On Wednesday (May 31) European Commissioner for Energy, Kadri Simon, and Germany’s Federal Minister for Economic Affairs, Robert Habeck, agreed to link the initiatives to support EU hydrogen projects.
Under the plans, the European Hydrogen Bank and H2Global will jointly develop a European auction targeting international hydrogen imports, to support the European Commission’s non-binding target of important 10 million tonnes of renewable hydrogen by 2030 under its REPowerEU plan.
Plans for the European Hydrogen Bank were originally unveiled in September (2022), initially earmarking €3bn to help develop the emerging hydrogen market.
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As part of the Bank, the Commission earlier this year (2023) announced it was launching its first series of competitive bids this autumn, amounting to €800m to offer a “fixed premium” per kg of green hydrogen, subsidising domestic production.
Established in 2021, the H2Global Foundation was launched by the German Federal Ministry of Economics and Technology (BMWK) to support hydrogen projects by purchasing green hydrogen and its derivates with long-term contacts and resold in Germany via annual auctions.
Neither party revealed how the intended auctions will be funded. H2 View has reached out to the Commission and BMWK for clarification.
Minister Habeck said, “Germany is set to invest more than €5bn towards international hydrogen in the forthcoming years. The first auctions are already taking place. This encouraging model is open to international partners. I therefore strongly welcome the idea of joining forces and making H2Global an integral part of the European Hydrogen Bank.”
Commissioner Simon added, “I am glad to see that Germany is the first mover in setting up an international auction. We are ready to build on this experience and develop the first European action with the European Hydrogen Bank, open to all countries.”
Supporting the plans, Jorgo Chatzimarkakis, CEO of Hydrogen Europe, said, “We definitely need this step forward in order to remain credible with the implementation of the EU Hydrogen Strategy.
“We will need more renewable hydrogen than we can produce inside the EU in the required timeframe, particularly for the hardest to abate sectors. And we also need it at a competitive price.”
Daniel Fraile, Chief Policy Officer at Hydrogen Europe, continued, “We need speed, determination and a strong EU policy to kickstart the European hydrogen industry. Otherwise, we will fall behind and the competitive and abundant renewable hydrogen will flow into other industrial regions. Let’s hope that the new body can start its operation quickly and set the first auction in the next months.”
Analysis by Aurora Energy Research earlier this year found that renewable hydrogen important to the EU could compete with domestic production in 2030.
Based on German modelling, the analysis suggested that hydrogen imports from Australia, Chile and Morocco would be cost competitive with domestic renewable hydrogen production by the end of the decade.
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Hydrogen Europe CEO Jorgo Chatzimarkakis has told H2 View Europe’s hydrogen policy resembles a “chaotic toolbox,” but believes recent developments have set the continent on course to establish a thriving hydrogen market.
Europe has unquestionably been a leader of hydrogen development and policy, with a strong focus on the energy carrier since 2020. However, May 2022 saw the European Commission take a bigger step, when it unveiled its landmark REPowerEU plan against the backdrop of Russia’s invasion of Ukraine.
The plan outlined the EU’s path to energy independence from Russian fossil fuels by 2027, setting aspirational targets to produce 10 million tonnes of renewable hydrogen domestically by 2030, and importing the same amount by the same date.
In an exclusive interview with H2 View, Jorgo Chatzimarkakis, CEO of Hydrogen Europe described the plan as a “leapfrog,” adding, “Europe already had a focus on hydrogen as of 2020, but Russia’s invasion caused an absolute global rethinking of energy policy.”
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