The MOU (memorandum of understanding) between the huge German utility E.ON and Australia’s Fortescue Future Industries (FFI) promises ‘up to 5 million tonnes per annum’ of green hydrogen delivered to Europe by 2030. This will provide the energy to replace about one third of Germany’s energy imports from Russia. Andrew Forrest, FFI’s leader, continues to take by far the largest role in pushing for a hydrogen future around the world.

If the ambition is realised – and the details are sufficiently sparse in the press release to suggest that the project is not yet fully thought out – the implications for the growth of hydrogen are very striking.

· If the green hydrogen is produced by water electrolysis using solar electricity, this single project will require about 150-180 gigawatts of new PV capacity. That is about 5 times the UK’s entire renewable generation fleet, principally solar and wind[1]. Total global solar installations are running at just over 200 gigawatts this year so the FFI requirements are equivalent to about 10 months of world PV additions.

· The amount of electricity required will be just over half the UK’s current electricity supply or approximately half of one per cent of world power generation.

· The FFI production sites will probably install large scale battery capacity and I make a guess that this will mean that the electrolysers can run 50% of the hours in the year. This implies that the FFI sites will need about 80 gigawatts of electrolyser capacity. There’s probably less than 1 gigawatt of water electrolysers working in the world today. The EU has an ambition for 40 GW by 2030 or about half the FFI target.

· The electrolyser demand for this project alone would use up all the manufacturing capacity of the industry in 2029, at least according to a simple spreadsheet I use.

· The total hydrogen produced today in North West Europe is about 3.5 million tonnes, meaning that the E.ON/FFI project will more than double local availability.

· There is, I think, only one vessel operating today that is capable of shipping liquid hydrogen. The Suiso Frontier is newly commissioned and was built to travel between Australia and Japan. It carries about 75 tonnes when fully loaded. Assuming a five week journey time, the project would need at least six thousand ships of this size. Of course the actual vessel size will increase enormously between 2022 and 2030 but the need for investment now in building hydrogen-compatible shipping is clear. One thing we should be clear about: hydrogen carriers will be highly specialised ships that require very careful engineering.

· One estimate is that transporting liquid hydrogen by ship will add about $1 per kilogramme to its cost. This means that the end user will need to pay about 3 US cents per kilowatt hour of energy, just for transportation. That alone is more than 50% more than the typical price of natural gas in Europe before the current crisis. The transition to hydrogen isn’t going to be cheap and, incidentally, it would be much cheaper to create the hydrogen in North Africa and then transport it by pipeline to Germany.

· There are currently no Liquified Natural Gas (LNG) terminals in Germany although construction of one is now planned. Germany has therefore no experience in bringing in liquid gas for distribution into the natural gas grid.

· In all probability, much of the hydrogen will arrive into Rotterdam. Rotterdam and Antwerp have done more than any other European ports to prepare for the growth of hydrogen. But the scale of import for the FFI project will be challenging to manage. The port says it will be able to take hydrogen off carriers and put into a pipeline network that will take it to North Rhine Westphalia, but only in 2030. FFI will have to get Rotterdam to speed up its hydrogen investment.

· Once in Germany, natural gas pipelines will need to be refitted to carry hydrogen. This is possible and widely discussed among the main gas networks in Europe. But it will require major investment and a clear decision to quickly phase out natural gas that would otherwise occupy these pipelines. The amount of energy to be produced by FFI for E.ON would require about two standard ’48 inch’ pipelines for the 5 million tonnes of hydrogen to be transmitted to users in Germany. It seems possible, but will require billions of Euros of investment.

The world’s future is now dependent to a striking degree on FFI’s ability to push forward its many hydrogen projects forward around the globe, of which the E.ON scheme is just a small part. Andrew Forrest’s commitments to decarbonisation are clear but the scale of his ambitions may exceed the company’s ability to finance his projects. He needs to work with the large oil and gas companies to take his work forward as fast as possible.

[1] I have assumed that H2 is transported in liquid form and made an allowance for the high energy costs for liquefaction. Hydrogen, or its derivative ammonia, will also probably be used to power the ships that transport the energy.