Impact assessment for a hydrogen project

MosaHYc is the first cross-border hydrogen infrastructure project in Europe, launched in March 2020 by Creos and GRTgaz. This pioneering project is expected to serve as a model for other regions and shape the regulatory landscape. The stakes are high. How can mosaHYc ensure it meets regulatory guidelines, such as the EU’s Hydrogen and Decarbonised Gas Market Package? Magnus Energy assessed the project’s compatibility with these guidelines, helping mosaHYc to secure a green light for implementation.

A pioneering hydrogen project

MosaHYc – Moselle Saar Hydrogen Conversion— is the first cross-border hydrogen infrastructure project in Europe, launched in March 2020 by Creos and GRTgaz. This pioneering project has been recognised by the EU as a project of common interest (PCI) and has an investment volume of 110M€. MosaHYC will establish 90 km of hydrogen infrastructure by the end of 2027 in the Moselle-Saar region, which should have an annual capacity of 50k tons of H2.

As one of the first projects of its kind, the results and best practices from mosaHYc will be relevant for future European cross-border projects in hydrogen. Now ready for the green light for implementation, mosaHYc is poised to deliver best practices for the nascent hydrogen sector.

Figure 1. The mosaHYc infrastructure

The EU Hydrogen & Decarbonised Gas Package

The EU Hydrogen & Decarbonised Gas Market Package sets the scene for the hydrogen sector. To a large extent, the Package encourages cross-border cooperation and creates facilitating conditions for cross-border projects to materialise. Yet, open questions for actual national implementation are abundant. To implement a large infrastructure project that goes into operation in 2027, preparations need to start well in advance, even before the approval of the final EU package. Project plans need to be based on the draft version of the EU’s package to identify gaps and red flags on time. This is especially relevant for infrastructure projects which cope with high upfront investments. 

Our contribution: a solid regulatory assessment

The project reached out to Magnus Energy to analyse mosaHYc’s compatibility with the requirements of the EU’s Hydrogen and Decarbonised Gas Market Package. The key questions our experts worked with : 

• What gaps or areas of concern may bear risk for the project’s stakeholders and its overall implementation? 
• How will the feasibility of the project be impacted by the EU Decarbonisation Package? 

1. Comprehensive Framework

It covers the following topics:

Our comprehensive assessment framework ensured that all aspects covered in the EU Hydrogen and Decarbonised Gas Market Package were considered in the impact assessment.

• Other requirements: infrastructure planning, data exchange requirements, and consumers. 
• Regulation-related roles & responsibilities: unbundling requirements and third-party access to H2 grids. 
• Hydrogen-related regulation: repurposing (H2), additionality, storage, and blending.
• Cross-border market arrangements: cross-border H2 market & infrastructure operation, expansion (including connection to the European Hydrogen Backbone), and H2 certification.

2. Compliance and risk analysis

Next, we performed a compliance and risk analysis. This provided a full overview of all aspects involved, their interdependencies, and their current compliance status. 

Besides deep-diving into the regulation and the projects’ characteristics, we believe you need to listen to the needs and positions of all involved stakeholders to create a common understanding and buy-in. Therefore, our experts interviewed all relevant stakeholders and integrated their points into the final assessment.

3. Solutions and recommendations

Using these insights, our experts were able to provide solutions and recommendations, hereby guiding the project forward.

The result? Moving forward with confidence

Based on Magnus Energy’s assessment, Creos and GRTgaz obtained confidence that mosaHYc project can be executed based on the evolving EU regulation. The network operators became aware of the specific challenges created by the regulatory changes and are confident that all relevant aspects have been addressed and will be manageable.

Milestone taken

Since then, the project has announced a partnership with steelmaker ROGESA Roheisengesellschaft Saar mbH, a joint subsidiary of the steel companies Dillinger and Saarstahl AG. The partnership works towards the transport of hydrogen to the Dillingen steel site, where the production of CO2-reduced steel will start. In this way, it creates the first open-access hydrogen transport network to link France and Germany. 

Since then, GRTgas obtained a positive investment decision for mosaHYc while the German part of the project received an IPCEI funding permit. In April, mosaHYc further announced a partnership with steelmaker ROGESA Roheisengesellschaft Saar mbH, a joint subsidiary of steel companies Dillinger and Saarstahl AG. The partnership works towards the transport of hydrogen to the Dillingen steel site, where the production of CO2-reduced steel will start. In this way, all partners aim to create the first open-access hydrogen transport network to link France and Germany. 

Learnings for other hydrogen projects 

The Hydrogen & Decarbonised Gas Market Package sets the scene for the nascent hydrogen sector. To a large extent, the package encourages cross-border cooperation and creates facilitating conditions for cross-border projects to materialise. Yet, it is also associated with several gaps and risks for stakeholders.

Many other hydrogen infrastructure projects in Europe could benefit from the lessons learned during this project. The main areas of concern, listed below, apply to any of the European hydrogen projects:

Figure 2. Hydrogen & Decarbonised Gas Market Package: areas of concern

Our experts are here to guide you. Reach out to principal Ksenia Tolstrup or managing partner. Alexander van der Mark to learn more.