As the European Union (EU) faces challenges in achieving its green hydrogen production goals, calls are intensifying for the bloc to broaden its support by incorporating operational expenditure (OPEX) initiatives like those endorsed by the United States, which could expedite the EU’s decarbonization drive.
In 2022, the European Commission (EC) set a target of producing 10 million tonnes of renewable green hydrogen within the EU by 2030, with an additional 10 million tonnes to be imported. This initiative forms a core part of its strategy to curtail greenhouse gas (GHG) emissions. However, in light of industry claims that the EU’s intricate regulations may impede such progress, it is being encouraged to adopt a wider spectrum of generation-focused incentives akin to those provided by the US Inflation Reduction Act (IRA) to fast-track decarbonization efforts.
“As a zero-carbon fuel, leveraging green hydrogen is crucial for the EU to attain both its immediate production objectives and its long-term net-zero emissions target by 2050,” asserts Richard Yu, Director of Business Development, Hydrogen at IMI Critical Engineering. He continued, “Current support packages, including the Green Deal Industrial Plan and RePowerEU, are commendably ambitious, particularly considering the ongoing impact of global geopolitical events on energy markets. Nevertheless, further action is required, and the progress made in the US, encompassing the IRA and the nation’s inaugural dedicated clean hydrogen strategy and roadmap, offers a clear blueprint that the EU could follow.”
Yu highlighted the IRA’s hydrogen production tax credit, providing up to $3/kg of hydrogen for every zero-carbon fuel supplied, as an example of the level of OPEX backing not yet evident in the EU’s plans, which are primarily focused on capital expenditure (CAPEX) measures. “For hard-to-abate sectors such as cement, steel, aluminium and chemicals, alongside energy-intensive industrial and heavy transport industries, this will facilitate a swifter transition to green fuel use in line with the roadmap,” he noted.
Yu suggests that the incorporation of US-style support could help counter potential hurdles related to the present scarcity of large-scale hydrogen production infrastructure, including hydrogen refuelling stations. In his view, the development and adoption of decentralized solutions such as the Proton Exchange Membrane (PEM) electrolyser technology, backed by CAPEX and OPEX initiatives, represent a crucial first step for organizations aiming for sustainable site power.
“A new production tax credit model would further stimulate the uptake of these technologies across multiple industries and applications. If the EU takes this step, it could supercharge what has already been promising progress,” Yu stated. He added, “For organizations looking to immediately implement decarbonization strategies while ensuring energy security for their operations, solutions such as electrolyser technologies may appeal – especially while grid prices, supplies and mixes are in flux.”
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