Brussels, 30 September 2024
The European Clean Hydrogen Alliance has published its ‘Learnbook on Financing of Hydrogen Infrastructure’, which is intended to illustrate perspectives on the possibilities for hydrogen infrastructure financings, including informing on the availability of current financing sources and exploring further options that could be established. Possible financing obstacles and how to tackle the most pressing challenges are also addressed.
One key objective of the European Clean Hydrogen Alliance is to promote investments in clean hydrogen across the value chain, supporting regular and transparent information on how to access these investments and providing supports, where needed, to investors to implement their projects. The purpose of this Learnbook is to illustrate how best to support the financing of hydrogen infrastructure necessary to achieve the EU’s climate and energy goals.
Given the current status of an underdeveloped clean hydrogen market, the Learnbook explores the likely mechanisms to minimise investment risk for stakeholders. Furthermore, the Learnbook provides various recommendations to EU policymakers and National Regulatory Authorities, outlining approaches that are being developed at national level within the EU and in third countries. These recommendations might be considered at European level to further increase the financial viability of European hydrogen infrastructure projects and ease financiers’ decisions.
Suggestions include commercially incentivising investors to incur risks in a nascent market; providing a larger support of development costs with public money; widening the eligibility of public support from pipeline networks to clean hydrogen import and terminals; and clarifying the circumstances under which European clean hydrogen infrastructure assets are considered sustainable.
Piotr Kuś, ENTSOG General Director, comments, “Infrastructure is key to connect supply and demand, and investors of this infrastructure need a robust and supportive financing structure to make the hydrogen economy a reality. We are honoured to act as a facilitator of the ECH2A Transmission and Distribution Roundtable, which created this Learnbook. This report includes a variety of perspectives and opinions from financiers, academia, NGOs and industry – their contributions add great value to the report content.”
KfW IPEX-Bank acted as co-chair to one of the Transmission and Distribution Roundtable Task Forces. Andreas Ufer, Member of the Management Board of KfW IPEX-Bank, states, “Setting up the infrastructure for hydrogen is a major challenge in the energy transition. Having financed various types of infrastructure for decades, we are ready to bring in our expertise to advance this important component for the decarbonisation of our economies and societies. The collaboration with ENTSOG and the EC in the European Clean Hydrogen Alliance has been very fruitful, and I believe this Learnbook provides important food for thought for the various stakeholders. It is our ambition to develop tailor-made financing solutions for major hydrogen infrastructure projects in Europe to help meet the EU’s climate and energy goals.”
The Learnbook on Financing of Hydrogen Infrastructure is a product of the Transmission and Distribution Roundtable of the European Clean Hydrogen Alliance and is available on the website of Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs here listed under ‘Timeline’, and on the ENTSOG website, here.
The Learnbook is the third report from the Transmission and Distribution Roundtable, with the first Learnbook focusing on Hydrogen Supply Corridors and the second on Hydrogen Imports to the EU. An additional Learnbook on Implementation of Hydrogen Supply Corridors is planned to be published later this year.
Notes
The European Clean Hydrogen Alliance was set up in July 2020 to support the large-scale deployment of clean hydrogen technologies by 2030. It brings together renewable and low-carbon hydrogen production, demand in industry, mobility and other sectors, and hydrogen transmission and distribution. Its members come from industry, public authorities, civil society, and other stakeholders. More information is available on the ECHA website.
The European Network of Transmission System Operators for Gas (ENTSOG) was founded in 2009 and has played a key role in facilitating integration of the European gas markets, ensuring technical interoperability and providing security of supply by gas infrastructure planning. Looking forward, ENTSOG is contributing to the net-zero decarbonisation by 2050, in particular, by the integration of renewable and low carbon gases via future-proof gas transmission pipelines, in line with the EU energy and climate goals. More information on ENTSOG can be found on our website www.entsog.eu or contact info@entsog.eu.
KfW IPEX-Bank is responsible for project and export finance within KfW Group. It supports German and European companies operating in key industrial sectors in global markets by structuring medium and long-term financing for their exports, funding infrastructure investments, securing supply of raw materials and by financing environmental and climate change mitigation projects worldwide. As a bank that stands for transformation, it finances technologies of the future to support the transition towards sustainable society in all three dimensions of the economy, environment and social. As specialist bank, KfW IPEX-Bank has extensive industry, structuring and country expertise, it takes on leading roles in financing consortia and actively involves other banks, institutional investors and insurance firms. KfW IPEX-Bank operates as a legally independent group subsidiary and is represented in the most important economic and financial centres across the globe.
Source – ENTSOG