EXCLUSIVE | 'EU bosses want to stop hydrogen subsidies going to Chinese electrolyser makers, but Germany objects'
Commission wants to introduce ESG rules on H2 equipment, but opposition from Berlin has put such a move on hold, Hydrogen Europe CEO tells Hydrogen Insight
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He said that the accumulated effect of lower labour costs throughout the value chain — from raw materials to electrolyser production — meant that Chinese companies had an unfair advantage, particularly as China was not open to European companies.
Chatzimarkakis agrees with such sentiment.
“So it's not only affecting the electrolyser business or the hydrogen technologies, it's affecting clean tech in general. And if we don't have a U-turn, a 180-degree U-turn situation here by policymakers, we will have a problem.”
The European Commission is due to hold a second, €2.2bn green hydrogen auction next spring, and Chatzimarkakis hopes that the tender rules can be changed by then.
He points out that one Europe-based green steel manufacturer receiving hundreds of millions of euros in state aid, “didn’t buy European electrolysers — they bought Chinese”.
“We asked these guys, members of ours, ‘why are you doing that?’. ‘Price’, they said. ‘If the funding mechanism tells me to go for the cheapest price, then I go’.
“You might have the same thing now because the auction is all about the lowest price… this is something we need to fix.”
Chatzimarkakis, who was previously a German member of the European Parliament, says that he has discussed this issue with European Commission President Ursula von der Leyen and executive vice-president Maroš Šefčovič, who is in charge of the European Green Deal and emissions reduction.
“The good thing is that Šefčovič and von der Leyen understand. They really understand and they want to deliver. The problem is with some member states,” he says, before singling out Germany.
“[They say] we need to abide by the rules of the WTO [World Trade Organization], or otherwise retaliation will come we won’t have access to Chinese markets. But we don’t have access to those markets [now]. They [the Chinese] don’t abide by these [WTO] rules. They have their mechanisms to do whatever they want. And we are stupidly still believing naively in [WTO fairness]. That needs to stop. That needs to stop immediately.”
Both Chatzimarkakis and European electrolyser makers believe that it is possible to abide by WTO rules and protect European electrolyser makers at the same time — by creating ESG [environmental, social, governance] rules around equipment purchasing.
For Chatzimarkakis, such “quality criteria” are essential, with Chinese companies required to provide ESG information that is signed off by non-Chinese auditors.
“The point is you need to find a smart, but simple and quick way to solve this problem. And I think to have an audit on ESG elements that needs to push the burden to the non-European OEMs, because the Europeans supposedly abide by these rules.
“This is what the Chinese do with other things. So it’s bureaucracy for them, not for us. Simple.”