The EU’s widely anticipated Clean Industrial Deal has introduced key hydrogen measures to break through regulatory, financing and scaling challenges facing the industry.
The European Commission will adopt the Delegated Act on low-carbon hydrogen in Q1 2025 to clarify rules on fossil fuel with carbon capture-based hydrogen and production from non-renewable supplied electrolysers.
It also plans to launch a third European Hydrogen Bank auction with a €1bn ($1.05bn) budget to bolster further green hydrogen production. This will be supported by a new “hydrogen mechanism” under EHB in Q2 to connect suppliers with offtakers.
Furthermore, the Commission has promised to launch a study to assess the effectiveness of its renewable fuels of non-biological origin (RFNBO) criteria – which has been heavily criticised by green hydrogen players for being overly restrictive.
Read more:Germany’s Habeck presses EU to ease hydrogen regulations as costs stifle growth
The criteria impose additionality, hourly matching and grid correlation requirements for electrolyser operators.
The bloc also plans introduce a voluntary label on the carbon intensity of industrial products under the Industrial Decarbonisation Act, based on a methodology using ETS data.
Such labels will allow industrial producers to distinguish the carbon intensity of their industrial production and to benefit from targeted incentives, like hydrogen-based clean steel. They could also be used by Member States to design tax incentives and other support schemes in line with State aid rules, the Commission said.
In a bid to support domestic manufacturing, the Commission has announced €100bn ($105bn) of funding to improve the business case of ‘Made-in-EU’ clean manufacturing.
Ursula von der Leyen, President of the European Commission, said the Clean Industrial Deal is all about supporting energy-intensive industries and smart start-ups so that they can be more successful with their breakthrough innovations.
“Of course, it’s also about reducing energy costs – we’re working hard to increase low-carbon energy because it’s homegrown. We will have a long-time baseload of nuclear or gas, and renewable energy, because that’s creating good jobs and gives us energy security, lower prices, and makes us independent from Russian fossil fuels,” she said.
“We know that too many obstacles still stand in the way of our European companies from high energy prices to excessive regulatory burden. The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe.”
Domien Vangenechten, Programme Lead on EU Industry at E3G, said industries are on a ‘knife-edge’ and accelerating their decarbonisation presents the best bet to future security.
“The Clean Industrial Deal will need to balance short-term relief with long-term clarity and support, provide demand signals to create lead markets and set out a true European industrial policy. This will mean also taking bold political decisions on which parts of industrial supply chains really have a future in Europe,” he said.
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