Top hydrogen trade bodies are calling on the European Commission to lay down clean hydrogen usage mandates, allow the stacking of EU and national incentives, and streamline funding.
In an open letter to Commissioners, the Hydrogen Council, Hydrogen Europe, the Renewable Hydrogen Coalition and the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) said without their recommendations, clean hydrogen’s scale up “will not happen.”
They stressed that “market activation measures” should set binding targets for the use of sustainable products, such as green steel or green ammonia, in state-funded projects.
“Market activation should help bridge the cost gap to make sustainable products cost-competitive with polluting alternatives,” it reads.
The bodies also call for streamlined funding instruments for “scale, simplicity and speed.”
“Launching the most mature projects in the pipeline should be a top priority of the new European Commission,” they say, calling for increased public funding into “one single funding instrument.”
The letter said existing and unspent public funds should be funnelled into the European Hydrogen Bank (EHB) auction mechanism to complement Innovation Fund revenues.
It also EHB funding should be stackable with national grants and incentives. This is currently barred under EU state aid rules to prevent excessive subsidies and market distortions.
However, the groups argue it leaves project developments awarded with EHB funding “a difficult choice” between EHB and other funds secured after “lengthy and resource-intense application processes.”
“Multiple countries around the world, including the US, Japan and Australia, are offering stackable funding support measures for hydrogen production and deployment,” the letter states.
However, some policymakers in Europe have warned that unrestricted stacking of funds could lead to over-subsidisation, distorting market competition and inefficiently allocating public resources.
The groups also outline the need for the bloc to streamline its funding mechanisms to accelerate hydrogen deployment. They argue that complex and fragmented funding programs create uncertainty for project developers, discouraging investment.
They suggest reforms such as consolidating existing schemes, setting out clear auction timelines, centralising funding platforms and de-risking with loan guarantees to attract
“Without [these] improvements, the scale-up of required investments will not happen,” they warned. “Industries including steel, fertilisers, chemicals, aviation and shipping will not be able to modernise and become more competitive globally.”
This, they say, will force industries to relocate and see Europe “lose the race” on futureproofing jobs, industries and clean tech.
“This means that the EU will fail to meet its targets, while climate change continues to worsen,” the letter stresses.
It comes as the EU faces significant challenges in meeting its 2030 REPowerEU goals of producing and importing a combined 20 million tonnes of green hydrogen per year.
Last year, two reports from EU institutions painted a picture of an uncoordinated effort to transpose the bloc-wise regulations that govern hydrogen to a member state level.
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