The European Union, as part of the European Green Deal, has identified hydrogen as one of the key sources for achieving carbon neutrality, calling on oil and gas companies to propose and study possible applications of green gas in the existing European network. Snam has taken up this challenge and is at the forefront of hydrogen research, recognising the considerable benefits that could be derived from its use and production and seeing in this gas an important opportunity to pursue not only its own decarbonisation process, but also that of the country. In fact, hydrogen can be produced from renewable energy sources, while promoting ‘sector coupling’ and the decarbonisation of hard-to-abate sectors. For this reason, the 2020-2024 Strategic Plan provides that 50% of the investments in the Plan will be allocated to the H-readiness of the infrastructures and that approximately Euro 150 million to the development of the new business.

Collaborations and partnerships along the entire hydrogen chain will be of fundamental importance, allowing Snam to strategically position itself for the future, to internalise the expertise of leading companies in the sector, and above all to make a concrete contribution to national and European decarbonisation objectives. In 2020, Snam started working with Ferrovie dello Stato Italiane and Alstom to convert the first railway lines from diesel to hydrogen. The agreement already provides for the conversion of about 13 sections for a total length of about 700 km and the installation of the first fuel cells with a capacity of 45 MW.

In 2021, Snam also plans to build the first “Fuel Cell pilot projects”, hydrogen-ready pilot plants serving the transportation network in which the fuel cells, although initially powered by methane from the gas network, are able to receive as input a mixture of hydrogen and natural gas with up to 50% hydrogen. Snam will participate directly in this experiment, also installing fuel cells for its own operations with a capacity of 5.2 MW.

Among the main initiatives aimed at developing the green gas value chain through strategic partnerships and acquisitions, of particular relevance are the agreements with ITM Power, a producer of membrane electrolysers, Tenaris, one of the world’s largest producers and suppliers of steel pipes, and De Nora. The latter, in which Snam acquired a 33% stake from Blackstone, is a global leader in alkaline electrodes, essential components for the production of alkaline electrolysers, and has established several partnerships with numerous fuel cell operators. In addition, it also holds a 34% stake in ThyssenKrupp Uhde Chlorine Engineers (TKUCE), a joint venture with ThyssenKrupp that is one of the world leaders in water electrolysis and involved in several large projects for the production of green hydrogen. The leadership of De Nora also extends to sustainable energy and water treatment technologies (disinfection and filtration) for which it has a distinctive expertise in electrochemistry.

Given De Nora’s special features, Snam will be able to strengthen its technological positioning, in particular for the production of green hydrogen and water treatment. Finally, De Nora is a potential first asset for a new energy transition investment platform with a focus on hydrogen, of which Snam would be anchor investor and which will be launched in 2021, with the aim of increasing its exposure to energy transition projects and technologies in a balanced and disciplined manner, as well as responding to the growing interest from investors on activities in favour of energy transition and decarbonisation. During the year, Snam extended its commitment to the hydrogen value chain beyond national borders: the Group signed an agreement with H2Pro, an Israeli startup with which Snam will collaborate in the production of green hydrogen from the decomposition of water using E-TAC technology (developed by the startup itself) and with which it will implement joint research projects in the practical application of these technologies with a view to participating in European calls for tenders. Snam’s non-European commitment has also been extended to India, where it has entered into a partnership with Greenko to develop the hydrogen supply chain, studying ways of producing green gas from renewables, designing hydrogen-ready infrastructure and applying these solutions in both industry and transport, as well as studying the use of fuel cells in mobility.

Lastly, in August, Snam and Pipechina (China Oil and Gas Piping Network Corporation, a company that has just been set up by the Chinese government to oversee the development and management of gas infrastructure in the country) signed a Memorandum of Understanding on strategic cooperation for technical support activities (in transport, regasification and natural gas storage infrastructure), research and development in the energy transition in China (including experimentation in the hydrogen sector) and possible joint investments.

Also in China, the provision of technical services continued in 2020, mainly in the storage business, to major State-owned companies in the energy sector.

The creation of an H2 molecule

Hydrogen, the first element in the periodic table and the most abundant in the universe, does not occur naturally, but can be produced through a wide range of chemical and physical processes and is suitable for transport in existing pipelines, and is an efficient and cheaper means of storing energy than batteries: 1 kg of hydrogen is enough to power a fuel cell car for 100 km, heat a house for two days and produce 9 kg of steel from raw iron.

Grey hydrogen (Icon)

Currently, it is mainly employed for industrial uses and is obtained from natural gas, through a thermo-chemical conversion process with the production of CO2 (grey hydrogen).

Blue hydrogen (Icon)

To this can be added CO2 capture and storage (CCS) technology for ‘decarbonised’ hydrogen (blue hydrogen), allowing energy-intensive hard-to-abate sectors such as steel and refining to take important steps towards decarbonisation.

Green hydrogen (Icon)

However, the most promising route for the development of hydrogen is the production of green hydrogen, generated through electrolysis of water, in which electricity is used to “break down” the water into hydrogen and oxygen without the emission of any CO2 at the point of release.

Snam, national and international commitment in hydrogen

In order to promote the use of hydrogen and encourage research into applications that can effectively contribute to national and European decarbonisation, Snam is engaged in advocacy activities by participating in numerous institutional and association forums at national and international level:

Through collaboration with other major players in the sector, Snam has won three grants under the Fuel Cells and Hydrogen Joint Undertaking, which provide access to funds and pilot projects at European level and create new end-use partnerships.

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