According to the European Court of Auditors, the EU is unlikely to meet its 2030 targets for the production and import of renewable hydrogen (produced from renewable electricity or biomass), as revealed in a report published on Wednesday 17 July.
Since adopting its hydrogen strategy in 2020 and the REPowerEU plan in 2022, the EU has set itself an initial target of 10 million tonnes of renewable hydrogen produced by 2030 and a second target of 10 million tonnes imported.
Although a total of €18.8 billion in funding is earmarked for hydrogen-related projects, these targets are deemed “unrealistic” by the Court of Auditors, which warns against strategic choices that could potentially harm the competitiveness of key industries or create new dependencies.
The targets set were “not based on a robust analysis” and were “driven by political will”, explains the Court.
However, the auditors recognise that renewable hydrogen, known as “green” hydrogen, can help to decarbonise sectors that are particularly difficult to electrify, such as the petrochemical and steel industries.
The auditors also welcome the speed with which the Commission has established a framework that provides the essential certainty for the establishment of a new market.
Insufficient demand. However, they point out that many investment decisions have been postponed, in particular because supply did not justify demand.
Stef Blok, the member of the Court responsible for the report, explained to the press that we must beware of the “chicken and egg paradox”, indicating that supply depends on demand and vice versa.
In 2022, hydrogen accounted for less than 2% of energy consumption in Europe, with most of the demand coming from refineries.
The report goes on to say that the Commission does not have an overview of the needs or of the public funds available. The €18.8 billion for the 2021-2027 period earmarked for hydrogen projects is scattered across several programmes, which does not help companies to determine the most appropriate type of funding.
The auditors therefore call on the Commission to update its hydrogen strategy.
Consider low-carbon hydrogen. Nor is it out of the question to include “low-carbon” hydrogen, produced from nuclear energy or gas with carbon capture, in the targets set by the Commission.
At least that is what Mr Blok said, indicating that it was “a political decision to be taken into consideration”.
The publication of the Commission’s delegated act on the definition of this “low-carbon” hydrogen should follow later this year.
Following the Court’s publication, the European Commission, anxious to send a strong signal to investors by maintaining the targets it has set, reacted immediately, indicating that the work to develop the European hydrogen market was “far from over”.
In particular, it recognises that “to guarantee the overall level of investment required, this funding will need to be supplemented by funds from the private sector and national authorities”.
See the report: https://aeur.eu/f/d2j (Original version in French by Pauline Denys)