Assessing the International Position of EU’s Research,
Technological Development & Demonstration (RTD&D) on
Hydrogen & Fuel Cells
Technical Report EUR 21685 EN
EXECUTIVE SUMMARY
This SWOT analyses the EU’s current competitive positioning in the evolving hydrogen
economy and specifically assesses hydrogen and fuel cell technology development. The study
has investigated how national capabilities have developed and are continuing to develop and
the public and private sectors have adopted strategies to exploit the predicted commercial
opportunities. It has drawn on results reported elsewhere in this report, which have provided
an overview of past, current and planned future H2/FC RTD&D in the EU and other countries
across the world.
Overall, the review of activity has shown that the EU does hold a strong position in many
technology areas. It has well developed H2/FC RTD&D activities and is supporting this with a
substantial funding programme over coming years. Such activity is also being reflected at
Member State level, though this is not uniform across the EU. Industrially, the EU has a
significant number of companies that are contributing to all aspects of technology
development and commercialisation. The knowledge and expertise base that is being
developed has the potential of being exploited across the world. However, the EU does face
strong and growing competition.
The EU’s main competitors are the USA, Japan and to a lesser extent Canada. Each of these
countries has established H2/FC RTD&D support frameworks and developed long term
technology roadmaps describing technical milestones over the coming decades. However,
other countries assessed (Australia, China, India and South Korea) are significantly less well
developed and are just beginning to develop H2/FC RTD&D activities and programmes.
Our overview SWOT analysis is based on an assessment that has been carried out on a
number of levels:
•
•
•
•
Public awareness/demand management – Policy makers response to drivers and barriers
Basic research – Publicly funded H2/FC RTD&D (including bibliographic assessment)
System integration/demonstration activities
Manufacturers, markets and applications – Industry H2/FC RTD&D activity (including
patent analysis).
The results of these assessments demonstrate that the results of the SWOT does not deliver
“black and white” conclusions, rather it provides a flavour of the current situation and
identifies issues that need to be expanded separately.
Public Awareness/Demand Management
High level governmental backing of programmes and activities although crucial is not
sufficient to ensure the effective take up of H2/FC technologies. Visions and roadmaps need
to be supported by concrete actions. The findings of this study have highlighted gaps between
strategic development of H2/FC RTD&D at national level and its translation into commercial
opportunities. This is mainly true for the developing nations and those that have not
traditionally had significant levels of R&D support for new and renewable energy
technologies.
There are a number of ways in which hydrogen economy policies are supported at different
levels but their importance is to generate coherence and increase confidence in the coordination of approaches. North America and the EU as a whole perform well across all
aspects. Nationally within the EU the situation is slightly different. No Member State has
established a detailed technology roadmap for either hydrogen, fuel cells or both, though
many have set up R&D programmes for both areas. A number of roadmap activities are now
under way in France, Italy, Norway, Germany and the Netherlands. There is little evidence of
any assessment of skills gaps that may exist at the national level nor programmes that may be
established to address them. For the other countries, the situation is less well defined since
they are only now creating the visions to support longer term planning.
The creation of bodies representing both industry and government are acting as important
focal points for national and regional activity. Despite comparable approaches in other
countries, Canada stands out with the clearest approach for the development of fuel cells. It
has identified national strengths and limitations (capability gaps, skills needs, etc.) and
created the strategies needed to manage both effectively. Canada has accepted that it is not
capable of contributing to the development of technologies across the whole supply chain and
is eager to support the development of international links for its industry. The creation of Fuel
Cells Canada underlines this approach.
Fuel Cells Canada was perhaps the first to act as both co-ordinator and international promoter
of domestic industries.
In addition, Canada also led the field in realising the strength of clustering companies and
providing the finance to support this. There are a number of clusters spread across Canada,
but predominantly in the west around Vancouver and Ballard. These have acted as catalysts
for commercial collaboration both within Canada and internationally. On the other hand, other
bodies such as the US Fuel Cell Council and World Fuel Cell Council have had stronger
advocating roles.
In Europe, apart from national hydrogen associations that have been established for a number
of years, there are now an increasing number of organisations focussed solely on fuel cells.
These include Fuel Cells UK, Appice (Spain) and PACo (France), who have varied roles
including national co-ordination of industry efforts, public funding and international
promotion.
A summary comparison of “political” strengths and weaknesses across all countries examined
is shown on the following page. This is complemented by a summary comparison of the
strengths and weakness of other drivers and factors – environment, energy sector, socioeconomic, etc. across all companies examined.
An overall summary of findings is produced separately as a stand-alone document to provide
quick insight in, and relying fully on, the wealth of information collected, analysed and
presented thoroughly in the present report.
Political Strengths and Weaknesses.
Region
Variable
Political Champion
Policy Co-ordination
Drivers
Roadmap
Government
RTD&D Funding
Public Procurement
Installed Capacity
Strategic Actions
Industry Association
Support
EU
USA
Canada
Japan
Australia
China
India
South Korea
President Prodi
Being developed.
Limited at national
level – except
regionally in
Germany
Well defined
Being developed.
Limited at national
level.
Substantial under
FP6.
National limited
except regionally in
Germany.
Some incentives at
national level
President Bush
None named
None named
None named
None named
None named
None named
Cross Departmental
Cross Departmental
Cross Departmental
Under examination
Under examination
Under examination
Under examination
Well defined
Documented for
hydrogen and fuel
cells
Well defined
Documented for
hydrogen and fuel
cells
Well defined
Identified
Identified
Identified
Early stages of
development
None to date
None to date
None to date
Rolling 5-year
programme in place
Some established
programmes. Stated
commitment to
increased spending.
Well defined
Documented for
hydrogen and fuel
cells
Series of
programmes but no
long term
programmes
identified
Some established
programmes. Stated
commitment to
increased spending.
Programmes date
back to 1950s,
though currently
fragmented
FC-Programmes
date back to 1980s,
though currently
fragmented.
FC-Programmes
date back to 1980s,
though currently
fragmented.
Active
No specific activity
No specific activity
No specific activity
Identified
(Transport)
Identified
(Transport)
No specific activity
40MW
Limited – Canadian
technology mainly
exported
Not identified
Limited
Limited
Limited
Limited
IPHE Member
Cluster development
IPHE Member
IPHE Member
Detailed review of
current position.
IPHE Member
Moves towards
developing detailed
strategy.
IPHE Member
Moves towards
developing detailed
strategy.
IPHE Member
Moves towards
developing detailed
strategy.
IPHE Member
Both for hydrogen
and fuel cells
Both for hydrogen
and fuel cells
Both for hydrogen
and fuel cells
Hydrogen
None identified
Hydrogen
None identified
13MW
Development of EUwide harmonised
roadmap (supported
by HyNet and
HyWays)
IPHE Member - Not
all Member States
Some national level
both for hydrogen
and fuel cells
Other Areas Strengths and Weaknesses.
Region
Variable
EU
USA
Canada
Japan
Australia
China
India
South Korea
Environment
Strong drive for
clean technologies
Strong drive for
clean technologies.
Commercial focus
Strong drive for
clean technologies
Strong drive for
clean technologies
Identified need for
clean technologies
Identified local and
national need for
clean technologies
Identified local and
national need for
clean technologies
Identified local and
national need for
clean technologies
Energy
Well established
energy infrastructure
Well established
energy infrastructure
Non-grid connected
areas offer demand
Well established
energy infrastructure
Non-grid connected
areas offer demand
Large renewable
energy resources
Lack of natural
resources
Lack of natural
resources
Need to satisfy
growing industrial
activity.
(Social) Demand for
distributed energy
Need to satisfy
growing industrial
activity.
(Social) Demand for
distributed energy
Need to satisfy
growing industrial
activity.
(Social) Demand for
distributed energy
Social
Large skills base –
no understanding of
skills gaps
High quality science/
engineering base.
Large skills base
High quality science/
engineering base
Small skills base
High quality science/
engineering base
Large skills base
High quality science/
engineering base
Small skills base
Lack of trained staff
Plans to increase
education
Lack of trained staff
Lack of promotional
activity
Large educated
population.
Lack of promotional
activity
Large educated
population – focus
on training
Lack of trained staff
Economic
Financial
Strong industrial
competitiveness
Strong industrial
competitiveness
Access to venture
capital
Access to venture
capital
Increasing exports
and employment
Strong industrial
competitiveness
Recent economic
performance
No factors identified
Low manpower
costs
Low manpower
costs
Commercial
Industrial
Industry base –
broad & deep
across supply chain
Industry clustering (Germany)
Industry base –
broad & deep
across supply chain
Increasing sales
Globally recognised
as leaders in certain
technology areas
Industry clustering
Strengthsautomotive and
electronics
Limited industrial
activity, particularly
fuel cells
Growing industry
base
Low advanced
manufacturing
Weak
industrialisation
Growing advanced
industry base
Low advanced
manufacturing
Weak
industrialisation
Low manpower
costs
Lack of supporting
fiscal measures
Growing advanced
industry base
Strengthsautomotive and
electronics
Fragmented H2/FC
activities
Incumbent State run
power industry
Basic research
It is generally accepted that the USA supports the largest R&D programmes, but figures are not
readily available for the purposes of this study to accurately assess the differences between
countries. Consequently, the comparisons made in this study are at a high level and provide only
a broad understanding of the current and future competitive positioning of EU H2/FC RTD&D. A
summary of the public R&D funding for H2/FC technologies and the number of organisations
and people employed in the industry is presented below:
no.
organisations1
USA
Canada
no.
employees1
3,800
US$1.7bn (€1.4bn)
2,400 + 300
CA$1.1bn (€700m)
¥31bn + ¥100bn
(€1.0bn)
Japan
China
Public R&D funding for
next 5 years2
60
350
India
€100m
Bush initiative
METI + NEDO
MOST-programmes
€20m
South Korea
EU
Won 300bn (€220m)
Nat FC Tech Plan
€240m
FP6 + Quick Start
Federal + States
Germany
350
2,800
€70m + €400m
UK
100
850
€120m
Italy
70
850
€90m
Denmark
20
210
€40m
Emphasises SOFC
Finland
20
100
€20m
Distributed energy
Norway
30
150
€30m
Sweden
30
100
€35m
Switzerland
55
400
€40m
(1) Source: Fuel Cells Today, Fuel Cells Canada, Business Communications
(2) Note: R&D budgets are extrapolated in many cases from current H2/FC spending and are necessarily inaccurate
The US H2/FC R&D activities are spread from fundamental research through to system
development and demonstration. Support is available for the uptake of new technologies once
they are developed, which is primarily focused at demonstrations, especially of vehicles. Support
is also provided for educational programmes for raising public awareness and spreading
commercial best practice. Each programme has well defined parameters aimed at different
aspects of the technology development value chain.
Many of the programmes identified in this study do propose elements that drive the uptake of
new technology. Only in the USA does this appear to have been to be taken to the level that there
are substantial funds available from the public purse to support public procurement and
exploitation that is not simply a demonstration project.
The EU as a whole holds a relatively strong position with respect to other countries and is by no
means weak as compared to the USA. The recent announcement of substantial funding to support
H2/FC RTD&D (€2.8bn over 10 years) has firmly established the EU as a leader of
developments. When combined with Member State level activity, which focuses on national
competencies, this position is enhanced. However, caution must be taken in understanding
precisely where much of the intellectual property lies that forms the basis of this European
activity.
Basic research in hydrogen production seems to concentrate currently on steam reformation.
Electrolysis used to be as active a research area but is now declining. The USA is well presented
in all major hydrogen production technologies: steam reforming, electrolysis and gasification. In
photocatalytic, biochemical and thermochemical hydrogen production, Europe is very much
behind Japan. Japanese are increasing their contribution to these technologies also.
The number of publications devoting to various technologies to store hydrogen has increased
rapidly during the last few years. Metal hydrides seems to be the hottest research area. China is
clearly the most prolific publisher in the world. Both Korean and Indian organizations have
published more in the field than organizations from any European nation. In hydrogen storage
technologies, Europeans can reach number two position only in the liquid hydrogen storage and
alanates publications. However, in recent years both Japan and South East Asian nations have
increased their publishing effort in the liquid hydrogen storage much more that the European
ones have. If this trend continues, Europe will lose its number two position in just a few years.
In conversion, PEMFC is the most important technology worldwide; the share of patents for
PEMFC has increased significantly especially in recent years. Japan focuses heavily on this
technology, whereas the USA and the EU-15 have a broader research approach. Europe is the
leading publisher of the SOFC related research, the most active nations being England, Denmark
and Germany. In direct methanol related fuel cell research, Europe is the leading publisher
together with the USA.
System Integration/Demonstration Activities
Demonstration programmes are a useful practical indicator of how technology development is
progressing towards commercialisation. This is not necessarily related to the country in which the
demonstration takes place and therefore it is not necessarily a measure of competitiveness. For
example, Canadian technologies are being demonstrated almost everywhere but in Canada. The
lack of demonstrators in Canada only exemplifies a policy choice targeting the promotion of
components and systems developments, not a lack of Canadian competitiveness in this area.
Outside the major players of North America, Japan and the EU, there is little industrial activity.
However, it is important to understand this in context, since the H2/FC industry as whole is not
large. The possibility of strategic support in any of the “minor countries” such as China, South
Korea or India could have a significant impact.
North America has almost the same number of installed units as its main competitors combined.
Japan and the EU have similar numbers of installations, but if this is considered in terms of
geographical size or population, then Japan has a significant lead.
In terms of installed stationary capacity, the USA leads efforts though this is predominantly using
PAFC and PEM. The situation regarding MCFC, SOFC and AFC is more even when compared
to the EU. Japan does have a number of installations, but not to the US levels, and Canada has
highlighted that this is an area where it has not provided sufficient support in the past.
In the USA, a minor but significant budgetary change is the increased emphasis on safety codes
and standards, which are an important requirement for future commercialisation. A tripling of the
budget reflects the longer term aspirations of the US Government in ensuring that the potential
barriers to market penetration are addressed at an early stage.
Manufacturers, Markets and Applications
Electrolysis and steam reforming are currently the most common production methods and
pressurised hydrogen the most common storage technology. However, this does not accurately
assess areas that are being researched, but represents how the companies are using their
technology in collaboration with the fuel cell industry.
There are a significant number of international commercial partnerships across technology and
application development areas. How these relationships affect a true assessment of industrial
activity across the EU is difficult to determine and should be examined in more detail. Although
these partnerships provide the opportunity to make commercial progress, they do have the
potential to restrict the development of “made in EU” technologies. There are short term benefits
that these partnerships offer, but in the long term there is a risk that the EU could provide “low
value” expertise that could easily be transferred to third countries such as China and South Korea.
There is a need to assess H2/FC RTD support in terms of a company’s overall RTD support. This
is straightforward for small companies, whose sole activity is the development of H2/FC
technologies. However, for larger companies the significance of this activity may be much
smaller in respect to its other activities. An understanding of this would support a more
transparent assessment of the priority that H2/FC RTD&D is taking.
In Europe there is just one independent, publicly quoted fuel cell developer, whereas around 12
companies in North America have a market capitalisation in excess of US$3bn (€2.5bn).
Moreover, in Europe FP6 programmes are dominated by large corporations and provide max
50% funding, while in the USA 80% for R&D is not unusual. The mobilisation of this level of
support provides strong backing to future R&D plans.
Traditionally, Japanese engineering and technology industries have had very close relationships
with Government funding programmes. The same is true for hydrogen and fuel cells. Japan’s
established industries are leading the way in development of new technologies and concepts,
particularly the automotive manufacturers and electronics companies. For example, the big push
in hybrid engine technology – believed to be the major stepping stone towards FC and H2 in
transport – came from Japanese manufacturers Toyota and Honda.
A summary comparison of “technological” strengths and weaknesses across all countries
examined is shown on the following page:
Technological Strengths and Weaknesses.
Region
Variable
EU
USA
Canada
Japan
Australia
China
India
South Korea
Codes and
Standards
National level
collaboration – not
all Member States
Strong lead
Strong lead
Strong lead
No substantial
activity
No strategy
No strategy
No strategy
Hydrogen
Production General
Storage – Limited
to traditional
Distribution
(fuelling stations)
Production (Steam
reforming)
Storage - General
Storage – Limited
to traditional
Distribution
(fuelling stations)
Production
(hydrolysis)
Storage – Limited
to traditional
Distribution
Production Limited
Storage - Limited
Distribution
Production –
Limited
Storage – Metal
hydrides, Nanomaterials
Storage - Limited
Distribution
Production Limited
Storage - Limited
Distribution
Production Limited
Storage - Limited
Distribution
Fuel Cells
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
Transport and
remote power
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
All
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
Transport and
remote power
Developed
Application areas
of interest
International
Collaboration
RTD&D Structure
Research Base
Developed
Generally more
fragmented at
national level
(except regionally
in Germany)
Large and
accessible
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
Production (Steam
reforming, Photocatalytic, Bio- and
Thermochemical)
Storage – Limited
to traditional
Distribution
(fuelling stations)
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
MCFC, SOFC,
AFC, PEM, PAFC,
DMFC
All
All
All
All
Developed
Strongly
Developed
Developed
Limited
None
Limited
Limited
Well developed –
blue sky through to
demonstrators
Developed
Poor level of
demonstrators
Well developed –
blue sky through to
demonstrators
Uncoordinated
Uncoordinated
Uncoordinated
Uncoordinated
Large and
accessible
Limited
Large and
accessible
Limited
Large and
accessible
Large and
accessible
Large and
accessible
All
Public Private
Collaboration
Advanced
Advanced
Advanced
Advanced
Limited
Limited
Limited
Limited
General RTD&D
Focus
H2/FC Minor
compared to other
energy
technologies
H2/FC Minor
compared to other
energy
technologies
H2/FC Minor
compared to other
energy
technologies
H2/FC Minor
compared to other
energy
technologies
H2/FC nascent
H2/FC nascent
Other R&D
Priorities
H2/FC nascent
H2/FC nascent
The majority of H2/FC activity across the EU is focussed in Germany and to a lesser extent in
the UK. Germany’s strength is characterised by high concentration of fuel cell and hydrogen
technology developers and demonstration projects and by the highest number of H2/FC
patents produced. Germany exemplifies the strengths required to build a competitive industry
and mimics many of the strengths that are being exhibited by the EU’s main competitors.
This SWOT analysis has enabled a clearer picture to emerge of how the EU’s H2/FC RTD&D
current activities compare. The EU’s internal capability and organisation in terms of strengths
and weaknesses on H2/FC RTD&D are summarised as follows:
EU’s strengths and weaknesses on H2/FC RTD&D
INTERNAL
Political
Regulatory
Legal
Environmental
Strengths
• High level ministerial support
• Developing cross department policies
• Well defined drivers
• Development of an EU wide harmonised
roadmap (supported by the EU project HyNet
and HyWays) fostering and encouraging
individual national roadmaps
• Substantial R&D budgets
• National R&D programmes (particularly in
Germany at both national and regional levels).
• Some incentives to support technology
adoption at national level
• Demonstration programmes
•
•
•
•
•
•
•
Socio-Economic
•
•
•
•
Technological
Commercial
Industrial
(Financial)
•
•
•
•
•
•
•
•
•
Establishing international codes and
standards
National bodies are collaborating
Kyoto targets (EU and national level)
Clean air targets (EU and national level)
Recognition of longer term requirements for
new and renewable energy resources
Access to large skill base
High quality scientific and engineering base
suitable for future commercial needs
Industrial competitiveness (historic)
Competitiveness as an issue regarding
H2/FC technologies
High transport fuel costs
SOFC, PEM, MCFC (partly using US codeveloped technology)
Hydrogen technologies generally
National R&D institutions – publishing peer
reviewed reports
Patents (mainly Germany)
Good grasp of CHP potentials
Well developed system integration know
how
Industry base covers all technologies
Public private partnerships
Components industry (materials, volume
manufacturing)
Industry clusters (predominantly in German)
Weaknesses
• Currently no incentives for public
procurement
• Lack of understanding of current strengths
and weaknesses
• Uneven spread of expertise and activity
across EU
• EU FPs previously too inflexible/slow to
respond to changing R&D needs
• National priorities vary (although wider
research approaches may help identify the
best technologies)
• Lack of pan-EU co-ordination of effort
• H2/FC lags other energy R&D funding
• Lack of national roadmaps
• Issue of pan-EU co-ordination
•
Differing priorities across EU-MS
•
Education/raising awareness minimal across
whole EU (large variances)
• Addressing needs of Accession Countries
• Issue of pan-EU incentives vs national
frameworks
•
•
•
•
•
•
Demonstration projects that exploit EU
developed technologies
AFC, PAFC
No evidence of capability from Accession
Countries
Reducing costs of technology
90% of EU patents from Germany
Knowledge of industry shape unknown
(what is influence of non-EU companies)
• Making technologies competitive
• Access to venture capital funding to support
industry
The external (non-EU) factors in terms of opportunities and threats on H2/FC RTD&D are
summarised as follows:
EU’s opportunities and threats on H2/FC RTD&D
EXTERNAL
Political
Regulatory
Legal
Environmental
Socio-economic
Opportunities
• Support for the creation of markets
• International trade and R&D collaborative
agreements
• Development of international regulations,
codes and standards
• Drive international agenda towards adoption
of clean technologies
• Filling knowledge gaps (complementing
existing capability)
Threats
• US taking lead on global developments (e.g.
IPHE)
•
International partnering to develop
technologies
Introduction of technology demonstrators
Inwards/outward technology and knowledge
transfer
Fuelling networks
Sustainable transport (two, four-wheels)
Domestic/district combined heat and power
Remote, auxiliary, emergency power
applications
Sustainable hydrogen production (all routes)
Hydrogen storage (all technologies)
System integration (balance of plant
technologies, etc)
Hybrid systems
Widely existing natural gas pipeline grid
•
•
•
•
•
•
•
•
•
•
Cost competitive application of technologies
for niche markets
Patenting
Licensing technology
All technology areas
Mergers and acquisitions
•
•
•
Technological
•
•
•
•
•
•
•
•
•
•
Commercial
Industrial
(Financial)
•
•
•
•
•
Federal/Member State policies not yet
harmonised
•
•
•
Low cost workforce: manufacturing, R&D
Off-shoring by EU companies
Complexity of forming a cross-border
consensus
Other renewable technologies adopted
Competitors establish strong partnerships
Innovation lags competitors
PEM (Canada, US, Japan)
PAFC (US, Japan)
SOFC (Japan, US)
MCFC (US, Japan)
H2 production (Japan, US)
H2 storage (US, Japan, other Asia)
All technologies - longer-term (China, South
Korea, etc.)
Transport applications (US, Japan, Canada)
Small stationary (US, Canada, Japan)
Large Stationary (US, Japan)
Portable application (Japan, US
All applications – longer term (South Korea,
China, etc.)
Domestic infrastructure creates niche
opportunities not accessible to overseas
companies
Competitors establish lead industries
Support from financial markets concentrated
on competitors
Failure to meet market needs
Commercial scale manufacturing
Mergers and acquisitions
Emergence of “new players” – China, India,
South Korea
•
•
•
•
•
•
•
•
•
•
•