides in Schleswig-Holstein
and northern Lower Saxony and hydrogen receiving terminal in Brunsbüttel,
to the German final consumers as well as provide access to the underground
hydrogen storage in Harsefeld, project SaltHy, developed by Storengy.

HyONE (Hydrogen Offshore Network)


Project partners: Gasunie
Development phase: Feasibility / Pre-FEED phase

HyONE focuses on offshore hydrogen transport to link the European onshore


hydrogen network with offshore wind farms in the Dutch and German economic
zones in the North Sea as well as offshore connections to Norway and Denmark.
HyONE enables a large-scale rollout of offshore electrolysis and the ramp-up
of the national and cross-border North-West European hydrogen market. It links
offshore hydrogen production sites connected to Hydrogen Network Netherlands
and demand centres in Western Europe and provides interconnectors to
Germany, Belgium, Denmark, and potentially to the UK. HyONE is part of the
CH2-4EU project, designed to enable the transport of renewable and low-carbon
hydrogen along the HI West hydrogen corridor. Planned capacities are 30 GW
for the network and 6 GW for the interconnector between the Netherlands and
Germany.
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H2T (Hydrogen Offshore Transport)
Project partners: Gassco on behalf of the H2T group31
Development phase: Feasibility / Pre-FEED phase

Norway wants to actively contribute to the rapid development of the hydrogen


market in Germany and the EU. To realise the fastest possible import of about
4 Mt/y of hydrogen and ensure the rapid availability thereof, the country also
jointly plan to use blue hydrogen for a transition period. Germany and Norway
want to work together closely to ensure a reliable energy supply for Europe that
is based on an increasing share of renewable energy. Both countries aim to
be completely climate-neutral by mid-century, Germany by 2045 at the latest,
Norway by 2050.

AquaDuctus
Project partners: GASCADE, Fluxys
Development phase: Feasibility / Pre-FEED phase

AquaDuctus will be an offshore hydrogen pipeline and connect the first large-
scale offshore hydrogen wind farm site SEN-1 (up to 1 GW generation capacity)
located 150 km northwest of the island of Heligoland. The 48” offshore pipeline
will transport green hydrogen to Wilhelmshaven, Germany. Through an additional
onshore pipeline, a direct link to Hyperlink will secure downstream connection to
hydrogen users. AquaDuctus will be capable of picking up additional hydrogen
quantities, e.g., from further hydrogen wind farm sites, re-powering existing wind
farms, and providing the interconnection of adjacent offshore hydrogen pipelines
(e.g., from DK, NL, UK or NOR) aiming for export of local hydrogen production
to the European market. Hence, AquaDuctus (total length of approximately
250 km) will already be designed to transport up to approximately 20 GW of
hydrogen capacity.

Belgium Hydrogen Backbone


Project partners: Fluxys
Development phase: FEED phase

Fluxys has the ambition to link hydrogen import facilities and local hydrogen
production in Belgium with industrial clusters through an interconnected hydrogen
backbone. This project aims to kickstart the development of the hydrogen
economy in northwest Europe. The import of hydrogen in maritime ports and
interconnections with adjacent countries such as Germany, the Netherlands, and
France are foreseen to ensure security of supply and flexibility. Repurposing
existing infrastructure is put forward to reduce the system cost of the hydrogen
value chain. The first phase of infrastructure is planned for implementation in
2026.

In Germany, Corridor C connects to the H2ercules (see Chapter ) to continue


supply from AquaDuctus, H2T, Hydrogen Network Netherlands, and Belgium
Hydrogen Backbone.

31 The H2T group is a potential hydrogen


producer and infrastructure owner.

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6.1.4 Corridor D — Nordic and Baltic regions

Nordic-Baltic Hydrogen Corridor


Project partners: Amber Grid, Conexus Baltic Grid, Elering, Gasgrid Finland,
Ontras, Gaz System Poland
Development phase: Pre-feasibility phase

The aim of the Nordic Baltic Hydrogen Corridor project is to enable transport
of 7-11 Mt of green hydrogen produced in the Nordic and Baltic Sea region
to Central Europe and demand centers along the corridor covering up to
100% of REPowerEU domestic hydrogen supply targets. The corridor project
aims to integrate the Nordic, Baltic, Polish, and German hydrogen markets
with connecting hydrogen infrastructure and to trigger further infrastructure
developments to connect additional hydrogen suppliers and consumers in these
countries. The project is aiming to foster market processes between producers,
consumers, and trading companies that might enter the hydrogen markets in
Finland, Estonia, Latvia, Lithuania, Poland, Germany, and beyond.

The Nordic Hydrogen Route – Bothnian Bay


Project partners: Gasgrid Finland, Nordion Energi
Development phase: Pre-feasibility phase

The Nordic Hydrogen Route is an initiative between Gasgrid Finland and


Nordion Energi to accelerate the creation of a hydrogen economy by building
up cross-border hydrogen infrastructure in the Bothnian Bay region and an
open hydrogen market by 2030. The aim of the Nordic Hydrogen Route is to
drive decarbonization and support regional green industrialisation, economic
development, and European energy independence. The region has abundant
RES energy sources and is one of the key regions of Europe for green hydrogen
production. In the Nordic Hydrogen Route project, the companies seek to
develop a network of pipelines that would effectively transport energy from
producers to consumers to ensure they have access to an open, reliable, and
safe hydrogen market.

Baltic Sea Hydrogen Collector


Project partners: Nordion Energi, OX2, Gasgrid Finland and Copenhagen
Infrastructure Partners
Development phase: Pre-feasibility phase

The Baltic Sea Hydrogen Collector will be a newly built, large-scale, cross-
border, offshore, bidirectional transmission system of 1,250 km in the Baltic Sea,
promoted by Gasgrid Finland Oy and Nordion Energi AB, and supported by
co-investors OX2 AB (OX2) and Copenhagen Infrastructure Partners (CIP).

As one of the core systems envisioned as part of the EHB, the Baltic Sea
Hydrogen Collector is an offshore pipeline project with the potential capacity of
296 TWh/y that will connect mainland Finland and Sweden with Finnish Åland
island and Germany by 2030. The offshore project might also be connected to
other energy islands in the region such as Gotland and Bornholm in Sweden
and Denmark. The aim of the Baltic Sea Hydrogen Collector is to unlock the
significant offshore wind potential in the Bothnia Bay and Baltic Sea region,
creating a booming hydrogen market and connecting both supply and demand.

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Interconnector Bornholm-Lubmin
Project partners: GASCADE, Energinet
Development phase: Pre-feasibility phase
The envisioned 140 km cross-border pipeline from Bornholm to Lubmin, located
in the priority corridor of BEMIP Hydrogen, will connect the large-scale hydrogen
production and compressor station on Bornholm with large demand centres in
Germany and central Europe through GASCADE’s repurposed onshore hydrogen
pipeline network. The project intends to construct the first hydrogen pipeline
in the Baltic Sea while supporting the emergence of an EU-wide network for
hydrogen transport, giving access to multiple network users on a transparent and
non-discriminatory basis. The pipeline will enable the planning of several projects
developing large-scale hydrogen production on Bornholm from gigawatt-scale
offshore wind in the area already by 2027. The 42” pipeline is expected to
transport upwards of 4 GWel by 2028-2030 while enabling additional capacity
of up to 10 GW, meaning the pipeline can furthermore enable and enhance an
accelerated development of additional offshore wind in the region.

6.1.5 Corridor E — East and Southeast Europe

Central European Hydrogen Corridor CEHC32


Project partners: TSO of UA, EUSTREAM, NET4GAS, OGE
Development phase: Pre-feasibility
Website: www.cehc.eu

The Central European Hydrogen Corridor (CEHC) enables competitive hydrogen


transport from renewable sources in Ukraine through Slovakia and the Czech
Republic to Germany and further in the EU. The project aims to be operational
by 2030, with later target transport capacity of up to 1.5 Mt/y (144 GWh/d).
The overall length of the corridor is about 1,225 km made up of more than 90%
of repurposed pipelines. The project is currently in the pre-feasibility phase,
focusing on assessment of the technical feasibility and the investment required to
prepare the existing natural gas infrastructure to transport hydrogen.

HU/SK Hydrogen Corridor Project


Project partners: Eustream, FGSZ
Development phase: Pre-feasibility

The project is critical for the development of EHB Corridor E, connecting


southeastern Europe to the backbone. Initially, by 2030, hydrogen transported
through Corridor A (Italy – Austria – Germany) can be channeled through Slovakia
into Hungary for an early access to the backbone. The project also provides
access for large hydrogen customers in the Transdanubian hydrogen valley to the
backbone, such as refinery and fertilizer industry. The southeastern region will be
a net exporter by 2040, and most of the hydrogen can be transported through
this corridor to the central parts of Europe.

32 Note that Czech and partially SK parts of


CEHC are also part of SunHyne Corridor,
see Corridor A.

37 / EUROPEAN HYDROGEN BACKBONE


RO/HU Hydrogen Corridor Project
Project partners: Transgaz, FGSZ
Development phase: Pre-feasibility

The project is critical for the development of EHB Corridor E, connecting


southeastern Europe to the backbone. The southeastern region could be a net
exporter by 2040, and the majority of the hydrogen can be transported through
this corridor to the central parts of Europe. The area near Algyo has the best
potential for solar PV-based renewable electricity production in Hungary, which
makes it an ideal development zone for electrolyser projects. The Hungarian
natural gas storage operator considers development of hydrogen storage in the
vicinity of the pipeline utilising depleted gas fields and three natural gas storages.

The description of the hydrogen Backbone WAG + Penta West project, which
enables hydrogen transportation from Slovakia – Austria - Germany can be found
in the project description in Corridor A. It is also part of the SoutH2 Corridor.

In Germany, Corridor E connects to the H2ercules via CEHC and CGHI projects
and also to the HyPipe Bavaria project via H2 Backbone WAG + Penta West.

GR/BG H2 Interconnection
Project partners: DESFA, Bulgartransgaz
Development phase: Feasibility

The GR/BG H2 Interconnection corridor aims to connect the future hydrogen


networks between Bulgaria and Greece at the first hydrogen interconnection
point in the Кulata/Sidirokastro region on the Bulgarian-Greek border. The new
hydrogen interconnection is indispensable, as it will enable hydrogen transport
from southeastern Europe to the north and continue the efficient interoperability
between the two countries. The project on Bulgarian territory includes potential
exit points for hydrogen deliveries from Bulgaria to Romania through the future
hydrogen network of Bulgartransgaz. The entire corridor is currently being
developed and is expected to be operational in 2030.

Dedicated Hydrogen Pipeline


Project partners: DESFA
Development phase: Pre-feasibility

The Dedicated Hydrogen Pipeline project consists of a new, approximately 540


km long hydrogen pipeline with two compressor stations in Patima and Nea
Messimvria, and a possible branch comprising an additional 250 km. The aim
of the project is to transport pure hydrogen mainly from the production regions
in southern and eastern Greece to the interconnector with Bulgaria for further
export and to the Kavala region, where a future storage facility will be located. The
project will enable the transport and supply of hydrogen for local consumption in
industrial areas with hydrogen demand near Athens and Thessaloniki. This new
36”pipeline will run in parallel to the existing natural gas pipeline. The project is
expected to be operational in 2029.

38 / EUROPEAN HYDROGEN BACKBONE


6.1.6 Transmission Network in Germany

Flow - Making Hydrogen Happen


Project partners: Ontras, GASCADE
Development phase: FEED phase

GASCADE, ONTRAS Gastransport GmbH, and terranets bw GmbH have


developed the project “Flow – making hydrogen happen” to connect the Baltic
Sea with Czech Republic and Poland and southern Germany. The flow foresees
the repurposing of existing infrastructure to supply clean hydrogen from local
sources in and around the Baltic area. Clean hydrogen produced onshore and
offshore in the Lubmin region and Baltic Sea will be transported south. Hydrogen
will flow to the Czech-German border and further to the Net4Gas network.
This cooperation is formed under the title of the Czech-German Hydrogen
Interconnector (CGHI), which will ensure an integrated cross-border hydrogen
network from the Baltic Region to central European countries.

H2ercules
Project partners: OGE
Development phase: Pre-feasibility and feasibility phases

The H2ercules network aims to create a super-sized hydrogen infrastructure for


Germany and is a substantial part of the German Hydrogen Core33 network,
which is planned to be realised by 2032. The H2ercules pipeline network by
OGE consists of about 2,000 km of pipelines. For the most part, this will mean
converting pipelines from the existing natural gas network to hydrogen. On key
routes, where pipelines with sufficient capacity for conversion are not available
in the short term, H2ercules relies on new construction to support the faster
ramp-up of the European hydrogen economy. The H2ercules network will
establish connection to five European countries - Norway, the Netherlands,
Belgium, France, and Czech Republic - via pipeline and a terminal for the import
of hydrogen derivatives by ship. The H2ercules pipeline network will also enable
the connection of domestic green hydrogen production and thus connect new
sources to the existing pipeline network.

33 FNB Gas (2023). Hydrogen core


network. Source: https://fnb-gas.de/en/
hydrogen-core-network/

39 / EUROPEAN HYDROGEN BACKBONE


Czech-German Hydrogen Interconnector CGHI
Project partners: GASCADE, NET4GAS, OGE
Development phase: Pre-feasibility phase
Website: https://www.cghi.eu/

The Czech-German Hydrogen Interconnector (CGHI) will provide a hydrogen


transportation route between potential hydrogen supply areas in the Nordic-Baltic
region, via the 150 km 100% repurposed pipeline over Czech Republic to large
hydrogen demand clusters in southern Germany. Additionally, this corridor will
supply hydrogen customers in the Czech Republic along this corridor, mainly to
the expected hydrogen cluster in Northern Bohemia.

With an initial technical capacity of 144 GWh/d, the project aims to transport
hydrogen as of 2030. The total length of the corridor is 1,068 km and consists
of 90%-100% repurposed pipelines.

doing Hydrogen
Project partners: ONTRAS Gastransport GmbH
Development phase: feasibility phase/pre-FEED
Website: https://www.doinghydrogen.com/

Doing hydrogen is a 550 km hydrogen transmission system that connects projects


in Mecklenburg-Western Pomerania, Brandenburg, Berlin, Saxony, and Saxony-
Anhalt to form a high-performance hub: production, transport, storage, and
consumption all under one roof. The operation of doing hydrogen will start in
2026. In the medium-term Alongside Green Octopus Mitteldeutschland, doing
hydrogen is one of the ONTRAS projects that has been selected by the German
Federal Ministry of Economics and Technology as Important Projects of Common
European Interest (IPCEI) in 2021.

Green Octopus Mitteldeutschland


Project partners: ONTRAS Gastransport GmbH
Development phase: feasibility/pre-FEED
Website: https://www.ontras.com/en/go

The Central German Chemical Triangle needs green hydrogen. The same is
true for the industries in Saxony-Anhalt and the steel region in Salzgitter/Lower
Saxony. Green Octopus Mitteldeutschland (GO!) is the future transport route for
this hydrogen: GO! connects the regions and integrates the future hydrogen
storage facility in Bad Lauchstädt. From 2026, GO! will ensure the secure
transport of hydrogen with a network of pipelines covering around 305 km. GO!
will also make use of other hydrogen pipelines to integrate these regions into
the growing EHB. A connected cavern storage facility with a working gas volume
of 50 million cubic meters supports the hydrogen infrastructure and ensures a
balance between supply and demand. Along with doing hydrogen, GO! is one
of the ONTRAS projects that has been selected by the German Federal Ministry
of Economics and Technology as IPCEI in 2021.

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Hyperlink 1 & 2 & 3
Project partners: Gasunie
Development phase: feasibility phase/pre-FEED
Website: https://www.hyperlink-gasunie.de/en

A hydrogen pipeline system of the Hyperlink 1 and 2 projects will connect the
Dutch and German hydrogen networks. As a central part of the hydrogen network
planned by Gasunie, the pipeline will run from the border at Oude Statenzijl
and Bunder Tief through Germany to the Hamburg region. It also connects
a storage facility near Nüttermoor and the Bremen region with Leversen. The
first consumers and producers within the area covered by Hyperlink 1 will be
able to be connected in 2026-2027. The Hyperlink 2 project is expected to be
completed and operational by 2029 to supply a steel plant in Salzgitter. The
project has an IPCEI status. In Heidenau, Hyperlink 3 joins up with the other
Hyperlink sections to enable the transmission of hydrogen to customers in other
parts of Germany too.

Hyperlink 4 & 5
Project partners: Hyperlink 4 – Gasunie; Hyperlink 5 – Gasunie and
Thyssengas
Development phase: feasibility phase/pre-FEED
Website: https://www.hyperlink-gasunie.de/en
The Hyperlink 4 project will enable the transfer of imported hydrogen from the
Wilhelmshaven terminal and Norway to northwestern Europe. The Wilhelmshaven
terminal will be directly connected to the hydrogen network. The Hyperlink 4
project will enable direct supply to the major industrial clusters and urban centres
of Hamburg, Bremen, and Hanover via the Hyperlink 1 and 2 pipelines and to
the Ruhr region via Hyperlink 5. The Hyperlink 4 and 5 projects are candidates
for PCI status and are expected to be in operation by 2030.

41 / EUROPEAN HYDROGEN BACKBONE

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