EU refuses call by auditor to update its "unrealistic" hydrogen targets

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EFFORTS by the EU to establish a hydrogen market to decarbonise heavy industry have been criticised by the bloc’s auditor, which has called for a reality check on "unrealistic targets". The EU has denied the request.

The EU has set targets to both produce and import 10 m t/y of renewable hydrogen by 2030 to help decarbonise hard-to-electrify sectors including steel, petrochemicals, cement and fertilisers. The EU based its targets on political will rather than a robust analysis, the European Court of Auditors has found, warning that it is unlikely to meet them unless changes are made.

“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.”

The EU has set aside €18.8bn (US$20.4bn) in funding for hydrogen projects from 2021-2027. Yet, the auditor says the demand stimulated by the EU’s strategy is unlikely to reach 10m t/y by 2030 let alone the 20m t/y target set.

In its response to the recommendations made by the auditor, the EU accepted that it should update it hydrogen strategy to avoid altering the competitiveness of industries it is looking to decarbonise and avoid the risk of further deindustrialisation.

However, the EU refused to update its production and import targets given that legislation has been introduced to increase demand obligations for renewable hydrogen.

“The Commission accepts to assess whether the aspirational targets can be reached, but cannot commit to any update at this stage,” the EU said in its response.

Auditors also cautioned that the EU had failed to consider all parts of the hydrogen value chain when estimating how much investment was needed to create a market for renewable energy. The EU turned down the auditor’s call to publish a roadmap for the development of the hydrogen value chain saying it did not believe it would add any value on top of an updated hydrogen strategy.

The trade group Hydrogen Europe has criticised the EU’s response, in particular the bloc’s charge that it is too early to assess the success of its efforts to create a hydrogen market.

“On this, Hydrogen Europe begs to differ. The 2020 hydrogen strategy envisaged 6 GW by 2024. that target has not been met. Today we have 0.4GW installed,” Daniel Fraile, chief policy officer at Hydrogen Europe told TCE. He warned that hydrogen production regulations covering when and where renewable energy is available are overly restrictive and has led to several projects being cancelled or delayed.

The auditors said the requirement from 2030 that renewable energy be generated and within an hour used to produce hydrogen would increase the cost of production.

“We simply cannot emphasise enough the complexity involved in designing a viable renewable hydrogen project that complies with this requirement. So, we would recommend the Commission urgently revisit these rules before 2030. Otherwise, it will be too late, and a lot of harm will have been done to the sector by then,” Fraile said.