Cyprus is assessing the potential of renewable hydrogen as an alternative fuel to support the decarbonization of the transport sector. In this context, the Energy Service of the Ministry of Energy, Commerce, and Industry has finalized the country's hydrogen strategy, concluding that "renewable hydrogen is prioritized, based on completed scenarios, for use in vehicles where electrification is not an effective solution, such as buses and trucks."

As Brief reports, the Energy Service has adopted a conservative scenario for hydrogen development in Cyprus by 2030, emphasizing that "as a small and isolated energy system without a strong industrial base, the country is not suited for large-scale hydrogen deployment."

Instead, direct electrification is seen as a more suitable alternative, particularly given the potential of renewable energy sources. According to the strategy, "power supply from renewable energy sources offers advantages for low- and medium-temperature industrial processes, as well as for heating and cooling in the residential and commercial sectors."

Moreover, the analysis highlights that "electrification in road passenger transport is more energy-efficient and cost-effective than hydrogen use." The report acknowledges significant challenges hindering hydrogen sector development in Cyprus, which limit its large-scale adoption.

The study identifies two key barriers to hydrogen expansion in Cyprus:

1. Water Scarcity – Producing green hydrogen through electrolysis requires significant amounts of clean water, which is a limited resource on the island.

2. Lack of Infrastructure – Cyprus does not have a natural gas network, nor does it possess developed pipeline infrastructure or storage facilities that could be repurposed for hydrogen use. "This means that any investment in infrastructure must be built entirely from scratch, increasing costs and prolonging implementation timelines," the report states.

The strategy further notes that "developing new hydrogen transport and storage networks is a particularly expensive and complex process that requires significant investments and long-term planning."

Given these constraints, Cyprus’ hydrogen strategy is initially and in the medium term centered on a conservative approach, focusing on targeted applications. Specifically, hydrogen use is proposed primarily for industry, heavy-duty vehicles, maritime, and aviation transport—sectors where direct electrification is not feasible or efficient.

For residential, commercial, and road passenger transport, electrification and direct utilization of renewable energy sources are deemed more cost-effective and efficient solutions.

By prioritizing a conservative scenario, the Energy Service states that "this approach is the most realistic mid-term strategy for Cyprus, as it better aligns with existing infrastructure and the actual needs of the island’s energy system."

However, the strategy also acknowledges that "by focusing on specialized applications where hydrogen offers unique advantages, the country can gradually and sustainably develop the sector without placing excessive strain on financial and natural resources."

The decision to integrate hydrogen into the transport sector is based on findings from the "Support REPowerEU, Country Report Cyprus" study, which was completed and submitted to the Ministry of Energy, Commerce, and Industry in February 2023. This report serves as the foundation for Cyprus’ National Hydrogen Strategy up to 2030.

Two preliminary hydrogen development scenarios have been outlined for Cyprus, targeting 2030 and 2050: a conservative scenario and an ambitious scenario.

The conservative scenario anticipates minimal hydrogen penetration by 2030, reflecting a cautious adoption of hydrogen technologies across different sectors. This pathway envisions hydrogen integration at a later stage, primarily in areas where electrification is challenging.

Conversely, the ambitious scenario positions hydrogen as a central element in the country’s decarbonization strategy, with accelerated and widespread adoption of hydrogen technologies. This approach relies on substantial investments in infrastructure and rapid technological advancements across the renewable hydrogen supply chain.

Under the ambitious scenario, hydrogen development would expand across multiple sectors, including industries such as cement production, brick and tile manufacturing, road transport for trucks and buses, and the maritime and aviation sectors.

Cost estimates for both the ambitious and conservative scenarios carry significant uncertainty due to the early stage of technology development and unknown technological progress rates.

For the ambitious scenario, total investment costs are projected to reach €2.395 billion by 2030 and €6.75 billion by 2050. These investments include: €161.5 million for hydrogen-powered buses and trucks by 2030, €41.2 million for hydrogen refueling stations by 2030, and €1 million for e-kerosene production by 2030.

In contrast, the conservative scenario projects very limited hydrogen adoption by 2030, leading to significantly lower investment costs. The total investment for this scenario is zero by 2030 and €170 million by 2050.