The EU is looking at new rules to prevent Chinese firms benefitting from hydrogen project subsidies aimed at boosting European firms’ chances to compete with their state-backed rivals.
The European Commission is working on tighter curbs after local industries raised concerns over cheap Chinese imports, the bloc’s head of climate change policy said on Monday.
Brussels will this month launch its next round of funding for green hydrogen projects, as it attempts to kick-start a local industry to produce the fuel.
Meanwhile, the EU is hardening its stance on other green technologies from China, imposing tariffs on electric vehicles which it says benefit from excessive subsidies.
European manufacturers of electrolysers, machines that use electricity to split water to produce hydrogen, have warned they cannot compete with cheaper Chinese producers.
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They want the EU to protect them by adding criteria that would favour local firms to its Hydrogen Bank funding scheme, something climate commissioner Wopke Hoekstra said the bloc’s executive was now working on.
“The next auction will be different. We will have explicit criteria to build European electrolyser supply chains,” Hoekstra said in a speech at the Eindhoven University of Technology in the Netherlands.
Hoekstra said the planned hydrogen subsidy criteria, while not yet final, could include requirements for work to be done inside Europe, or setting a limit on projects’ dependence on non-EU countries.
The EU awarded 720 million euros to seven EU hydrogen projects in April. At the time, industry sources told Reuters the low-priced bids from some successful projects indicated that they would be using cheaper Chinese equipment.
The Commission has not disclosed if this is the case.
A Commission document, seen by Reuters, showed around a quarter of the projects that bid for the funding planned to source their electrolysers from outside the EU. Nearly another quarter planned to use a mix of EU and non-EU made equipment.
Hoekstra said the EU was not aiming to cut ties with China, but would take action where it deemed competition to be unfair.
- Reuters with additional editing by Sean O’Meara
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