EU hydrogen bureaucracy is slowing down project development — putting H2 targets at risk, say producers
Europe is ‘world-class’ at making subsidy and compliance as difficult as possible, says Uniper, as Orsted and Thyssenkrupp Nucera heap praise on US model
Hydrogen: hype, hope and the hard truths around its role in the energy transition
Executives from electrolyser maker Thyssenkrup Nucera, wind developer and green methanol maker Orsted, and hydrogen producer Uniper, also heaped praise on the US hub model — backed by $8bn of financial support — and called for EU regulators to emulate a swift and simple “ecosystem” approach to subsidies.
“Somehow in Europe we are world-class [at making] it really difficult for both customers and producers,” said Axel Wietfeld, chief executive of Uniper’s hydrogen business. “Our experience is that the application process [for funding] takes so long.
“Once you have won funding... it easily takes two years and involves an entire team to answer all the questions by the relevant authorities and that’s just far too complex. We are too slow.”
“Then ,of course, there is [customer] hesitation and it all translates into the business model, which is not yet economically viable.”
This sluggish bureaucracy is having a material impact on project timelines, said Werner Ponikwar, CEO of Thyssenkrupp Nucera.
“Even applying for funding takes a year before you can be granted the funding, and then you have many years of discussion afterwards [before] you can even start thinking about how to nail the whole thing,” he told the Rotterdam audience. “These are the things that are keeping us from putting things in the ground and walking the talk.”
“2030 is seven years from where we are now; this is quite a challenge,” he warned, noting that supply, demand and midstream infrastructure all have to ramp up at the same time — something that the US has tackled head on with its hydrogen hub model.
“We do need to pick up speed and I do believe the regulatory framework and incentive schemes need to support us all in developing those ecosystems faster,” he said. “We need to look at [this and ask], ‘is this working?’”
However, much of this funding is for research and development, and for projects located throughout Europe.
“[This] is something that the US is doing very well,” she said. “In addition to the IRA [Inflation Reduction Act, which offers tax credits of up to $3/kg for clean hydrogen producers] they are deliberately incentivising ecosystems, whether that’s distribution or transmission or electrolyser manufacturers to set up, it is a very proactive choice to identify six, eight hubs around the US and to form ecosystems around them.”
“[It enables] in particular, demand — to have that certainty that all the jigsaw puzzles are going together at the same pace so precisely everything can come together. That idea of cohesive funding across is very supportive and useful,” she said.
But Uniper’s Wietfield was firm that that European producers should make the best of the EU’s financial incentives as they are now — and work to speed up compliance in the background.
“We should stop complaining now and grab the pieces and make it work,” he said. “But definitely this is something we have to change. What is for me something difficult to understand is that we are all on the same page. I haven’t heard a single policymaker not agreeing to this topic for about two years. But nevertheless we are not able to move the needle.”
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