ENTERPRISE MINISTER SIMON Coveney has backed the development of capacity for green hydrogen production, following a report that estimates the sector could add €2.1 billion to the Irish economy.

A new report by Hydrogen Mobility Ireland (HMI) has detailed the potential benefits of creating hydrogen-based e-fuels for the aviation sector, including creating over 10,000 jobs by 2050.

Coveney said that development of the sector would have “clear and obvious benefits for Ireland”.

“Developing green hydrogen production at scale has clear and obvious benefits for Ireland – from creating a network of highly-skilled jobs, to decarbonising key sectors of our economy and society and building a resilient energy system,” Coveney said.

“Ireland is uniquely positioned to export as both a net producer of green hydrogen, and as a producer of renewable fuels derived from hydrogen.”

He added that it was “imperative” to reach Ireland’s potential for green hydrogen production.

It is understood that Ireland’s strategy on hydrogen will be published in June.

While Coveney has backed the sector, the report identifies some key roadblocks in developing green hydrogen production, particularly on adequate electricity supplies.

A major report by electricity grid operator EirGrid detailed concerns about electricity generation shortfalls, due to the withdrawal of previously procured generation capacity.

HMI says that to produce e-fuels domestically, Ireland needs to deliver “significant” renewable electricity generation to allow for ‘electrolysis’. The process of electrolysis creates hydrogen from water.

According to the report, Ireland will require 110 megawatts of renewable electricity  generation by 2030 to power to develop an e-fuels sector. Currently, the Government are targeting 13 gigawatts of renewable electricity generation by 2030.

The report also calls for “de-risking” of the technology required for e-fuel generation.

“E-fuels are currently at a low level of maturity which means that investments in e-fuels facilities can represent a significant financial risk to investors,” reads the report.

It adds that any development of the sector would require public funding “in the short term”.

Under current plans, the EU is targeting to increase the use of aviation e-fuel to 35% by 2o50, while maritime e-fuels must comprise 2% of the bloc’s shipping fuel by 2034.

“Ireland must now signal its own intent in this regard through concrete actions; leveraging the country’s significant wind energy capacity to facilitate the production of e-fuels, allocating sufficient funding to planned and future e-fuels projects and committing to a defined strategy to meet EU e-fuels targets,” said Jonathan Hogan, business manager at Hydrogen Mobility Ireland.

“Doing so, will enable the growth of a domestic hydrogen and an e-fuels ecosystem which collectively, can create thousands of jobs, decarbonise transport and other industries, and open up access to a thriving global marketplace.”