The European Commission has pledged a raft of new financial and regulatory measures to help electrolyser manufacturers ramp up their production capacity tenfold by 2025 to meet the EU’s ambitious RepowerEU green hydrogen production targets.

The plan was agreed under a joint declaration signed in Brussels by the Commission and 20 CEOs from the European electrolyser manufacturing sector.

The EU doubled its 2030 hydrogen production target to 10mn t in March as part of RepowerEU, an emergency strategy designed to curb its reliance on Russian oil and gas in response to the war in Ukraine.

Achieving the RepowerEU goal would require an increase of electrolyser production to around 25GW/yr and an installed electrolyser capacity of 90-100 GW. Current European manufacturing capacity is 1.75GW/yr. Manufacturers have agreed to raise capacity to a combined 17.5GW/yr by 2025, followed by further increases in line with demand to 2030.

17.5GW/yr – Target capacity by 2025

“With RepowerEU, we have just doubled our target for EU hydrogen production to 10mn t by 2030. This will require large amounts of electrolysers for hydrogen production,” says internal market commissioner Thierry Breton.

“Today, industry agreed to a tenfold increase in electrolyser manufacturing capacities in Europe to meet our RepowerEU targets. The commission is committed to support this important industrial upscaling with a number of supportive measures.”

Access to funds

Supportive measures pledged by the Commission include giving electrolyser manufacturers access to the EU Innovation Fund, which is financed by revenues from the EU emissions trading system (ETS). The commission will “seek to support” clean tech manufacturing, including electrolyser manufacturing projects, in the fund’s third large-scale project call, which is scheduled for the second half of this year.

The Commission will also speed up the process of assessing the eligibility of hydrogen projects seeking state aid. It commits to complete assessments of the first hydrogen projects submitted under the Projects of Common European Interest scheme (IPCEI) within six weeks of their submission.

The Commission will also support the roll-out of carbon contracts for difference (CCfD) incentive schemes for hydrogen—which are already being developed by several EU member states. And it will explore the option of an EU-wide CCfD pilot scheme and seek reforms to the ETS Directive to allow the Innovation Fund to form the legal basis for such a scheme.

“There is no acceleration in electrolyser manufacturing in Europe without adequate regulatory and financial support” Lokke, Nel

The declaration acknowledges the need to boost renewable power capacity to support hydrogen production, with the 2030 hydrogen targets requiring 500TWh of electricity. The Commission says it will shortly adopt legislative proposals to accelerate permitting processes for renewable projects, including hydrogen.

“The electrolyser manufacturing capacity must be scaled up significantly to meet the expected European demand for renewable hydrogen,” says Jon Andre Lokke, CEO of Norwegian electrolyser maker Nel Hydrogen and president of industry group Hydrogen Europe. 

“There is no hydrogen accelerator without an acceleration in electrolyser manufacturing. There is no acceleration in electrolyser manufacturing in Europe without adequate regulatory and financial support. Cost-effective and scalable solutions are key qualification criteria.”

---

Author: Stuart Penson