EU auditors slam ‘politically driven’ 2030 hydrogen targets

2 months ago 6

The European Court of Auditors has criticised the European Commission for setting unachievable hydrogen production and import targets for 2030, while praising its swift adoption of the market rulebook, in a new report published on Wednesday (17 July).

In 2020, the EU adopted one of the world’s first hydrogen strategies. Later, when Russia attacked Ukraine in 2022, the bloc bet on the gaseous fuel to replace gas flows from the Kremlin, setting a target of 10 million tonnes of production and 10 million tonnes of imports by 2030.

“Four years after the publication of the hydrogen strategy, we are calling for a reality check,” Stef Bloc, a member of the European Court of Auditors tasked with producing a new report on hydrogen, told journalists in a briefing ahead of the report’s launch.

The auditors’ comprehensive report on EU hydrogen policy paints a mixed picture of a bloc that has adopted the appropriate legislation to ramp up the hydrogen market – but has also set excessive “political” targets for production and imports.

“Based on the available information from member states and industry, the EU is unlikely to meet them by 2030,” Bloc said. The report said that the targets were “driven by political will rather than being based on robust analyses.”

The auditors also found that the EU is not spending its money wisely, with the report stating that the Commission “does not have complete data on allocated or planned national public funding”, while the €18.8 billion to be disbursed by Brussels in the 2021-2027 period is “scattered over several programmes with different funding rules.”

“This makes it difficult for hydrogen project developers to determine which programme is best suited to their project,” the report adds.

The Berlaymont’s work on new rules for the future hydrogen market received high marks, with Bloc saying the Commission “deserves credit for its work on the renewable hydrogen legal framework.”

This positive feedback comes with a caveat: the multi-year delay in adopting the “additionality” delegated act, which sets standards for ‘renewable hydrogen’ – the most climate-friendly type – had created market uncertainty and spooked investors.

The “uncertainty created by the absence of this crucial Delegated Act was one of the main reasons that project developers were holding off before making their final investment decisions,” according to the auditors.

The framework was adopted “quickly and robustly,” said Jorgo Chatzimarkakis, CEO of industry association Hydrogen Europe.

However, “the accompanying measures, in particular the delegated act for the definition of renewable hydrogen, take too long and are too complex,” Chatzimarkakis added.

More to come

Commenting on the report prior to its publication, the European Commission said, “Our work is far from finished.”

The next step is to speed up the “deployment and uptake” of hydrogen, both low-carbon and renewable, in Europe, the EU’s executive body added.

Echoing similar sentiments, the auditors have advised the EU to “update its Hydrogen Strategy based on a careful assessment” of “market incentives for renewable and low-carbon hydrogen” as well as “scarce EU funding” and the “geopolitical implications of EU production compared to imports.”

This means “updating” the hydrogen targets “so that they are ambitious but realistic,” the report also writes.

[Edited by Donagh Cagney/Daniel Eck]