- 2030 goals for renewable hydrogen production and demand were overly ambitious
- Chicken-and-egg problem: supply depends on demand, and vice versa
- Risk of less competitive key industries and new strategic dependencies
The EU has had mixed success in providing the building blocks for the emerging renewable hydrogen market, according to a report by the European Court of Auditors. While the European Commission has taken a number of positive steps, challenges remain all along the hydrogen value chain, and the EU is unlikely to meet its 2030 targets for the production and import of renewable hydrogen. The auditors call for a reality check to ensure that the EU’s targets are realistic, and that its strategic choices on the way ahead will not impair the competitiveness of key industries or create new dependencies.
Renewable or “green” hydrogen carries significant implications for the future of key EU industries, as it can help to decarbonise especially hard-to-electrify sectors such as steel production, petrochemicals, cement, and fertilisers. It can also help the EU to meet its 2050 climate goals of zero carbon emissions and further reduce the EU’s reliance on Russian fossil fuels.
“The EU’s industrial policy on renewable hydrogen needs a reality check,” said Stef Blok, the ECA Member in charge of the audit. “The EU should decide on the strategic way forward towards decarbonisation without impairing the competitive situation of key EU industries or creating new strategic dependencies.”
To start with, the Commission set overly ambitious targets for the production and import of renewable hydrogen, i.e. 10 million tonnes each by 2030. These targets were not based on a robust analysis, but were driven by political will. Moreover, achieving them has had a bumpy start. Firstly, member states’ differing ambitions were not always aligned with the targets. Secondly, in coordinating with the member states and industry, the Commission failed to ensure that all parties were pulling in the same direction.
On the other hand, the auditors give credit to the Commission for proposing most legal acts within a short period of time: the legal framework is almost complete, and has provided certainty that is key to establishing a new market. However, agreeing on the rules that define renewable hydrogen took time, and many investment decisions were deferred. Project developers also defer investment decisions because supply depends on demand, and vice versa.
Building up an EU hydrogen industry requires massive public and private and investment, but the Commission does not have a full overview of needs or of the public funding available. At the same time, EU funding – estimated by the auditors at 18.8 billion euros for the 2021-2027 period – is scattered between several programmes, thus making it difficult for companies to determine the type of funding best suited for a given project. The bulk of EU funding is used by those member states with a high share of hard-to-decarbonise industry, and which are also more advanced in terms of planned projects, i.e. Germany, Spain, France, and the Netherlands. However, there is still no guarantee that the EU’s hydrogen production potential can be fully harnessed, or that public funding will allow the EU to transport green hydrogen across the bloc from countries with good production potential to those with high industrial demand.
The auditors call on the Commission to update its hydrogen strategy, based on a careful assessment of three important areas: how to calibrate market incentives for renewable hydrogen production and use; how to prioritise scarce EU funding and which parts of the value chain to focus on; and which industries the EU wants to keep and at what price, given the geopolitical implications of EU production compared to imports from non-EU countries.
Background information
Hydrogen can be produced in different ways, e.g. from water using electricity (electrolysis), or from (reforming) natural gas. Renewable hydrogen – i.e. hydrogen produced using either renewable electricity or biomass – is one way to make the EU’s heavy industries climate-friendly.
However, renewable hydrogen comes with its own challenges, including the cost of production, and the need for renewable electricity and water. In 2022, hydrogen accounted for less than 2 % of Europe’s energy consumption, with the largest share of demand coming from refineries. According to the report, the demand that is expected to be stimulated will not even reach 10 million tonnes by 2030, let alone the 20 million tonnes initially envisaged by the Commission. The auditors also note that, as things stand, there is no overall EU hydrogen import strategy.
Special report 11/2024, “The EU’s industrial policy on renewable hydrogen: legal framework has been mostly adopted – time for a reality check”, is available on the ECA website. The ECA has previously issued several reports on the EU’s industrial policy, including on energy storage technologies and on batteries.
Related links
Statements der CDU zum Wasserstoff-Sonderbericht des EU-Rechnungshofs
Zum Sonderbericht des Europäischen Rechnungshofs zur “Industriepolitik der EU im Bereich erneuerbarer Wasserstoff” erklären
Christian Ehler (CDU), industrie- und energiepolitischer Sprecher der EVP-Fraktion:
“Ohne ausreichend Wasserstoff wird die Transformation der Wirtschaft nicht gelingen. Um das Henne-Ei-Problem bei den Investitionen in Produktion und Netze zu beheben, müssen wir pragmatischer in der Anrechnung von grünem und low-carbon Wasserstoff werden, Erhöhungen von Wasserstoffzielen durch die Hintertür verhindern und dürfen Regeln nicht überverkomplizieren. Wir müssen Fördermittel für Produktion und Infrastruktur massiv stärken. Gleichzeitig muss die EU Energiepartnerschaften mit unseren Nachbarländern aufbauen, um die notwendigen Importe zu günstigen Preisen sicherzustellen. ”
Prof. Dr. Andrea Wechsler (CDU), designiertes Mitglied im Ausschuss für Industrie, Forschung und Energie:
„Der europäische Wasserstoffhochlauf darf nicht an überbordender Bürokratie scheitern. Wettbewerbsfähigkeit und Energiewende müssen Hand in Hand gehen. Die Industrie ist der Dreh-und Angelpunkt der grünen Transformation und essentiell für unsere wirtschaftliche Sicherheit und die Schaffung von Arbeitsplätzen. Deshalb heißt es jetzt europäische Finanzierungsprogramme an die Herausforderungen anzupassen und die derzeitigen Regelkataloge zur Finanzierung zu optimieren.“
Quelle – CDU/CSU-Gruppe im EU Parlament per E-Mail