European Union Sets Stricter Criteria For Hydrogen Projects To Counter Chinese Competition

The European Union is introducing stricter regulations to ensure that funding for hydrogen projects primarily benefits European companies. This move comes in response to concerns from local industries about competition from cheaper Chinese imports.

Motivation Behind the New Measures

EU Climate Commissioner Wopke Hoekstra announced on Monday that these measures are being implemented after European industries expressed worries over the impact of low-cost Chinese products. The EU is preparing to launch its latest funding round for green hydrogen projects, aiming to boost local production of this clean fuel.

Concerns from European Manufacturers

European producers of electrolysers—machines that split water into hydrogen and oxygen using electricity—have raised alarms about their inability to compete with cheaper Chinese alternatives. They are urging the EU to incorporate criteria into its Hydrogen Bank funding scheme that would prioritize local companies.

EU’s Tougher Stance on Green Technologies

In addition to hydrogen, the EU is also adopting a firmer position on other green technologies from China. This includes imposing tariffs on electric vehicles, which are perceived to benefit from excessive subsidies.

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Reassurances from Wopke Hoekstra

Hoekstra assured that the upcoming funding auctions will include explicit criteria to support the development of European electrolyser supply chains. He emphasized that European cybersecurity, safety, and data protection are crucial for companies seeking EU support. While Europe is competitive in electrolyser manufacturing, the influx of low-priced Chinese equipment poses a challenge.

Funding Plans and Sourcing Trends

A recent Commission document revealed that about a quarter of the projects seeking EU funds intended to source their electrolysers from outside the EU, with another quarter planning to use a combination of EU and non-EU equipment.

Details Still in Development

Hoekstra did not clarify whether the new rules would exclude projects using foreign equipment from receiving EU subsidies. According to an EU official, the criteria are still being finalized. In April, the EU allocated 720 million euros to seven hydrogen projects. Industry sources suggested that some successful bids might involve cheaper Chinese equipment, although the Commission has not confirmed this.

EU’s Approach to China

Hoekstra emphasized that the EU does not intend to sever ties with China but will act against what it considers unfair competition.

(Includes inputs from online sources)

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