EU Revises Hydrogen Subsidies Amid Chinese Market Threat

The European Union is revising its hydrogen subsidy rules to safeguard local manufacturers from competitive pressures posed by Chinese firms. This decision was announced by Wopke Hoekstra, the EU's climate chief, during a speech at the Eindhoven University of Technology. The move comes in response to concerns from European electrolyzer manufacturers, who have requested the establishment of criteria favoring European-made products in the upcoming hydrogen subsidy auction. The urgency of this revision is underscored by warnings that the EU's hydrogen sector risks losing its competitive edge, similar to the fate of the solar market, which has been dominated by Chinese companies. The EU aims to bolster its hydrogen production capabilities as part of its broader climate goals, which include a 55% reduction in greenhouse gas emissions by 2030. Currently, hydrogen constitutes less than 2% of Europe's energy consumption, with the majority produced from natural gas. The European Commission has set ambitious targets to produce and import 10 million metric tonnes of green hydrogen by 2030, but significant gaps remain in the planned capacity versus actual projects underway. In the first pilot auction, the EU allocated €720 million to seven hydrogen projects, highlighting the competitive landscape among European nations. However, the International Energy Agency reports that China leads globally in electrolyzer manufacturing, holding 40% of the market share. This dominance raises concerns about the EU's ability to develop its hydrogen economy without protective measures. Hoekstra emphasized the importance of data security in the new subsidy rules, reflecting apprehensions about data protection in jurisdictions with weaker regulations, such as China. The proposed changes aim to ensure that European cybersecurity and safety standards are upheld, thereby fostering a more resilient and competitive hydrogen sector within the EU.