"If the Federal Council is now considering abolishing the program — or at least withdrawing the federal contribution — it is mainly because of the windfall effects it generates," explains Philippe Thalmann, professor of environmental economics at EPFL.
"Today, 70% of our results come from abroad, while 70% of our investments are made in our historic service territory in Switzerland," says Cédric Christmann, Chief Executive Officer of Primeo Energie.
Switzerland faces the uncertain bet of green hydrogen
In its report published in mid-December 2024, the Confederation attempted to anticipate the future of this energy vector. A difficult exercise, given the glaring lack of a market in Switzerland.
The Federal Office of Energy (OFEN) estimates that hydrogen demand could be between 0.8 and 1.8 TWh in 2030, and reach between 3.6 and 10 TWh in 2050. DR
What is the future of green hydrogen in Switzerland, and more broadly in Europe? This is the great unknown of the moment. This energy source, once seen as a major lever for the transition from fossil fuels to decarbonized alternatives, is today losing momentum.
In a recent report, the firm Ernst & Young (EY) highlights the fragility of the promise that green hydrogen represents in Europe. The numerous controversies surrounding its production methods are considerably slowing projects and calling into question European ambitions for 2030. "Although industrial projects in Europe total an announced capacity of 142 GW, 98% of these projects remain at the feasibility stage. Only 2% have passed the crucial final investment decision step," the report specifies.
Political obstacles are not the only ones compromising hydrogen's future. The sector must also face an increasing electrification of society and transport. This trend calls into question, in the long term, hydrogen's role as a viable option to achieve climate neutrality, the goal pursued by the world's major nations.
In Switzerland, uncertainty is total. The Federal Office of Energy (FOEN) estimates that hydrogen demand could be "between 0.8 and 1.8 TWh in 2030, and reach between 3.6 and 10 TWh in 2050".
This projection remains, however, very uncertain, because industrial players do not yet know which renewable energy vectors they will bet on in the future. In addition, in the mobility sector — notably heavy mobility — the share of fuel cell vehicles remains unknown. "Future hydrogen needs must be reassessed at regular intervals," states a report commissioned by the Confederation and published in mid-December 2024.
The main lessons to draw are :
1️⃣
Climate neutrality : Despite the many unknowns surrounding hydrogen's future, the report presents the resource as a key energy vector to achieve a CO₂-free supply by 2050. Its role is particularly emphasized in industrial sectors requiring high-temperature heat, as well as in certain segments of transport and electricity generation.
Hydrogen could also help strengthen energy supply security. "It can be used to produce electricity to feed the grid with CO₂-neutral power during winter, when the supply situation is tight," state FOEN experts.
2️⃣
Envisioned scenario : Switzerland's hydrogen strategy could be structured around two axes. The first, given forecasts indicating limited demand, relies on domestic production until the mid-2030s. According to the report, "Swiss hydrogen can be produced in existing power plants or at the user who consumes it directly on site or transports it to other sites."
Then, assuming that a market eventually emerges, the second axis of the strategy will take on a more European dimension. From 2035, the country's hydrogen needs would be mostly covered by imports. "For Swiss companies, it is expected that in the long term, importing hydrogen and PtX derivatives by pipeline will prove more advantageous than domestic production," FOEN specialists estimate.
The report thus emphasizes the importance of connecting Switzerland to the future European network. Gas transmission system operators in Europe have grouped together in the "European Hydrogen Backbone" project, aiming to deploy by 2040 a hydrogen transport network covering the entire continent.
3️⃣
Federal support and incentives : Given Switzerland's current hydrogen ambitions, the Federal Council is considering possible support measures. "Requests for support can be submitted by individual companies or by consortia including hydrogen producers. Geographic groupings or clusters of hydrogen producers or PtX derivative producers in the form of consortia are therefore also eligible for this assistance," the report states.
At the European level, given the long-term strategy of importing decarbonized molecules that Switzerland envisages, the Federal Council is already studying the need for possible support. "Connection to the European hydrogen network is in the common interest of Switzerland and neighboring countries. That is why network operators are invited to request, if possible on the basis of a well-advanced project, financial support for cross-border pipelines through the measures already in place in the EU."
4️⃣
Measures under study : While taking stock of measures in progress, the Federal Council's report mentions several avenues to explore to support the Swiss hydrogen industry.
They notably involve: - Regular monitoring with economic associations and energy suppliers to assess the evolution of demand. "The objective is to regularly record future needs for hydrogen and PtX derivatives for the years 2030, 2040 and 2050 with industry, commerce, the mobility sector, energy suppliers and operators of energy production installations," write the Confederation's experts.
- To get out of the Swiss bubble by joining as quickly as possible the initiatives launched in the "Horizon Europe" programme.
- A strengthened involvement of the cantons. Federal recommendations include, among other things, the development of a hydrogen strategy, a reassessment of their master plans and authorization practices, harmonization of the legal framework, as well as support for training and upskilling in the sector.
- To review regulation both technical (on network safety) and market-related (provisions concerning market access and network financing).
- To consider the question of storage. "Operators of infrastructure intended for the establishment of mandatory reserves must examine whether existing infrastructure for fossil fuels and fuels, or infrastructure that is becoming available, can be used to an appropriate extent for storing synthetic liquid energy carriers," indicates the report.
Although relatively detailed, the research work carried out by the Confederation remains problematic on one essential point: it provides few concrete answers regarding hydrogen's future. While it has the merit of asking the right questions, it highlights the magnitude of the work remaining to determine whether hydrogen has a real future in Switzerland.
Naturally, everything will depend on the evolution of demand and future market opportunities. A topic to watch closely.
This article has been automatically translated using AI. If you notice any errors, please don't hesitate to contact us.
"If the Federal Council is now considering abolishing the program — or at least withdrawing the federal contribution — it is mainly because of the windfall effects it generates," explains Philippe Thalmann, professor of environmental economics at EPFL.
"Today, 70% of our results come from abroad, while 70% of our investments are made in our historic service territory in Switzerland," says Cédric Christmann, Chief Executive Officer of Primeo Energie.
