EU tightens hydrogen subsidy regulations after China concerns

After local industries expressed concerns about cheap Chinese imports and the EU's climate change policy head, said Monday, that the European Commission is working to tighten rules so that EU funding for projects involving hydrogen benefits European companies.

This month, the EU will launch its second round of funding to support green hydrogen projects. Brussels is trying to jump-start an industry in order to produce this fuel locally.

The EU has also imposed tariffs on Chinese electric vehicles, which they claim are subsidized excessively.

European producers of electrolysers - machines that split water using electricity to produce hydrogen - have warned that they cannot compete against cheaper Chinese manufacturers.

Climate commissioner Wopke Hekstra stated that the EU was working to add criteria to the Hydrogen Bank financing scheme to give preference to local firms.

The next auction will be completely different. "We will have explicit criteria for building European electrolyser supplies chains", Hoekstra said during a speech given at Eindhoven's University of Technology.

"If European cybersecurity, safety, and the data of our people, and our companies, cannot be ensured, then companies cannot receive support," Hoekstra stated, adding that China has an oversupply on the market, at lower prices, while Europe is a strong electrolyser manufacturer.

Hoekstra stated that the criteria for hydrogen subsidies, although not finalized, could include a requirement to work within Europe or a limitation on projects' dependency on non-EU nations.

In a joint interview, he said that the cybersecurity rules were designed to ensure European data did not "end up in the hand of governments outside the (European) Union".

In April, the EU allocated 720 millions euros to seven EU Hydrogen projects. Industry sources said that the low bids for some of the successful projects were indicative of the use cheaper Chinese equipment.

The Commission hasn't revealed if that is the case.

According to a document from the Commission, viewed by, around a quarter (24%) of the projects who applied for funding intended to purchase their electrolysers outside the EU. A quarter of the projects that applied for funding planned to source their electrolysers from outside the EU.

Hoekstra stated that the EU would not cut off ties with China but take action if it felt there was unfair competition. (Reporting and editing by Kate Abnett)

(source: Reuters)