In a letter to the EC President and Executive Vice-President, a group of European electrolyser manufacturers have made a call for more support to develop a “sustainable European value chain for renewable hydrogen” adapted to the needs and expectations of the current global competitive and geopolitical landscape.
Made up of Advent, AEG, AGFA, Ariema, EFACEC, Genvia, Green Hydrogen Systems, H2 Energy, Hydrogenica Corporation, H2B2, Hystar, Kiwa, McPhy, Nel, RINA, SES Hydrogen, Stargate Hydrogen, Sunfire, Topsoe, thyssenkrupp nucera, and Umicore, the European Clean Hydrogen Alliance Electrolyser partnership have said European money is finding its way into the hands of “non-European-based competitors”, adding that the first electrolyser project with Chinese-made stacks has been installed on the continent.
Calling for a need to ensure that future funding mechanisms such as the EU Sovereignty Fund and/or the Hydrogen Bank support the development of electrolyser manufacturing in Europe, the group said, “EU taxpayer’s money ought to be reinvested in Europe for the benefit of Europeans.”
It comes after the EC proposed a Hydrogen Accelerator, aimed at producing 10 million tonnes of renewable hydrogen per year, under its REPowerEU plan, which the partnership has said would require an installed electrolyser capacity of 90-100GW.
Read more: Hydrogen in Europe: ‘Now is the time to remove all obstacles’
Read more: REPowerEU: €34-49bn needed for hydrogen infrastructure
The letter cites the US Inflation Reduction Act which it says, “heralds a paradigm shift in global trade and hydrogen production.” The group added, “The stipulation on ‘buy American’ in the IRA, coupled with China’s known policies to promote state entities, squeezes European manufacturers from both ends.”
Read more: Win for hydrogen in the US – Inflation Reduction Act to become law
A recent Bloomberg study highlighted that based on current policies and trends, China would be the market dominant player for electrolyser manufacturing by 2025.
The group has said that EU funding mechanisms should:
Be designed according to the state of the market, implying at the current stage a fixed premium model per kg of green H2 with no auctions for an initial period to ensure the development of the sector and a level playing field;
Support the development of a renewable hydrogen value chain “made in Europe”;
Support the creation of European jobs in clean tech manufacturing and a just transition;
Support European research and development, thus promoting European centres of excellence.
Additionally, it has called on the European Commission to consider requirements specifically supporting ESG and European standards when developing future funding tools and pre-qualification criteria such as:
Projects should show significant contribution to European values and sustainability in form of specific ESG requirements;
Projects should show significant contribution to job creation and centres of excellence; similar to requirements outlined in IPCEI;
Projects should include certain sustainability requirements such as recycling obligations and CO2 footprint of electrolyser manufacturing facilities.
The group said, “Now more than ever, we need to maintain European technological leadership in electrolysers to ensure energy security and industrial competitiveness. We must learn from previous lessons such as the case of the solar industry.”
Under the REPowerEU plan, the EC also set the target to import 10 million tonnes of renewable hydrogen per year by 2030. A recent report by Aurora Energy Research concluded that importing renewable hydrogen from Australia, Chile, and Morocco couple compete with European domestic production by 2030.
Additionally, the Hydrogen Council’s Global Hydrogen Flows Report found that Europe is likely to consume more hydrogen than it produces by 2030, seeing extensive trade links established by 2050.
Read more: Regional hydrogen supply and demand mismatch will force global trade links by 2050, report predicts
However, earlier this month (January 17), EC President, Ursula von der Leyen, announced that the EC would draft a Net Zero Industry Act to identify clear goals for European Clean tech by 2030 in a bid to focus investment on strategic projects along the entire supply chain.
Read more: Europe to draft Net Zero Industry Act
von der Leyen said the Act would boost investment and financing for clean tech production, commenting, “To keep European industry attractive, there is a need to be competitive with the offers and incentives that are currently available outside the EU.”