Hydrogen strategy: EU auditors criticize the EU Commission's targets

The EU Court of Auditors has criticized the EU Commission for its hydrogen strategy. Its targets of achieving 10 million tons of hydrogen per year through production and imports are not based on a sound analysis, but are driven by political will, according to a statement by the EU auditors. The EU Commission is unlikely to achieve these targets.

The auditors are sympathetic to the fact that the EU Commission has proposed most of the necessary legal acts in a short timeframe. The legal framework is almost complete and has created the security that is crucial for a newly emerging market. However, it took too long for the parties involved to agree on what exactly is meant by renewable hydrogen and which regulations apply to it. As a result, many investment decisions have been postponed. Project developers also postponed investment decisions, as supply depends on demand and vice versa.

Bumpy start

Overall, the first step towards the target of 20 million tons of hydrogen was bumpy, according to the EU auditors. The different ambitions of the EU member states were not always in line with the targets, and the Commission did not ensure that all parties were pulling in the same direction during the consultation with the EU member states and industry.

The EU Court of Auditors also criticized the fact that the EU Commission did not have a complete overview of the requirements or the available public funds. Massive public and private investments would have to be made to develop the hydrogen industry in the EU. At the same time, the EU funding of an estimated 18.8 billion euros in the years 2021 to 2027 is scattered across several programs. This makes it difficult for companies to decide which type of funding is best suited to a project.

Questions to and for the EU Commission

The majority of EU funding goes to EU countries with a high proportion of industrial sectors in which carbon neutrality is difficult to achieve. Here, the auditors list Germany, Spain, France and the Netherlands. At the same time, project planning in these countries is quite advanced. However, there is still no guarantee that the potential for hydrogen production in the EU can be fully exploited. There is also no guarantee that public funds can be used to transport green hydrogen within the EU from countries with high production potential to countries with high industrial demand.

The Commission therefore needs to update its hydrogen strategy, say the EU auditors. In doing so, it should clarify how precise market incentives can be created for the production and use of renewable and low-carbon hydrogen. It should also find out how EU funds should be prioritized and on which parts of the value chain the focus should be placed. It is also questionable which industries should be kept in the EU and at what price.

The EU Commission presented its hydrogen strategy four years ago. Among other things, it envisages an electrolysis capacity of 40 GW by 2030. From 2030 to 2050, the technology for renewable hydrogen should be mature and "used on a large scale in all sectors where decarbonization is difficult".

(anw)