European Commission urged to reassess hydrogen policy

Hydrogen Europe and 16 other European associations have called on the European Commission to revise the bloc’s hydrogen policy.

Specifically, the group asked for a hydrogen policy “reality check,” urging the Commission to address the following issues:

• adopt a more pragmatic and technology-neutral approach to enable cost-competitive hydrogen production;
• a swift impact assessment of the consequences that the current renewable fuel of non-biological origin (RFNBO) criteria have on production costs, greenhouse gas (GHG) emission savings and the energy system;
• the adoption of a Delegated Regulation on Low Carbon Fuels in a similar pragmatic, technology-neutral and fair way;
• ensure continued financial incentives are provided to lower the cost of hydrogen;
• support long-term planning security by revising the European Hydrogen Strategy;
• speed up, de-risk and smarten infrastructure development – here the associations called for an EU-level action plan for hydrogen grids;
• enable the creation of markets for products produced from and with RFNBOs and low-carbon fuels;
• improve European incentives on the demand side; and
• strengthen the European Union’s (EU’s) role in creating a global market for hydrogen by developing the international leg of the EU Hydrogen Bank.

The Commission has been asked to act on these recommendations through, but not limited to, the upcoming initiatives, such as the Clean Industrial Deal, the Action Plan for Affordable Energy and the Grids Package.

To remind, in late 2024, the European Council adopted conclusions on the special report of the Court of Auditors on the EU’s industrial policy on renewable hydrogen. The report was welcomed, with the Council calling for “swift” implementation of the EU’s regulatory framework, encouraging the development of an interconnected transportation network and calling on the Commission to take measures that support both the competitiveness of EU industry and the security of investment.

It is worth mentioning that, in 2024, the Commission officially opened the second auction under the European Hydrogen Bank, via the Innovation Fund (IF24), to allocate €1.2 billion from EU Emissions Trading System (ETS) revenues to support producers of hydrogen categorized as RFNBO located in the European Economic Area (EEA). The auction was launched in the first week of the Commission’s new mandate and will end on February 20, 2025.

Over €250 million in grants from the Connecting Europe Facility (CEF) will also be allocated to 21 hydrogen infrastructure development studies. As disclosed, this funding will help alleviate investment risks associated with this nascent market and complement the hydrogen policy framework introduced in the Gas and Hydrogen Package. The formal adoption of this award decision will, reportedly, follow in the coming weeks. The European Climate, Infrastructure and Environment Executive Agency (CINEA) will then prepare grant agreements with the beneficiaries.

• Second European Hydrogen Bank auction with €1.2 billion budget is officially open
• EU backs hydrogen infrastructure projects with over €250 million