The European Commission will outline plans on March 16 for a hydrogen subsidy scheme that would make clean versions of the fuel more competitive with fossil fuel-based hydrogen, a draft document showed.
EU industries use about 8 million tonnes of hydrogen, but the vast majority of that is produced using gas in a process that emits planet-heating CO2. The EU wants to switch to CO2-free hydrogen produced from renewable electricity to cut industry emissions.
The EU will launch a hydrogen funding "bank", consisting of auctions to award a fixed premium to hydrogen producers per kilogram of hydrogen for up to 10 years, according to a draft document seen by Reuters and which is due to be published on March 16.
The first auction this year would offer around 800 million euros. The payments will be made once the hydrogen has been produced. To apply, projects would need proof that they have an interested buyer and a renewable energy supply to power the production site.
"The goal of the bank is to reduce the cost gap to a level that private off-takers are willing and able to cover," the draft said.
Governments will also be able to put national funding into the EU auctions to increase the budget for projects in their own countries, so that if projects miss out on the EU funding, they can still receive this state aid.
The EU wants to produce 10 million tonnes of renewable hydrogen and import another 10 million by 2030. It currently produces less than 0.3 million tonnes of hydrogen from electricity, the draft said.
Hitting those targets would require massive investments to expand Europe's tiny fleet of electrolysers — the equipment used to produce hydrogen from electricity — and install 150 GW to 210 GW of new renewable energy capacity to power them.
That investment could cost up to 471 billion euros ($500 billion), the draft said — most of it expected to come from the private sector.
Recommended Reading
New Permian Math: Vital Energy and 42 Horseshoe Wells
2024-05-10 - Vital Energy anticipates making 42 double-long, horseshoe-shaped wells where straight lines would have made 84 wells. The estimated savings: $140 million.
SM Energy Targets Prolific Dean in New Northern Midland Play
2024-05-09 - KeyBanc Capital Markets reports SM Energy’s wells “measure up well to anything being drilled in the Midland Basin by anybody today.”
Vår Selling Norne Assets to DNO
2024-05-08 - In exchange for Vår’s producing assets in the Norwegian Sea, DNO is paying $51 million and transferring to Vår its 22.6% interest in the Ringhorne East unit in the North Sea.
Crescent Energy: Bigger Uinta Frac Now Making 60% More Boe
2024-05-10 - Crescent Energy also reported companywide growth in D&C speeds, while well costs have declined 10%.
SLB OneSubsea JV to Kickstart North Sea Development
2024-05-07 - SLB OneSubsea, a joint venture including SLB and Subsea7, have been awarded a contract by OKEA that will develop the Bestla Project offshore Norway.