The European Union (EU) is implementing new rules for its Hydrogen Bank to reduce dependency on China for hydrogen technology. The EU aims to prioritize low-carbon hydrogen technology by providing easier connection and access to the existing gas grid, as well as offering discounts on cross-border and injection tariffs. The Hydrogen Bank will hold an auction on December 3, with up to 1.2 billion euros ($1.34 billion) available for hydrogen producers.
To ensure a diversified supply chain and avoid reliance on a single country that may threaten supply security, the EU will introduce “resiliency” terms for producers. These terms require producers to contribute to a diversified supply chain and limit their sourcing of electrolyser parts from China to no more than 25 percent in order to be eligible for the auction.
The EU has expressed concerns about the significant risk of increased dependency on Chinese electrolysers, which are currently responsible for over half of global production. This heavy reliance on imports from China poses a threat to the EU’s security of supply.
EU Commissioner Wopke Hoekstra has emphasized the need for European cybersecurity and safety guarantees in order for companies to receive support. Each project participating in the auction will be required to have a cybersecurity plan in place, ensuring that operational control and data remain within the EU.
Furthermore, source information regarding all original equipment manufacturers must be submitted, including whether foreign subsidies were involved in their manufacturing process.
These new terms aim not only at reducing dependency on Chinese electrolysers but also at preventing unfair competition from subsidized or dumped imports into the EU market. Earlier this year, an investigation conducted by the EU revealed that Chinese electric vehicles were being unfairly subsidized and dumped onto global markets.
The implementation of these rules reflects concerns about protecting European data from falling into non-EU governments’ hands while promoting fair competition within its market.
It is worth noting that China’s ruling Communist Party often mobilizes industries with heavy state financial backing in pursuit of strategic goals.
