According to a report by Reuters on September 2, the European Union's climate policy chief stated that the European Commission is drafting stricter rules to ensure that EU funding for hydrogen projects benefits local European companies. This move comes after concerns were raised by local industries about the influx of competitively priced Chinese imports.
In an effort to revitalize the local hydrogen fuel production industry, the EU will launch the next round of green hydrogen project funding this month. Simultaneously, the EU is adopting a tougher stance on other Chinese green technologies, such as imposing tariffs on Chinese-made electric vehicles, citing that these vehicles benefit from excessive "state subsidies."
European electrolyzer manufacturers (machines that use electricity to split water into hydrogen) have warned that they cannot compete with lower-cost Chinese manufacturers. As a result, they hope the EU will include standards in the hydrogen industry funding program that favor local companies to protect them. EU Climate Commissioner Wopke Hoekstra confirmed that the European executive body is currently examining this issue.
Wopke Hoekstra indicated that while the specific hydrogen subsidy standards in the EU's plan have not yet been finalized, they may require projects to be completed within Europe or limit reliance on non-EU countries. In a joint interview with Reuters and Politico, he added that related cybersecurity rules are designed to ensure that European data "does not fall into the hands of governments outside the EU."
"The new subsidy conditions will be different. We will have clear standards to build a European electrolyzer supply chain. If Europe's cybersecurity and other security aspects are not guaranteed, if the data of our people and companies are not protected, then the relevant companies will not receive support," Hoekstra stated.
Hoekstra added that while Europe has a strong foundation in electrolyzer manufacturing, China is supplying the European market at lower prices. If the EU finds evidence of unfair competition in the market, it will take appropriate action.
In April of this year, the EU awarded €720 million to seven hydrogen projects. At the time, industry sources told Reuters that some projects won bids at low prices, indicating that they would use more affordable Chinese equipment. However, the European Commission has not disclosed whether this was indeed the case.
A European Commission document seen by Reuters revealed that approximately one-quarter of the projects applying for funding plan to source electrolyzers from outside the EU, while nearly another quarter plan to use a mix of EU and non-EU manufactured equipment.
