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EU to propose hydrogen subsidy package to make clean hydrogen more competitive

Anela DoksoBy Anela Dokso16/03/20232 Mins Read
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According to a draft document, the European Commission will explain ideas for a hydrogen subsidy program that would make clean versions of the fuel more competitive with hydrogen derived from fossil fuels.

Almost 8 million tonnes of hydrogen are used in EU industries, but the vast majority of that is generated using gas in a process that releases CO2 that warms the earth. To reduce industry emissions, the EU intends to transition to CO2-free hydrogen generated from renewable electricity.

According to a draft paper, the EU would establish a hydrogen funding “bank” that will use auctions to give hydrogen producers a set premium per kilogram of hydrogen for up to 10 years.

Over 800 million euros would be up for grabs at the first auction of the year. Once the hydrogen is created, the payments will be made. In order to be considered, projects would need to demonstrate that they have a willing buyer and a sustainable energy source to power the production facility.

Governments will also be able to enhance the budget for projects in their own nations by contributing national cash to the EU auctions, ensuring that projects still receive state aid even if they don’t receive EU funding.

By 2030, the EU hopes to import an additional 10 million tonnes of renewable hydrogen and produce 10 million tonnes of its own. According to the draft, less than 0.3 million tonnes of hydrogen are now produced from energy.

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