EU to Revise Hydrogen Subsidy Regulations in Response to Chinese Oversupply
There is concern in the industry that the EU’s hydrogen sector might struggle to compete with Chinese companies, particularly in light of their dominance in the solar market.
The European Union is taking steps to address this issue by working on new hydrogen subsidy rules to shield European manufacturers from what is seen as “unfair” competition from China, as stated by the bloc’s climate chief on Sept. 2.
Wopke Hoekstra, the EU commissioner for climate action, disclosed this information during a speech at the Eindhoven University of Technology in Eindhoven, Netherlands, at the start of the academic year.
This development comes after a plea from European electrolyzer manufacturers for the commission to establish criteria for products made in Europe in the upcoming European Hydrogen Bank subsidy auction later this year, and also in response to warnings from the industry.
Hoekstra expressed his disapproval of the Chinese regime’s practices that have negatively impacted the EU economy and increased its reliance on China through substantial subsidies in various sectors, including solar. He promised to address this imbalance.
Using hydrogen energy as an example, the commissioner announced that the European Commission will be proposing rules for the next auction this month.
He mentioned plans for explicit criteria to establish European electrolyzer supply chains in future auctions, and also hinted at the possibility of incorporating data security requirements into EU subsidy rules due to concerns surrounding data protection outside of the EU.
Electrolyzers play a crucial role in generating low-emission hydrogen from water using electricity, as opposed to conventional methods that rely on fossil fuels.
Despite the potential of hydrogen energy, its consumption in Europe remains relatively low, with the majority of hydrogen produced using natural gas. The EU aims to significantly increase the production and import of green hydrogen to reduce greenhouse gas emissions by 2030.
In a pilot auction conducted by the EU, seven hydrogen projects were selected out of numerous bids from European countries, receiving a total of 720 million euros in funding.
Currently, China leads in electrolyzer capacity and manufacturing, posing a challenge to European competitors. Reports suggest that China has surpassed Germany in electrolysis technology, raising concerns that a similar scenario seen in other industries could repeat itself.
