EU requires US-style OPEX support to meet green hydrogen generation targets

Targets set by the European Commission (EC) in 2022 aim for 10 million t of the element to be produced from renewables in the EU by 2030 with another 10 million t imported, as part of its agenda to reduce greenhouse gas (GHG) emissions. However, following industry comments that the EU’s complex regulations may impede this progress, the EU is being urged to embrace a broader array of generation-based incentives, similar to those offered by the US Inflation Reduction Act (IRA) to accelerate decarbonisation efforts.

Richard Yu, Director of Business Development, Hydrogen at IMI Critical Engineering, argues: “As a zero-carbon fuel, harnessing green hydrogen is vital for the EU to reach both its more immediate production goals and its long-term target of net zero emissions by 2050. “Existing support packages on offer, including the Green Deal Industrial Plan and RePowerEU, are extremely welcome in their ambition – especially given the uncertainty global geopolitical events have and continue to have on energy markets. However, more needs to be done, and developments in the US, including the IRA and the nation’s first-ever dedicated clean hydrogen strategy and roadmap, offer a clear path that the EU could emulate. For instance, the IRA’s hydrogen production tax credit, which offers up to US$3/kg of hydrogen for each zero-carbon fuel supplied, demonstrates a level of OPEX support not yet apparent in the EU’s plans, which mainly focus on CAPEX measures. For hard-to-abate sectors such as cement, steel, aluminium and chemical, as well as the energy-intensive industrial and heavy transport industries, this will enable a faster transition to green fuel use in line with the roadmap.”

According to Yu, the implementation of US-style support will help offset potential obstacles relating to the current lack of large-scale hydrogen production infrastructure, including hydrogen refilling stations. He cites the development and uptake of decentralised solutions such as the PEM electrolyser technology, assisted by CAPEX and OPEX initiatives, as a vital first step for organisations looking to power their sites sustainably.

Yu said: “A new production tax credit model would further encourage take-up of these technologies across multiple industries and applications. If the EU takes this step, it could supercharge what has already been promising progress. For organisations looking to immediately implement decarbonisation strategies while ensuring energy security for their operations, solutions such as electrolyser technologies may appeal – especially while grid prices, supplies and mixes are in flux.”

Read the article online at: https://www.globalhydrogenreview.com/hydrogen/30062023/eu-requires-us-style-opex-support-to-meet-green-hydrogen-generation-targets/