The group said the focus on “Made in Europe” criteria for hydrogen technologies, including electrolysers, was welcome but that the scope had been reduced compared with earlier drafts.

This includes electrolysers of “Union origin”, which the Commission defines as covering the EU and European Free Trade Association countries — Iceland, Liechtenstein, Norway and Switzerland.

Hydrogen Europe argues this would exclude countries like Canada, Japan, the UK, the US, and South Korea.

The Commission said the measure would support domestic manufacturing in the face of growing competition from China.

However, Hydrogen Europe’s primary criticism focused on the Commission’s lead market proposals, which only mentioned a 25% quota for low-carbon steel in public procurement – a level the group said should be raised.

“Strategic sectors such as hydrogen, its derivatives, fertilisers and e-fuels receive limited direct benefits, mostly confined to permitting,” Hydrogen Europe said. “Stronger demand-side measures are needed to create a true lead market.”

It also said the IAA is likely to generate a large volume of secondary legislation which could add to “complexity and uncertainty.”

Additionally, it said delayed plans for low-carbon product labelling were insufficient to underpin lead markets.

“We call on co-legislators to strengthen the Act and close the gaps on ambition, scope, and clarity,” said Hydrogen Europe CEO Jorgo Chatzimarkakis. “Europe must ensure that its industry can grow, compete, and lead globally in strategic clean technologies like hydrogen.”

The Commission positioned the IAA as a response to the bloc losing manufacturing capacity to China, which already dominates sectors like solar panels and is quickly scaling electrolyser production.

The proposal will now be negotiated by the European Parliament and member states in the Council before a final version can be adopted.