EU revises hydrogen subsidies to reduce dependency

The European Union is changing its hydrogen subsidy rules, targeting local supply chains and data security in the face of cheaper Chinese imports.

Partagez:

The European Union is changing its subsidy criteria for hydrogen projects in response to European manufacturers’ concerns about competition from low-cost Chinese imports.
The new rules will aim to strengthen local electrolyser supply chains and protect data security.
The European Commission’s decision comes as the EU prepares to launch its next round of funding for green hydrogen, with specific targets to boost local production.
European companies in the hydrogen sector, particularly electrolyzer manufacturers, have been warning for several months that they cannot compete with Chinese producers in terms of cost.
These electrolyzers, essential for producing hydrogen by splitting water molecules, are increasingly manufactured outside the EU, often at much lower prices in China.
European players in the sector are calling on the EU to include criteria favoring local companies in its subsidy programs.

Reducing dependence on non-European equipment

The EU’s review of subsidy criteria for hydrogen projects could include requirements on the origin of the equipment used.
According to Wopke Hoekstra, European Commissioner for Climate, these criteria could impose a mandatory share of production and assembly within European borders.
The aim is to ensure that EU-funded projects do not rely excessively on imported components or technologies, particularly when these imports come from aggressively-priced countries.
Current discussions suggest that the Commission is also considering limiting projects that rely on non-European suppliers.
One of the main thrusts of this strategy is to minimize the risk of sensitive European data being exposed to entities outside the EU.
The new guidelines are expected to be applied to the next call for projects under the EU Hydrogen Bank in the coming months.

Cybersecurity rules and market impact

Alongside economic issues, cybersecurity is becoming a central concern.
Hoekstra points out that uncontrolled access to strategic information could pose substantial risks to Europe’s technological sovereignty.
Specific criteria could be incorporated to ensure that projects supported by European grants meet rigorous standards of data management and information protection.
In April, the EU had already allocated 720 million euros to hydrogen projects, but internal critics pointed out that some projects used imported equipment, compromising the strategic objectives of developing a robust local industry.
The new rules aim to rectify these shortcomings by favoring project proposals that demonstrate a clear commitment to European industrial capabilities.

Implications for EU Trade Relations

The review of hydrogen subsidies is part of a wider EU policy to ensure fair competition on its internal market, without resorting to market-closing measures.
While the EU is not seeking to cut ties with China, it is aiming to regulate access to European subsidies to avoid commercial practices deemed unfair.
By imposing stricter criteria, the EU is attempting to stimulate demand for European technologies while protecting its strategic industries from outside pressure.
European manufacturers are particularly vigilant with regard to tariffs and subsidies that could indirectly favor non-European players.
Discussions on new subsidy rules reflect Brussels’ desire to ensure that climate and energy policies also support the continent’s industrial competitiveness.

Lhyfe becomes the first French producer to obtain European RFNBO certification, delivering the first batches of certified hydrogen and opening access to new support mechanisms for the industrial sector.
Tree Energy Solutions and CPC Finland will produce 125,000 tonnes annually of e-NG at the Finnish port of Rauma, targeting European and international markets with a significant investment.
The European Commission grants €3.5mn to support preparatory work for a Franco-German cross-border network aimed at transporting hydrogen between the Grand Est region and Baden-Württemberg starting in 2029.
French company McPhy Energy awaits a court decision regarding offers submitted during its judicial reorganization, paving the way for probable liquidation and potential delisting of its shares.
The majority-Indigenous-owned Canadian manufacturer HyVera Distributed Energy is introducing an eCat pellet that instantly produces ultra-pure green hydrogen without external electricity and is counting on two pilot plants to simplify industrial supply.
Underground hydrogen storage, essential to support its growth, continues to face significantly higher costs than natural gas storage, along with major technical challenges hindering its competitiveness against conventional energies.
Singapore-based hydrogen specialist Hydrexia seals a protocol with Indonesian gas giant Samator to deploy purification, transport and storage of hydrogen, betting on rapidly growing local demand and export outlets to the Asia-Pacific region.
Cadiz Inc. signs a memorandum of understanding with British company Hoku Energy for a large-scale energy project including green hydrogen, solar power, and digital infrastructure in the Californian desert, projecting annual revenues of up to $10mn.
BP indefinitely halts its blue hydrogen project at the Whiting refinery in Indiana, raising questions about the future of federal funding and the impact on regional plans for a decarbonized hydrogen sector in the United States.
The Polish energy group ORLEN receives a non-repayable grant of €382 million from the National Recovery Plan to finance its renewable and low-emission hydrogen production initiatives.
Georgia Power and Mitsubishi Power announce successful completion of an unprecedented test incorporating 50% hydrogen into an advanced gas turbine, reducing CO2 emissions by 22% compared to natural gas alone.
Neoenergia has begun construction of one of Brazil's first green hydrogen plants, aimed at supplying heavy and light vehicles, with an investment exceeding 30 million Brazilian reais ($5.99mn).
The SA-H2 fund, supported by international partnerships and local institutional backing, mobilises 37 million USD to develop export-oriented green hydrogen from South Africa, with an initial concrete project announced.
Turbotech reports successful combustion testing of a hydrogen turboprop, developed through digital simulation with Ansys, marking an industrial milestone in light aircraft using alternative fuel.
France Hydrogène responds to the Cour des Comptes report published on June 5, criticising an incomplete reading of updated targets and the economic impacts of decarbonised hydrogen development.
The Belfort Commercial Court has opened a judicial reorganisation procedure for McPhy, while a renewed call for tenders for its asset sale is now set to close on 13 June.
Plug Power CFO Paul Middleton acquired 650,000 shares on the market, affirming his support for the long-term strategy of the hydrogen-focused company.
The Canadian government is funding an initiative to support 40 SMEs in British Columbia’s hydrogen sector, aiming to increase foreign investment and expand international market share.
Developer CWP Global has paused its $40 billion AMAN project in Mauritania due to a lack of buyers for green ammonia despite favourable local conditions.
A study reveals that the profitability of African green hydrogen exports to the European Union depends on political support from Europe, despite the abundance of ongoing projects on the continent.