Launched on Wednesday (February 1), the plan is expected to launch the first series of competitive bids this autumn, offering a “fixed premium” per kg of green hydrogen, subsidising domestic EU production.
The Commission said, “This will have a similar impact as the production tax credit in the US IRA (Inflation Reduction Act),” however added by offering the support via auction, it will make EU support “cost-effective, fast and administratively light.”
H2 View understands the Commission intends to follow up the pilot auction with other bidding rounds or other forms of support for hydrogen production to contribute towards the REPowerEU hydrogen targets of producing 10 million tonnes of renewable hydrogen annually by 2030, which it says will cover the “EU domestic part of the European Bank.
Additionally, the EU is considering offering a similar bidding system to subsidise other renewable energy technologies, which includes electrolyser components.
Earlier this week (January 31), European electrolyser manufacturers called on the European Commission to provide more support to ensure the development of domestic electrolyser manufacturing.
The Commission’s plans come after questions started being raised as to whether the EU was losing its lead in global hydrogen developments, following the passage of the US IRA in August last year (2022), which offers up to $3/kg of tax credits for clean hydrogen production.
Read more: Win for hydrogen in the US – Inflation Reduction Act to become law
Under the proposed Net Zero Industry Act, the Commission intends to implement the plan, using the EU’s regulatory framework to allow quick deployment, simplified and fast-tracked project permitting, and developing standards, aimed at accelerating the bloc’s renewable energy expansion.
“We have a once in a generation opportunity to show the way with speed, ambition, and a sense of purpose to secure the EU’s industrial lead in the fast-growing Net Zero technology sector,” said Ursula von der Leyen, President of the European Commission.
“Europe is determined to lead the clean tech revolution. For our companies and people, it means turning skills into quality jobs and innovation into mass production, thanks to simpler and faster framework,” she added.
Another key pillar of the plan is faster access to funding. To speed up and simplify access to funding, the Commission has said it will consult member states on an amended Temporary State aid Crisis and Transition Framework in light of the Green Deal, which it says could see increased notification thresholds for support for green investments.
Read more: A sense of scale: Day one of Hyvolution
The Commission noted that 35-50% of all jobs could be affected by the green transition and has said it will propose to establish Net Zero Industry Academies to roll out up-skilling and re-skilling programmes in strategic industries.
Furthermore, the EU plans to enhance global cooperation, “making trade work for the green transition under the principles of fair competition and open trade,” saying it will continue to develop its network of Free Trade Agreements as well as other forms of cooperation.
H2 View is on the ground at Hyvolution 2023 in Paris and will update this story with stakeholder reaction.