Relevant EU Hydrogen Policies
European Green Deal: published in 2019, is referring to renewable hydrogen as one of the priority areas where innovative and market-ready technologies are needed to accelerate the phasing-out of fossil fuels and to ensure economic and social welfare to EU citizens, in a sustainable economy that addresses the three interdependent environmental crises: climate change, biodiversity loss and pollution.
EU Strategy on Hydrogen: Adopted in 2020 as part of the European Green Deal, including policy actions in 5 areas: investment support; support production and demand; creating a hydrogen market and infrastructure via the launch of the European Clean Hydrogen Alliance; research and innovation, and international cooperation. The Hydrogen strategy mentions that the cumulative investments in renewable hydrogen in Europe could be up to €180-470 billion by 2050.
RePower EU: Following the Russian invasion of Ukraine in 2021, the crucial role of renewable hydrogen to ensure the continent’s energy security was reaffirmed in the RePower EU Communication, to help phase out Russian fossil fuel imports as soon as possible. It introduced the Hydrogen Accelerator to double the previous EU renewable hydrogen production target to 10 million tons of annual domestic production, plus an additional 10 million tons of annual renewable hydrogen imports by 2030.
Renewable Energy Directive: Specifies the Renewable Fuels of Non-Biological Origin (RFNBOs, such as electrolytic hydrogen) and sets the targets of 1% for transport and 42% for the industry by 2030 for the Union and its Member States. It is also supplemented by the Commission Delegated Regulations specifying the conditions under which hydrogen is accounted as renewable.
Recovery and Resiliency Facility for clean energy: A temporary instrument made available to EU countries in 2021 to confront the consequences of the COVID pandemic. Among other types of clean energy, it supports countries to invest in hydrogen projects across the value chain.
Important Projects of Common European Interest (IPCEIs): Important national investment support on hydrogen has also been provided through this framework. The first IPCEI, called ‘IPCEI Hy2Tech‘ includes 41 projects and was approved in July 2022. It aims at developing innovative technologies for the hydrogen value chain to decarbonise industrial processes and the transport sector, with a focus on end-users.
IPCEI Hy2Use: Approved by the Commission in September 2022 and complements IPCEI Hy2Tech. It will support the construction of hydrogen-related infrastructure and the development of innovative and more sustainable technologies for the integration of hydrogen into the industrial sector.
IPCEI Hy2Infra was approved in February 2024, and supports the development of electrolysers, hydrogen transmission and distribution pipelines, large-scale hydrogen storage facilities and handling terminals.
IPCEI Hy2Move: jointly prepared and notified by 7 EU countries, was approved in May 2024 and will cover a wide part of the hydrogen technology value chain for transport, by supporting the development of a set of technological innovations.
EU Clean Industrial Deal, published on February 26, 2025, as announced in the Political Guidelines (2024-2029), of EU Commission President von der Leyen to be submitted within the first 100 days of the Commission’s mandate, will be one of the most important dossiers in the coming years to ensure competitiveness and prosperity in the EU. The Clean Industrial Deal is implementing the recommendations of the so-called Draghi report:
The Draghi report, was developed by Mario Draghi, the illustrious president of the European Central Bank for many years.
It focusses on three key actions, with immediate impact on hydrogen development, to boost competitiveness:
- Closing the innovation gap: ‘AI Gigafactories’ and ‘Apply AI‘ initiatives will be developed to drive development and industrial adoption of AI in key sectors. Action plans for advanced materials, quantum, biotech, robotics and space technologies. A dedicated EU Start-up and Scale-up Strategy will address the obstacles that are preventing new companies from emerging and scaling up. A proposal for a 28th legal regime will simplify applicable rules, including relevant aspects of corporate law, insolvency, labour and tax law, and reduce the costs of failure.
- A joint roadmap for decarbonisation and competitiveness: high and volatile energy prices are considered as a key challenge. The Clean Industrial Deal will sets out a competitiveness-driven approach to decarbonisation, aimed at securing the EU as an attractive location for manufacturing, including for energy intensive industries, and promoting clean tech and new circular business models. An Affordable Energy Action Plan will help bring down energy prices and costs, while an Industrial Decarbonisation Accelerator Act will extend accelerated permitting to sectors in transition. In addition, tailor-made action plans for energy intensive sectors, such as steel, metals, and chemicals, sectors which are the backbone of the European manufacturing system
- Reducing excessive dependencies and increasing security. The EU has the largest and fastest growing network of trade agreements in the world covering 76 countries that account for almost half of the EU’s trade. However a new range of Clean Trade and Investment Partnerships has been announced to help secure supply of raw materials, clean energy, sustainable transport fuels, and clean tech from across the world. A thorough review of the Public Procurement rules will allow for the introduction of a European preference in public procurement for critical sectors and technologies.
The EU Competition Compass, presented on Janury 29, 2025 sets out an approach and a selection of flagship measures to translate each of these actions into five concrete enablers:
- Simplification: The upcoming Omnibus proposal will simplify sustainability reporting, due diligence, and taxonomy. Furthermore, the Commission will facilitate doing business for thousands of small mid-cap companies. The Compass sets a target of cutting by at least 25% the administrative burden for firms and by at least 35% for SMEs. This will have an impact on the permitting duration of hydrogen infra projects as well
- Lowering barriers to the Single Market: For 30 years, the Single Market has been Europe’s tried and tested engine for competitiveness: to build on this experience a Horizontal Single Market Strategy seeks to removing intra-EU barriers and preventing the creation of new ones. In addition, the Commission will take the opportunity to make standard-setting processes faster and more accessible, in particular for SMEs and start-ups.
- Financing competitiveness. The EU plans to create a European Savings and Investments Union, a new savings and investment products, provide incentives for risk capital, and ensure investments flow seamlessly across the EU. A refocused EU budget will streamline access to EU funds in line with EU priorities.
- Promoting skills and quality jobs. To ensure a good match between skills and labour market demands, the Commission will present an initiative to build a Union of Skills focusing on investment, adult and lifelong learning, future-proof skills creation, skill retention, fair mobility, attracting and integrating qualified talent from abroad and the recognition of different types of training to enable people to work across the EU.
- Better coordination of policies at EU and national level. The Commission will introduce a Competitiveness Coordination Tool, which will work with Member States to ensure implementation at EU and national level of shared EU policy objectives, identify cross-border projects of European interest, and pursue related reforms and investments. In the next Multiannual Financial Framework, a Competitiveness Fund will replace multiple existing EU financial instruments with similar objectives, providing financial support to the implementation of actions under the Competitiveness Coordination Tool.
The Clean Industrial Deal builds further on the input from industry leaders, social partners and civil society in the context of the Antwerp Declaration for a European Industrial Deal and the Clean Transition Dialogues.
The European Hydrogen Bank, announced by President von der Leyen in her State of the European Union address in 2022, is an initiative to facilitate the EU’s domestic production and imports of renewable hydrogen. It aims to unlock private investment in the EU and in third countries by addressing investment challenges, closing the funding gap and connecting future renewable hydrogen supply to consumers.
The first auction of the European Hydrogen Bank received 132 bids from 17 European countries requesting over 15 times the available €800 million budget. 119 proposals were found to be eligible and admissible, and were then ranked according to their bid price, and evaluated by the European Climate, Infrastructure and Environment Executive Agency (CINEA). The bids submitted ranged from €0.37 to €4.5 per kilogram of renewable hydrogen produced.
Hydrogen Bank’s H2 Auction strategy: The Second Hydrogen Auction will open on 3 December 2024 and will award up to €1.2 billion support to renewable hydrogen producers located in the European Economic Area (EEA). Building upon the success of last year’s pilot auction (IF23 Auction), the second auction will further contribute to the creation of a European market for renewable hydrogen by de-risking investments with public support.
The successful bidders under the IF24 Auction will receive a fixed premium in €/kg of renewable hydrogen produced, over a maximum of ten years of operation. The Innovation Fund support will bridge the gap between production costs and the price that off-takers’ are ready to pay for renewable hydrogen .