The EU has redoubled its efforts to kickstart the growth of clean hydrogen supply and demand as part of a wider package of measures designed to drive investment in clean technology and decarbonisation.

The EU said it will launch its third European Hydrogen Bank auction of green hydrogen subsidies in the third quarter of 2025 with a budget of up to €1b ($1.05b) in a move to “de-risk and accelerate the uptake of hydrogen production”.

The EU will also adopt another delegated act in the first quarter of the year, to clarify the rules for producing blue hydrogen “in a pragmatic way, providing certainty to investors”.

“The Clean Industrial Deal is Europe’s business plan to tackle the climate crisis, boost the competitiveness, ensure economic resilience and retain talent” Ribera, European Commission

The Commission also said it is preparing a review of the EU’s delegated act on renewable fuels of non-biological origin, which it uses to define clean hydrogen. The review will “identify possible barriers to the upscaling of renewable hydrogen”.

In 2022, the EU set itself a 2030 target to produce 10mt/yr of clean hydrogen, and to import the same volume. Both targets look increasingly out of reach as the number of hydrogen projects progressing to FID remains limited.

The EU’s new strategy also includes significant financial support for the decarbonisation of industry, policies which will potentially drive the uptake of hydrogen as well as other clean fuels and electrification. The EU will launch a €1b pilot auction of subsidies for the decarbonisation of key industrial processes across various sectors, while an industrial decarbonisation bank is planned for the second quarter of 2026 with a budget of €100b.

Clean deal

The EU’s latest moves to accelerate the deployment of clean hydrogen were set out under a major policy initiative called ‘The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation’.

The roadmap called for massive investment in decarbonisation and clean technologies to drive economic growth and restore the EU’s global competitiveness on the world stage, as well as its security.  The EU pitched the new strategy as a response to Europe’s challenges of “rising geopolitical tensions, slow economic growth and technological competition”.

“The Clean Industrial Deal is Europe's business plan to tackle the climate crisis, boost competitiveness, ensure economic resilience and retain talent,” said the Commission’s executive vice-president, Teresa Ribera.

The strategy includes a review of the design of the EU’s Carbon Border Adjustment Mechanism. The commission said it would also urge EU member states to design their tax policies to support clean technologies rather than fossil fuels. “These tax-related measures will be paired with further actions to scale down and phase out fossil fuel subsidies,” the Commission said.

It highlighted the potential to use tax credits to attract investment. Tax credits have been highly effective in drawing investment to the clean hydrogen sector in the US, although the policy has been put under review by the Trump administration.

Colliding strategies?

The EU’s determination to drive growth through investment in decarbonisation and clean technology such as hydrogen comes as the region’s oil and gas majors scale back their global spending on transition technologies and increase spending on oil and gas production as they chase higher returns.

Publication of the EU’s policy document coincided with a strategic re-set by oil and gas major BP. The UK-based company said it would scale down its previously planned investment in transition businesses by over $5b/yr to $1.5–2b/yr. At the same time, it will increase investment in oil and gas by about 20%, to $10b/yr.

BP said its transition investments would be focused on biogas, biofuels and electric vehicle-charging. The strategy would include “limited further projects in hydrogen and carbon capture”.

BP’s move followed similar strategic shifts by European peers Shell and Equinor.

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Author: Stuart Penson