Politico: Investments in Hydrogen
BURSTING THE HYDROGEN BUBBLE? The EU is set to spend close to €19 billion funding companies that produce hydrogen as part of its push to slash fossil fuel use and achieve climate neutrality by 2050. That plan has been cast into doubt, however, by a new report from Brussels’ own financial watchdog, the European Court of Auditors.
Hydrogen bombshell: In an explosive new analysis published this morning, the ECA’s finance hawks say the Commission’s plans to make and import 20 million tons of the clean-burning gas by 2030 aren’t realistic and need “a reality check.” Those targets, it says, “were not based on a robust analysis, but were driven by political will,” and need to be reassessed if the industry has any hope of hitting them.
Supply and demand: The report, authored by the Netherlands’ former economy minister, Stef Blok, is the first major critique of the hype surrounding massive investments in hydrogen. But while producers are ramping up, the need for the renewable-generated gas just isn’t there, Blok said in a press release ahead of the launch. Demand “will not even reach 10 million tons by 2030, let alone 20 million tons, and there is no overall EU hydrogen import strategy,” he claimed.
A reminder: EU legislation has made several references in recent years to the maritime and aviation sectors as difficult to decarbonize, and thus likely to be the first beneficiaries of any green hydrogen to be produced or imported.
Friends in high places: The electrolyzer industry, the biggest recipient of the funds, has seen a dramatic increase in subsidies, while other green tech industries have struggled for cash — a trend that auditors say hasn’t been driven by sufficient evidence. “Clean hydrogen will have a central place in the climate-neutral economy of the future and I am proud of Europe’s role as the world’s clean hydrogen trailblazer,” European Commission President Ursula von der Leyen said in November, opening European Hydrogen Week.
Industry reacts: Jorgo Chatzimarkakis, CEO of Hydrogen Europe, lavished praise on the report. Speaking to our colleague Gabriel, he said the “exhaustive and strong analysis” proved that not enough is being done to deliver on the promise of hydrogen, and that EU legislation was too lengthy and complex. “While some member states want to develop low-carbon hydrogen, the Commission appears stubbornly against creating a framework that will boost its use,” he added.