Europe’s energy crisis is rooted in its love affair with natural gas, and now its citizens are paying the price for dependence on gas piped in from Russia. At the same time, Europe’s lawmakers and businesses are searching for an alternative that could keep its homes warm and power factories yet help the continent reach its climate goals.
One answer may be in a fuel that burns just like natural gas but uses hydrogen to help the continent reach its carbon goals. At a proposed hub on the northern coast of Germany, Marco Alverà is planning to deliver such gas — a clean and affordable synthetic substitute for the fossil fuels that Europe is importing in vast quantities at high cost.
“We are the cheapest way to replace oil and gas and coal without having to change the way we think about energy,” Mr. Alverà, 47, said over a lunch of pizza at the storefront his company has set up in Wilhelmshaven, a port city in northwest Germany. “We can go in the same ships, the same pipes, the same factories.”
Hydrogen, an emissions-free fuel made from water, features prominently in plans to run factories, power airplanes and heat homes in the future, and Europe’s energy crisis is only intensifying that interest. But the electrical process to create hydrogen gas typically results in abundant carbon dioxide, a greenhouse gas. Hydrogen can be made cleanly — using renewable electricity — but until now the costs have been too high.
Mr. Alverà and his company, Tree Energy Solutions, or TES, attempt to overcome these problems by creating a synthetic “green” methane — the main ingredient in natural gas — from hydrogen that’s made using renewable energy and carbon dioxide, generated as a byproduct of different manufacturing process. The fuel would be usable where natural gas is used but release less greenhouse gases. And it would not come from Russia.
To minimize costs of making clean hydrogen, the company would sign deals to use giant solar farms in parts of the world that get a lot of sun, like the Persian Gulf, or where hydroelectric power is abundant. The gas could be liquefied and shipped via tanker, like liquefied natural gas.
The plan is audacious, and faces environmental and technological obstacles. But it recently won serious backing from the German government, which signed a deal with TES to help build and run a floating liquefied natural gas terminal in Wilhelmshaven — the fifth such terminal approved in recent months as lawmakers race to find alternatives to Russian gas.
Eventually this floating unit would be replaced by a permanent facility built with an initial investment of 1.5 billion euros (about $1.5 billion). This terminal would be able to handle conventional liquefied natural gas as well as Mr. Alverà’s green gas, and have the capacity to bring in 10 percent of the energy needs of Europe’s largest economy.
TES is attracting investors and announced in July that it had raised €65 million in its second fund-raising drive. Part of the appeal, supporters say, is that Germany and Europe will need to import alternatives to the Russian gas and other fuels that they are trying to phase out because of climate change and geopolitical concerns.
Governments in Europe and elsewhere are gearing up to spend huge sums to support hydrogen — even though how it will be made, transported and used is less than clear. Mr. Alverà’s plan, some say, offers a pathway.
“We have to get into something,” said Patrick Lammers, a chief operating officer of E.ON, a large German utility, which needs to figure out how it is going to supply millions of customers across Europe.
E.ON is putting some of its chips on Mr. Alverà’s project for several reasons, including Wilhelmshaven’s promise as an entry route into Germany’s industrial heartland. TES offers a fuel that is “not a very different technology” from liquefied natural gas, Mr. Lammers said, and so won’t require much adjustment.
The initiative received a boost on Wednesday when Fortescue Future Industries, which is controlled by Andrew Forrest, an Australian mining tycoon who has become a green energy advocate, said it would invest €130 million in TES and the Wilhelmshaven terminal. The two companies agreed to develop facilities in as-yet-unnamed locations that would furnish enough hydrogen to power more than one million homes.
“We both believe this is going to be a massive industry, that it is going to take fossil fuels out at some point,” said Mark Hutchinson, the Australian company’s chief executive.
TES’s approach requires very little adaptation by heavy industrial users of natural gas. The fuel could be transported in existing ships and pipelines, and it would make use of the many multibillion-dollar gas liquefaction plants that already exist. Companies are hesitant to build more of these plants, despite the pressure to find alternatives to Russian gas, because they risk becoming huge write-offs if liquefied natural gas is phased out in coming decades over climate concerns.
The proposal may also ease concerns among the German government’s environmentally minded constituents that the energy crisis has derailed efforts to meet ambitious climate goals.
“By importing liquefied natural gas, we are making ourselves less dependent on imports of Russian pipeline gas,” said Robert Habeck, Germany’s minister for economy and climate change, in a statement. “At the same time, we are accelerating the import of green hydrogen.”
Signing up to import L.N.G. gives Mr. Alverà’s group “a special window,” said Madjid Kübler, managing director of Team Consult, an energy consulting firm in Berlin. “Then you are in the game; then you have access to the administration” to discuss other projects.
Until this year, Mr. Alverà was chief executive of Snam, the Italian gas transmission company. In that role he was responsible for some of Italy’s key energy facilities, including L.N.G. terminals, and was an enthusiastic advocate of substituting hydrogen for natural gas while preserving existing gas pipelines and infrastructure.
Mr. Alverà plans to create a vast, circular industrial ecosystem. His venture would collect carbon dioxide, a greenhouse gas, from emissions-spewing power plants and factories in Germany, pipe it to Wilhelmshaven and ship it to countries where green hydrogen can be produced cheaply. There, the carbon dioxide would be converted into methane and fused with the hydrogen. It would then be chilled to liquid form, much like liquefied natural gas, and exported back to Europe or other energy hungry locations.
Synthetic fuels are already being made this way. About two hours south of Wilhelmshaven in the rural town of Werlte, a company called Kiwi mixes carbon dioxide emitted by agricultural waste with hydrogen, producing enough methane to heat about 800 houses. Hermann Pengg, Kiwi’s founder, said an enormous expansion of this kind of process, as Mr. Alverà contemplates, might eventually make economic sense but would be risky if done too quickly.
Some manufacturers that emit large amounts of carbon dioxide, including cement and fertilizer makers, say they are intrigued. These companies are under pressure to cut emissions or face rising carbon taxes. At the same time, they would prefer to make changes with minimal disruption to their existing processes.
What TES proposes is “one of the very few concepts that is promising for large natural gas consumers to avoid greenhouse gas emissions in the future,” said Matthias Missling, technical business manager at SKW, which makes chemicals for fertilizers from natural gas in Lutherstadt-Wittenberg, southwest of Berlin.
Mr. Alverà said he could start, around 2025, bringing in the first liquefied fuel made at least partly with hydrogen at a cost of €100 per megawatt-hour. That would be about 40 percent less than the current futures prices for natural gas in Europe, but more than gas normally cost before the current crisis.
If customers choose, they could also receive pure hydrogen separated from the imported green gas. Some major industrial users, like ArcelorMittal’s steel plant on Hamburg’s harbor, are planning to shift from natural gas to hydrogen to reduce emissions.
Environmental activists are skeptical that natural gas can ever be green.
“Even the name, Tree Energy Solutions, is sort of green-washing, in my opinion,” said Stefanie Eilers, head of the local chapter of NABU, a German conservation group.
The Wilhelmshaven property where TES would build the gas processing facilities is in a protected area valued for its bird life. The company proposes to address this problem by acquiring new habitat elsewhere in the region — an approach that may not satisfy environmental groups.
“It is never as good to replace a good area with another,” Ms. Eilers said. So far, though, German environmental groups have been reluctant to disrupt the government’s efforts to deal with what is widely considered a national energy emergency.
There are other doubts about Mr. Alverà’s plans. He said he worried about whether enough electrolyzers — devices that separate hydrogen from water — and solar panels would be available to supply his needs.
He is also coy about where the hydrogen and the synthetic methane would be made, although the deal with Fortescue begins to solve this problem. He mentions countries, including Egypt, Oman and the United Arab Emirates, that have abundant sun-baked desert land, but might come with difficult politics that could increase costs and risks.
The key, he said, is not to depend on any one location. “The sun is everywhere,” he said.
Melissa Eddy contributed reporting.
