COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A hydrogen strategy for a climate-neutral Europe
Date: 2020-07-08
Institutions: Directorate-General for Energy, European Commission
Subjects: EU investment, EU strategy, clean technology, energy cooperation, fuel cell, hydrogen, innovation, reduction of gas emissions, renewable energy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 8.7.2020  COM(2020) 301 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A hydrogen strategy for a climate-neutral Europe  
 
 
1. 

INTRODUCTION – WHY WE NEED A STRATEGIC ROAD MAP FOR HYDROGEN 

Hydrogen  is  enjoying  a  renewed  and  rapidly  growing  attention  in  Europe  and  around  the 
world. Hydrogen can be used as a feedstock, a fuel or an energy carrier and storage, and has 
many  possible  applications  across  industry,  transport,  power  and  buildings  sectors.  Most 
importantly,  it  does  not  emit  CO2  and  almost  no  air  pollution  when  used.  It  thus  offers  a 
solution  to  decarbonise  industrial  processes  and  economic  sectors  where  reducing  carbon 
emissions is both urgent and hard to achieve. All this makes hydrogen essential to support the 
EU’s commitment to reach carbon neutrality by 2050 and for the global effort to implement 
the Paris Agreement while working towards zero pollution. 

Yet,  today,  hydrogen  represents  a  modest  fraction  of  the  global  and  EU  energy  mix,  and  is 
still largely produced from fossil fuels1, notably from natural gas or from coal, resulting in the 
release  of  70  to  100  million  tonnes  CO2  annually  in  the  EU.  For  hydrogen  to  contribute  to 
climate neutrality, it needs to achieve a far larger scale and its production must become fully 
decarbonised.  

In the past, there have been peaks of interest in hydrogen, but it did not take off. Today, the 
rapid  cost  decline  of  renewable  energy,  technological  developments  and  the  urgency  to 
drastically reduce greenhouse emissions, are opening up new possibilities. 

Many indicators signal that we are now close to a tipping point. Every week new investment 
plans  are  announced,  often  at  a  gigawatt  scale.  Between  November  2019  and  March  2020, 
market analysts increased the list of planned global investments from 3,2 GW to 8,2 GW of 
electrolysers  by  2030  (of  which  57%  in  Europe)2  and  the  number  of  companies  joining  the 
International Hydrogen Council has grown from 13 in 2017 to 81 today.  

There are many reasons why hydrogen is a key priority to achieve the European Green Deal 
and Europe’s clean energy transition. Renewable electricity is expected to decarbonise a large 
share  of  the  EU  energy  consumption  by  2050,  but  not  all  of  it.  Hydrogen  has  a  strong 
potential  to  bridge  some  of  this  gap,  as  a  vector  for  renewable  energy  storage,  alongside 
batteries,  and  transport,  ensuring  back  up  for  seasonal  variations  and  connecting  production 
locations  to  more  distant  demand  centres.  In  its  strategic  vision  for  a  climate-neutral  EU 
published in November 20183, the share of hydrogen in Europe’s energy mix is projected to 
grow from the current less than 2%4 to 13-14% by 20505.  

Furthermore, hydrogen can replace fossil fuels in some carbon intensive industrial processes, 
such  as  in  the  steel  or  chemical  sectors,  lowering  greenhouse  gas  emissions  and  further 
strengthening  global  competitiveness  for  those  industries.  It  can  offer  solutions  for  hard  to 
abate parts of the transport system, in addition to what can be achieved through electrification 
and  other  renewable  and  low-carbon  fuels.  A  progressive  uptake  of  hydrogen  solutions  can 

1  Within the EU, the currently operating 300 electrolyses produce less than 4% of total hydrogen production -

Fuel Cells and Hydrogen Joint Undertaking, 2019, Hydrogen Roadmap Europe. 

2    Wood Mackenzie, Green hydrogen pipeline more than doubles in five months, April 2020.   
3  A Clean Planet for All. A European strategic long-term vision for a prosperous, modern, competitive and 

climate neutral economy, COM(2018) 773. 

4  FCH JU (2019) Hydrogen Roadmap Europe. This includes the use of hydrogen as feedstock. 
5    Considering hydrogen consumption for energy purposes only, the shares in different scenarios range from 

less than 2% to more than 23% in 2050 (Moya et al. 2019, JRC116452). 

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also lead to repurposing or re-using parts of the existing natural gas infrastructure, helping to 
avoid stranded assets in pipelines.  

In the integrated energy system of the future hydrogen will  play a role, alongside renewable 
electrification and a more efficient and circular use of resources.  Large-scale deployment of 
clean hydrogen at a fast pace is key for the EU to achieve a higher climate ambition, reducing 
greenhouse  gas  emissions  by  minimum  50%  and  towards  55%  by  2030,  in  a  cost  effective 
way.  

Investment in hydrogen will foster sustainable growth and jobs, which will be critical in the 
context of recovery from the COVID-19 crisis. The Commission’s recovery plan6 highlights 
the  need  to  unlock  investment  in  key  clean  technologies  and  value  chains.  It  stresses  clean 
hydrogen as one of the essential areas to address in the context of the energy transition, and 
mentions a number of possible avenues to support it.   

Moreover, Europe is highly competitive in clean hydrogen technologies manufacturing and is 
well positioned to benefit from a global development of clean hydrogen as an energy carrier. 
Cumulative  investments  in  renewable  hydrogen  in  Europe  could  be  up  to  EUR  180-470 
billion  by  20507,  and  in  the  range  of  €3-18  billion  for  low-carbon  fossil-based  hydrogen. 
Combined  with  EU’s  leadership  in  renewables  technologies,  the  emergence  of  a  hydrogen 
value chain serving a multitude of industrial sectors and other end uses could employ up to 1 
million people, directly or indirectly8. Analysts estimate that clean hydrogen could meet 24% 
of energy world demand by 2050, with annual sales in the range of €630 billion9.  

However, today renewable and low-carbon hydrogen are not yet cost competitive compared to 
fossil-based  hydrogen.  To  harness  all  the  opportunities  associated  with  hydrogen,  the 
European  Union  needs  a  strategic  approach.  EU  industry  is  rising  to  the  challenge  and  has 
developed  an  ambitious  plan  to  reach  2x40  GW  of  electrolysers  by  203010.  Almost  all 
Member States have included plans for clean hydrogen in their National Energy and Climate 
Plans, 26 have signed up to the “Hydrogen Initiative”11, and 14 Member States have included 
hydrogen in the context of their alternative fuels infrastructure national policy frameworks12. 
Some have already adopted national strategies or are in the process of adopting one.  

However,  deploying  hydrogen  in  Europe  faces  important  challenges  that  neither  the  private 
sector nor Member States can address alone. Driving hydrogen development past the tipping 
point needs critical mass in investment, an enabling regulatory framework, new lead markets, 
sustained  research  and  innovation  into  breakthrough  technologies  and  for  bringing  new 
solutions  to the market, a large-scale  infrastructure network that only the EU  and the single 
market can offer, and cooperation with our third country partners.  

6 
7 

‘Europe's moment: Repair and Prepare for the Next Generation’, COM(2020) 456 final.  
IRENA estimates that to achieve the Paris agreement around 8% of global energy consumption will be 
provided by hydrogen (IRENA, Global Renewables Outlook, 2020). 

8   FCH JU (2019) Hydrogen Roadmap Europe. Based on the ambitious scenario of 20 MT (665 TWh) of 

hydrogen consumption. 

9  BNEF (2020) Hydrogen Economy Outlook. Expected sales of USD 696 billion (2019 dollars). 
10  40 GW in Europe and 40 GW in Europe’s neighbourhood with export to the EU. 
11  Linz declaration, 17-18 September 2018. https://www.eu2018.at/calendar-events/political-events/BMNT-

2018-09-17-Informal-TTE.html. 

12   Submitted under Directive 2014/94/EU. 

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All actors, public and private, at European national and regional level13, must work together, 
across the entire value chain, to build a dynamic hydrogen ecosystem in Europe.  

In  order  to  implement  the  ambition  of  the  European  Green  Deal14  and  building  on  the 
this 
Commission’s  New  Industrial  Strategy 
Communication sets out a vision of how the EU can turn clean hydrogen into a viable solution 
to  decarbonise  different  sectors  over  time,  installing  at  least  6  GW  of  renewable  hydrogen 
electrolysers  in  the  EU  by  2024  and  40  GW  of  renewable  hydrogen  electrolysers  by  2030. 
This Communication identifies the challenges to overcome, lays out the levers that the EU can 
mobilise and presents a roadmap of actions for the coming years.  

for  Europe15  and 

its  recovery  plan16, 

As investment cycles in the clean energy sector run for about 25 years, the time to act is now.  
This  strategic  roadmap  provides  a  concrete  policy  framework  within  which  the  European 
Clean  Hydrogen  Alliance  -  building  on  the  success  of  the  European  Battery  Alliance17  -  a 
collaboration between public authorities, industry and civil society, formally launched today, 
will  develop  an  investment  agenda  and  a  pipeline  of  concrete  projects.  It  complements  the 
Strategy for Energy System Integration18, presented at the same time, which describes how 
the ongoing work streams of EU energy policy, including hydrogen development, will foster a 
climate neutral integrated energy system with renewable electricity, circularity and renewable 
and  low-carbon  fuels  at  its  core.  Both  strategies  contribute  towards  the  achievement  of  the 
Sustainable Development Goals and the objectives of the Paris Agreement. 

2.  TOWARDS A HYDROGEN ECOSYSTEM IN EUROPE: A ROADMAP TO 2050 

The  different  ways  to  produce  hydrogen,  their  greenhouse  gas  emissions  and  their  relative 
competitiveness 

Hydrogen  may  be  produced  through  a  variety  of  processes.  These  production  pathways  are 
associated  with  a  wide  range  of  emissions,  depending  on  the  technology  and  energy  source 
used and have different costs implications and material requirements. In this Communication:  

- 

- 

‘Electricity-based  hydrogen’  refers  to  hydrogen  produced  through  the  electrolysis  of 
water (in an electrolyser, powered by electricity), regardless of the electricity source. The 
full  life-cycle  greenhouse  gas  emissions  of  the  production  of  electricity-based  hydrogen 
depends on how the electricity is produced19. 
‘Renewable  hydrogen’  is  hydrogen  produced  through  the  electrolysis  of  water  (in  an 
electrolyser,  powered  by  electricity),  and  with  the  electricity  stemming  from  renewable 
sources.  The  full  life-cycle  greenhouse  gas  emissions  of  the  production  of  renewable 

13   European Committee of the Regions, Towards a Roadmap for Clean Hydrogen- the contribution of local and 

regional authorities to a climate-neutral Europe. 

14  COM(2019) 640 final. 
15  COM(2020) 102 final. 
16  ‘Europe's moment: Repair and Prepare for the Next Generation’, COM(2020) 456 final.  
17   https://ec.europa.eu/growth/industry/policy/european-battery-alliance_en 
18   COM(2020) 299 final. 
19  The well-to-gate greenhouse gas emissions for the EU electricity mix are 14 kgCO2eq/kgH2 (based on 2018 

EUROSTAT data, 252 t CO2eq/GWh), while the world’s average electricity mix would result in 26 
kgCO2eq/kgH2 (IEA, 2019).  

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hydrogen  are  close  to  zero20.  Renewable  hydrogen  may  also  be  produced  through  the 
reforming of biogas (instead of natural gas) or biochemical conversion of biomass21, if in 
compliance with sustainability requirements. 
‘Clean hydrogen’ refers to renewable hydrogen. 
‘Fossil-based  hydrogen’  refers  to  hydrogen  produced  through  a  variety  of  processes 
using fossil fuels as feedstock, mainly the reforming of natural gas or the gasification of 
coal. This represents the bulk of hydrogen produced today. The life-cycle greenhouse gas 
emissions of the production of fossil-based hydrogen are high22.  
‘Fossil-based hydrogen with carbon capture’ is a subpart of fossil-based hydrogen, but 
where greenhouse gases emitted as part of the hydrogen production process are captured. 
The  greenhouse  gas  emissions  of  the  production  of  fossil-based  hydrogen  with  carbon 
capture  or  pyrolysis  are  lower  than  for  fossil-fuel  based  hydrogen,  but  the  variable 
effectiveness of greenhouse gas capture (maximum 90%) needs to be taken into account23. 
‘Low-carbon  hydrogen’  encompasses  fossil-based  hydrogen  with  carbon  capture  and 
electricity-based  hydrogen,  with  significantly  reduced  full  life-cycle  greenhouse  gas 
emissions compared to existing hydrogen production.  
‘Hydrogen-derived synthetic fuels’ refer to a variety of gaseous and liquid fuels on the 
basis  of  hydrogen  and  carbon.  For  synthetic  fuels  to  be  considered  renewable,  the 
hydrogen  part  of  the  syngas  should  be  renewable.  Synthetic  fuels  include  for  instance 
synthetic kerosene in aviation, synthetic diesel for cars, and various molecules used in the 
production  of  chemicals  and  fertilisers.  Synthetic  fuels  can  be  associated  with  very 
different levels of greenhouse gas emissions depending on the feedstock and process used. 
In  terms  of  air  pollution,  burning  synthetic  fuels  produces  similar  levels  of  air  pollutant 
emissions than fossil fuels. 

Today, neither renewable hydrogen nor low-carbon hydrogen, notably fossil-based hydrogen 
with  carbon  capture,  are  cost-competitive  against  fossil-based  hydrogen.  Estimated  costs 
today for fossil-based hydrogen are around 1.5 €/kg for the EU, highly dependent on natural 
gas prices, and disregarding the cost of CO2. Estimated costs today for fossil-based hydrogen 
with  carbon  capture  and  storage  are  around  2  €/kg,  and  renewable  hydrogen  2.5-5.5  €/kg24. 
Carbon prices in the range of EUR 55-90 per tonne of CO2 would be needed to make fossil-
based  hydrogen  with  carbon  capture  competitive  with  fossil-based  hydrogen  today25.  Costs 
for renewable hydrogen are going down quickly. Electrolyser costs have already been reduced 
by  60%  in  the  last  ten  years,  and  are  expected  to  halve  in  2030  compared  to  today  with 
economies  of  scale.26  In  regions  where  renewable  electricity  is  cheap,  electrolysers  are 

20  The well-to-gate greenhouse gas emissions for renewable hydrogen from renewable electricity are close to 

zero (IEA, 2019). 

22  Ongoing Commission assessment of the EU and global biomass supply and demand and related sustainability 
and a planned study announced in the EU Biodiversity Strategy (COM(2020) 380 final) on sustainability of 
the use of forest biomass for energy production. 

22  The well-to-gate greenhouse gas emissions of steam reforming of natural gas are 9 kgCO2eq/kgH2 (IEA, 

2019). 

23  The well-to-gate greenhouse gas emissions of steam reforming of natural gas with CCS with 90% capture is 

1 kgCO2eq/kgH2, and  4 kgCO2eq/kgH2 with a capture rate of 56% (IEA, 2019) 

24   IEA 2019 Hydrogen report (page 42), and based on IEA assumed natural gas prices for the EU of 22 €/MWh, 

electricity prices between 35-87 €//MWh, and capacity costs of €600/kW.  

25   However, at this stage, costs can be only estimated given that no such project has started construction or 

operation in the EU today. 

26  Based on cost assessments of IEA, IRENA and BNEF. Electrolyser costs to decline from €900/kW to 

€450/KW or less in the period after 2030, and €180/kW after 2040. Costs of CCS increases the costs of 

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expected to be able to compete with fossil-based hydrogen in 203027. These elements will be 
key drivers of the progressive development of hydrogen across the EU economy.   

A roadmap for the EU 

The  priority  for  the  EU  is  to  develop  renewable  hydrogen,  produced  using  mainly  wind 
and solar energy. Renewable hydrogen is the most compatible option with the EU’s climate 
neutrality  and zero pollution goal in the long term and the most coherent with an integrated 
energy system. The choice for renewable hydrogen builds on European industrial strength in 
electrolyser production, will create new jobs and economic growth within the EU and support 
a  cost-effective  integrated  energy  system.  On  the  way  to  2050,  renewable  hydrogen  should 
progressively  be  deployed  at  large  scale  alongside  the  roll-out  of  new  renewable  power 
generation, as technology matures and the costs of its production technologies decrease. This 
process must be initiated now.  

In  the  short  and  medium  term,  however,  other  forms  of  low-carbon  hydrogen  are 
needed, primarily to rapidly reduce emissions from existing hydrogen production and support 
the parallel and future uptake of renewable hydrogen.  

The  hydrogen  ecosystem  in  Europe  is  likely  to  develop  through  a  gradual  trajectory,  at 
different  speeds  across  sectors  and  possibly  across  regions  and  requiring  different  policy 
solutions. 

In the first phase, from 2020 up to 2024, the strategic objective is to install at least 6 GW 
of  renewable  hydrogen  electrolysers  in  the  EU  and  the  production  of  up  to  1  million 
tonnes  of  renewable  hydrogen28,  to  decarbonise  existing  hydrogen  production,  e.g.  in  the 
chemical sector and facilitating take up of hydrogen consumption in new end-use applications 
such as other industrial processes and possibly in heavy-duty transport.   

In this phase, manufacturing of electrolysers, including large ones (up to 100 MW), needs to 
be scaled up. These electrolysers could be installed next to existing demand centres in larger 
refineries, steel plants, and chemical complexes. They would ideally be powered directly from 
local  renewable  electricity  sources.  In  addition,  hydrogen  refuelling  stations  will  be  needed 
for the uptake of hydrogen fuel-cell buses and at a later stage trucks. Electrolysers will thus 
also  be  needed  to  locally  supply  an  increasing  number  of  hydrogen  refuelling  stations. 
Different  forms  of  low-carbon  electricity-based  hydrogen,  especially  those  produced  with 
near zero greenhouse gas emissions, will contribute to scale up production and the market for 
hydrogen.  Some  of  the  existing  hydrogen  production  plants  should  be  decarbonised  by 
retrofitting them with carbon capture and storage technologies.  

Infrastructure  needs  for  transporting  hydrogen  will  remain  limited  as  demand  will  be  met 
initially  by  production  close  or  on  site  and  in  certain  areas  blending  with  natural  gas  might 

natural gas reforming from €810/kWh2 to €1512/kWh2. For 2050, the costs are estimated to be €1152/kWh2 
(IEA, 2019). 

27  Assuming current electricity and gas prices, low-carbon fossil-based hydrogen is projected to cost in 2030 
between €2-2.5/kg in the EU, and renewable hydrogen are projected to cost between €1.1-2.4/kg (IEA, 
IRENA, BNEF). 

28   Up to 33 TWh of renewable hydrogen could be produced by either directly connecting renewable electricity 

to the electrolysers, or by ensuring that certain conditions are met, including the additionally of the renewable 
electricity used. 

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occur, but planning of medium range and backbone transmission infrastructure should begin. 
Infrastructure for carbon capture and use of CO2 will be required to facilitate certain forms of 
low-carbon hydrogen. 

The  policy  focus  will  be  on  laying  down  the  regulatory  framework  for  a  liquid  and  well-
functioning hydrogen market  and  on incentivising both supply and demand in lead markets, 
including  through  bridging  the  cost  gap  between  conventional  solutions  and  renewable  and 
low-carbon hydrogen and through appropriate State aid rules. Enabling framework conditions 
will push concrete plans for large wind and solar plants dedicated to gigawatt-scale renewable 
hydrogen production before 2030. 

The European Clean Hydrogen Alliance will help build up a robust pipeline of investments. 
As  part  of  the  Commission’s  recovery  plan,  funding  instruments  of  Next  Generation  EU, 
including  the  Strategic  European  Investment  Window  of  the  InvestEU  programme  and  the 
ETS  Innovation Fund, will enhance the funding support and help bridge the investment  gap 
for renewables generated by the COVID-19 crisis.  

In  a  second  phase,  from  2025  to  2030,  hydrogen  needs  to  become  an  intrinsic  part  of  an 
integrated energy system with a strategic objective to install at least 40 GW of renewable 
hydrogen electrolysers by 2030 and the production of up to 10 million tonnes of renewable 
hydrogen in the EU29.  

In  this  phase,  renewable  hydrogen  is  expected  to  gradually  become  cost-competitive  with 
other  forms  of  hydrogen  production,  but  dedicated  demand  side  policies  will  be  needed  for 
industrial demand to gradually include new applications, including steel-making, trucks, rail 
and  some  maritime  transport  applications,  and  other  transport  modes.  Renewable  hydrogen 
will start playing a role in balancing a renewables-based electricity system by transforming 
electricity into hydrogen when renewable electricity is abundant and cheap and by providing 
flexibility. Hydrogen will also be used for daily or seasonal storage, as a backup and provide 
buffering functions30, enhancing security of supply in the medium term.  

Additionally, the further retrofitting of existing fossil-based hydrogen production with carbon 
capture should continue to reduce greenhouse gas and other air pollutant emissions in view of 
the increased 2030 climate ambition. 

Local hydrogen clusters, such as remote areas or islands, or regional ecosystems – so-called 
“Hydrogen  Valleys”  –  will  develop,  relying  on  local  production  of  hydrogen  based  on 
decentralised  renewable  energy  production  and  local  demand,  transported  over  short 
distances.  In  such  cases,  a  dedicated  hydrogen  infrastructure  can  use  hydrogen  not  only  for 
industrial  and  transport  applications,  and  electricity  balancing,  but  also  for  the  provision  of 
heat for residential and commercial buildings31.  

29   Up to 333 TWh of renewable hydrogen could be produced by either directly connecting renewable electricity 
to the electrolysers, or by ensuring that certain conditions are met, including the additionally of the renewable 
electricity used. 

30  Energy buffering realized through renewable hydrogen is a function very much beyond the renewable 

electricity storage. Buffering makes energy available across different regions via hydrogen transportation and 
hydrogen stocking facilities. Hydrogen buffering may interlink different end-use sectors and energy markets 
(as opposed to electricity storage) and it could allow to re-price energy in specific hydrogen markets. 
31  Pilot projects are ongoing to analyse the potential to replace natural gas boilers with hydrogen boilers. 

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In this phase, the need for an EU-wide logistical infrastructure will emerge, and steps will be 
taken  to  transport  hydrogen  from  areas  with  large  renewable  potential  to  demand  centres 
located possibly in other Member States. The back-bone of a pan-European grid will need to 
be planned and a network of hydrogen refuelling stations to be established. The existing gas 
grid  could  be  partially  repurposed  for  the  transport  of  renewable  hydrogen  over  longer 
distances  and  the  development  of  larger-scale  hydrogen  storage  facilities  would  become 
necessary.  International  trade  can  also  develop,  in  particular  with  the  EU’s  neighbouring 
countries in Eastern Europe and in the Southern and Eastern Mediterranean countries.  

In terms of policy focus, such a sustained scale up over a relatively short period will require 
gearing  up  EU’s  support  and  stimulate  investments  to  build  a  fully-fledged  hydrogen 
ecosystem.  By  2030  the  EU  will  aim  at  completing  an  open  and  competitive  EU  hydrogen 
market, with unhindered cross-border trade and efficient allocation of hydrogen supply among 
sectors.  

In  a  third  phase,  from  2030  onwards  and  towards  2050,  renewable  hydrogen 
technologies should reach maturity and be deployed at large scale to reach all hard-to-
decarbonise sectors where other alternatives might not be feasible or have higher costs.  

In  this  phase,  renewable  electricity  production  needs  to  massively  increase  as  about  a 
quarter32 of renewable electricity might be used for renewable hydrogen production by 2050.  

In  particular,  hydrogen  and  hydrogen-derived  synthetic  fuels,  based  on  carbon  neutral  CO2, 
could  penetrate more largely  across a  wider range of sectors of the economy, from  aviation 
and shipping to hard-to-decarbonise industrial and commercial buildings. Sustainable biogas 
may  also  have  a  role  in  replacing  natural  gas  in  hydrogen  production  facilities  with  carbon 
capture and storage to create negative emissions, at the condition that biomethane leakage is 
avoided  and  only  in  line  with  the  biodiversity  objectives  and  the  principles  stated  in  the 
EU2030 Biodiversity Strategy33.  

3. 

 AN INVESTMENT AGENDA FOR THE EU 

Achieving the deployment goals outlined in this strategic roadmap by 2024 and 2030 requires 
a  strong  investment  agenda  exploiting  synergies  and  ensuring  coherence  of  public  support 
across the different EU funds and EIB financing, harnessing the leverage effect and avoiding 
excessive support.  

From now to 2030, investments in electrolysers could range between €24 and €42 billion. In 
addition,  over the same  period, €220-340 billion would be required to  scale up and directly 
connect  80-120  GW  of  solar  and  wind  energy  production  capacity  to  the  electrolysers  to 
provide  the  necessary  electricity.  Investments  in  retrofitting  half  of  the  existing  plants  with 
carbon  capture  and  storage  are  estimated  at  around  €11  billion.  In  addition,  investments  of 
€65  billion  will  be  needed  for  hydrogen  transport,  distribution  and  storage,  and  hydrogen 

32   Assuming all renewable hydrogen would be produced by renewable electricity. Based on the 1.5 TECH long-

term decarbonisation scenario COM(2018) 773 final). 

33   COM(2020) 380 final. 

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refuelling stations34. From now to 2050, investments in production capacities would amount 
to €180-470 billion in the EU35.  

Finally,  adapting  end-use  sectors  to  hydrogen  consumption  and  hydrogen-based  fuels  will 
also require significant investments. For instance, it takes some €160-200 million to convert a 
typical  EU steel  installation coming to  end-of-life to  hydrogen.  In the  road  transport sector, 
rolling out an additional 400 small-scale hydrogen refuelling stations (compared to 100 today) 
could require investments of €850-1000 million36. 

To  support  these  investments  and  the  emergence  of  a  whole  hydrogen  eco-system,  the 
Commission kick-starts  today  the European  Clean Hydrogen Alliance – announced in  the 
Commission’s  New  Industrial  Strategy.  The  Alliance  will  play  a  crucial  role  in  facilitating 
and  implementing  the  actions  of  this  Strategy  and  supporting  investments  to  scale  up 
production and demand for renewable and low-carbon hydrogen. It is strongly anchored in the 
hydrogen  industrial  value  chain  from  production  via  transmission  to  mobility,  industry, 
energy,  and  heating  applications,  and  supports  the  related  skills  and  labour  market 
adjustments  where  needed.  It  will  bring  together  the  industry,  national,  regional  and  local 
public authorities and the civil  society.  Through  interlinked, sector-based CEO round tables 
and  a  policy-makers’  platform,  the  Alliance  will  provide  a  broad  forum  to  coordinate 
investment by all stakeholders and engage civil society.  

The key deliverable of the Alliance will be to identify and build up a clear pipeline of viable 
investment  projects.  This  will  facilitate  coordinated  investments  and  policies  along  the 
hydrogen value chain, and cooperation across private and public stakeholders across the EU, 
providing public support where appropriate  and  crowding in  private investment.  It  will also 
give visibility to these projects and allow them to find appropriate support where necessary. 
At this point, already 1.5-2.3 GW of new renewable hydrogen production projects are under 
construction or announced, and an additional 22 GW of electrolyser projects37 are envisaged 
and would require further elaboration and confirmation. 

The  Commission  will  also  follow  up  on  the  recommendations  identified  in  a  report  by  the 
Strategic  Forum  for  Important  Projects  of  Common  European  Interest  (IPCEI)38  to 
promote  well-coordinated  or  joint  investments  and  actions  across  several  Member  States 
aimed at supporting a hydrogen supply chain. The cooperation initiated within the hydrogen 
ecosystem in  the  Strategic Forum will contribute to  a swift uptake of activity in  the Clean 
Hydrogen Alliance. In turn, the Alliance will simultaneously facilitate cooperation in a range 
of large investment projects, including IPCEI projects, along the hydrogen value chain. The 

34   Hydrogen Roadmap Europe, based on an ambitious scenario of 665 TWh by 2030 (FCH JU, 2019) 
35   Asset study (2020). Hydrogen generation in Europe: Overview of costs and key benefits. Investment 

projections assume 40 GW of renewable hydrogen as well as 5 MT of low-carbon hydrogen by 2030, and 
500 GW of renewable electrolysers by 2050. 

36  Asset study (2020). Hydrogen generation in Europe: Overview of costs and key benefits. Assuming a steel 

production plant of 400,000 tonnes/year. 

37  Short-term projects collected from the TYNDP ENTSOs, the IEA hydrogen project database, and presented 
to the ETS Innovation Fund. Future project pipeline is based on industry estimates in Hydrogen Europe 
(2020) Post Covid-10 and the Hydrogen Sector. 
https://hydrogeneurope.eu/sites/default/files/Post%20COVID-
19%20for%20the%20Hydrogen%20Sector%20(2).pdf. 

38  Strengthening Strategic Value Chains for a future-ready EU Industry. Report of the Strategic Forum for 
Important Projects of Common European Interest. https://ec.europa.eu/docsroom/documents/37824.   

8 

 
 
 
 
 
 
                                                           
specific IPCEI instrument enables State aid to address market failures for large cross-border 
integrated projects for hydrogen and fuels derived from hydrogen that significantly contribute 
to achieve climate goals.  

Additionally, as part of the new recovery instrument Next Generation EU,  the InvestEU 
programme  will  see  its  capacities  more  than  doubled.  It  will  continue  to  support  the 
deployment  of  hydrogen,  in  particular  by  incentivising  private  investment,  with  a  strong 
leverage  effect,  through  its  original  four  policy  windows  and  the  new  Strategic  Investment 
Window.  

The  renewed  sustainable  finance  strategy  to  be  adopted  by  the  end  of  2020  and  the  EU 
sustainable  finance  taxonomy39  will  guide  investments  in  hydrogen  across  key  economic 
sectors by promoting activities and projects that will provide a substantial contribution to de-
carbonisation.  

A  number  of  Member  States  have  identified  renewable  and  low-carbon  hydrogen  as  a 
strategic element of their National Energy and Climate Plans. The Commission will exchange 
with  Member  States  on  their  hydrogen  plans  through  the  Hydrogen  Energy  Network 
(HyNet)40.  Member  States  will  need  to  build,  among  others,  on  these  plans,  and  on  the 
priorities  identified  in  the  context  of  the  European  Semester,  when  designing  their  national 
recovery  and  resilience  plans  in  the  context  of  the  new  Recovery  and  Resilience  Facility, 
which  will  aim  to  support  Member  States’  investment  and  reforms  that  are  essential  for  a 
sustainable recovery.  

Furthermore,  the  European  Regional  Development  Fund  and  the  Cohesion  Fund,  which 
will benefit from a top-up in the context of the new initiative REACT-EU, will continue to 
be available to support the green transition. In the framework of the next funding period 2021-
2027,  the  Commission  will  work  with  Member  States,  regional  and  local  authorities,  the 
industry and other stakeholders so that these funds contribute to support innovative solutions 
in  the field  of  renewable and low-carbon hydrogen, with  technology transfer, public-private 
partnerships, as well as pilot lines to test new solutions or perform early product validation. 
The possibilities offered to  carbon intensive regions under the  Just Transition Mechanism 
should  also  be  fully  explored.  Finally,  synergies  between  the  Connecting  Europe  Facility 
Energy  and  the  Connecting  Europe  Facility  Transport  will  be  harnessed  to  fund  dedicated 
infrastructure  for  hydrogen,  repurposing  of  gas  networks  and  carbon  capture  projects,  and 
finance hydrogen refuelling stations.  

4.  BOOSTING DEMAND AND SCALING UP PRODUCTION  

Building  up  a  hydrogen  economy  in  Europe  requires  a  full  value  chain  approach.  The 
production  of  hydrogen  from  renewable  or  low-carbon  sources,  the  development  of 
infrastructure to  supply  hydrogen to  the  end-consumers, and the creation of market  demand 
need  to  go  in  parallel,  activating  a  virtuous  circle  of  increased  supply  and  demand  for 
hydrogen.  It  also  requires  reduced  supply  costs  –  through  declining  costs  for  clean 
production  and  distribution  technologies  and  affordable  costs  of  renewable  energy  input, 

39  Regulation on establishment of a framework to facilitate sustainable investment. 
40   HyNet is an informal platform set up by DG ENER to support national authorities on hydrogen issues. 

https://ec.europa.eu/energy/topics/energy-system-integration/hydrogen_en. 

9 

 
 
 
 
 
 
 
                                                           
ensuring cost competitiveness with fossil fuels. Off-grid renewable hydrogen production is a 
further option in this context.  

In  addition,  it  will  require  a  large  amount  of  raw  materials41.  Securing  these  raw  materials 
should,  therefore,  be  also  looked  at  in  the  Critical  Raw  Materials  Action  Plan,  the 
implementation of the new Circular Economy Action Plan, and EU’s trade policy approach to 
ensure undistorted, fair trade and investments in those raw materials. A life-cycle approach is 
also  needed  to  minimise  the  negative  climate  and  environmental  impacts  of  the  hydrogen 
sector. 

Boosting demand and supply of hydrogen is likely to require various forms of support, 
differentiated in line with the vision of this strategy to prioritise the deployment of renewable 
hydrogen.  While  in  a  transition  phase,  appropriate  support  will  be  needed  for  low  carbon 
hydrogen,  this  should  not  lead  to  stranded  assets.  The  revision  of  the  State  aid  framework, 
including the State aid guidelines for energy and environmental protection, foreseen in 2021, 
will  be  an  opportunity  to  create  a  comprehensive  enabling  framework  to  advance  the 
European  Green Deal and in particular decarbonisation, including with respect to hydrogen 
while limiting potential distortions of competition and adverse effects in other Member States.  

Boosting demand in end-use sectors  

The creation of new lead markets goes hand in hand with the scaling up of the production of 
hydrogen.  Two  main  lead  markets,  industrial  applications  and  mobility,  can  be  gradually 
developed to use the potential of hydrogen for a climate-neutral economy cost-effectively.  

An  immediate  application  in  industry  is  to  reduce  and  replace  the  use  of  carbon-intensive 
hydrogen  in  refineries,  the  production  of  ammonia,  and  for  new  forms  of  methanol 
production, or to partially replace fossil fuels in steel making. In a second phase, hydrogen 
can form the basis for investing in and constructing zero-carbon steel making processes in the 
EU, envisioned under the Commission’s new industrial strategy. 

In transport, hydrogen is also a promising option where electrification is more difficult. In a 
first phase, early adoption of hydrogen can occur in captive uses, such as local city buses, 
commercial fleets (e.g. taxis) or specific parts of the rail network, where electrification is 
not  feasible.  Hydrogen  refuelling  stations  can  easily  be  supplied  by  regional  or  local 
electrolysers,  but  their  deployment  will  need  to  build  on  clear  analysis  of  fleet  demand  and 
different requirements for light- and heavy-duty vehicles.  

Hydrogen  fuel  cells  should  be  further  encouraged  in  heavy-duty  road  vehicles,  alongside 
electrification, including coaches, special purpose vehicles, and long-haul road freight given 
their high CO2 emissions. The 2025 and 2030 targets set out in the CO2 Emission Standards 
Regulation are an important driver to create a lead market for hydrogen solutions, once fuel 
cell  technology  is  sufficiently  mature  and  cost-effective.  Projects  of  the  Horizon  2020  Fuel 
Cells  and  Hydrogen  Joint  Undertaking  (FCH-JU)  are  aiming  to  accelerate  Europe’s 
technological lead.  

41   Europe is fully dependent on the supply of 19 of 29 raw materials relevant to fuel cells and electrolyser 

technologies (such as the platinum group metals), and also relies on several critical raw materials for various 
renewable power generation technologies.  

10 

 
 
 
 
 
 
 
 
 
 
                                                           
Hydrogen  fuel-cell  trains,  could  be  developed  to  other  viable  train  commercial  routes  that 
are difficult or not cost-effective to electrify: about 46 % of the mainline network is still being 
served by diesel technology today. Certain fuel-cell hydrogen train applications (e.g. Multiple 
Units) can already be cost competitive with diesel today.  

For  inland  waterways  and  short-sea  shipping,  hydrogen  can  become  an  alternative  low 
emission fuel, especially since the Green Deal emphasises that CO2 emission in the maritime 
sector  must  have  a  price.  Scaling  up  fuel  cell  power  from  one42  to  multiple  megawatts  and 
using renewable hydrogen for the production of synthetic fuels, methanol or ammonia - with 
higher energy density – are required for longer-distance and deep-sea shipping. 

Hydrogen can become in the longer-term an option to decarbonise the aviation and maritime 
sector, through the production of liquid synthetic kerosene or other synthetic fuels. These are 
“drop-in” fuels that can be used with existing aircraft technology, but implications in terms of 
energy  efficiency  have  to  be  taken  into  account.  In  the  longer-term,  hydrogen-powered  fuel 
cells, requiring adapted aircraft design, or hydrogen-based jet engines may also constitute an 
option  for  aviation.  To  realise  these  ambitions  will  require  a  roadmap  for  the  considerable 
long-term  research  and  innovation  efforts43,  including  under  Horizon  Europe,  the  Fuel  Cell 
and Hydrogen Joint Undertaking and possible initiatives as part of the Hydrogen Alliance.   

The  Commission  will  address  the  use  of  hydrogen  in  the  transport  sector  in  the  upcoming 
Sustainable and Smart Mobility Strategy, announced in the European Green Deal and due 
to be presented before the end of 2020. 

The key limiting factor for the use of hydrogen in industrial applications and transport is often 
the  higher  costs,  including  additional  investments  into  hydrogen-based  equipment,  storage 
and bunkering facilities. Furthermore, the potential impact  of supply chain risks  and market 
uncertainty are amplified by the tight margins for final industrial products due to international 
competition.  

Demand  side  support  policies  will  therefore  be  needed.  The  Commission  will  consider 
various  options  for  incentives  at  EU  level,  including  the  possibility  of  minimum  shares  or 
quotas of renewable hydrogen or its derivatives in specific end-use sectors44 (for instance 
certain  industries  as  the  chemical  sector,  or  transport  applications),  allowing  demand  to  be 
driven in a targeted way. In this context, the concept of virtual blending45 could be explored.  

42   The FLAGSHIP project is developing two commercial hydrogen-power fuel cell vessels in France and in 
Norway, with hydrogen produced on-site with 1 MW electrolysers powered by renewable electricity. 
43   Hydrogen-powered aviation. A fact-based study of hydrogen technology, economics and climate impact by 

2050. May 2020. 
https://www.fch.europa.eu/sites/default/files/FCH%20Docs/20200507_Hydrogen%20Powered%20Aviation
%20report_FINAL%20web%20%28ID%208706035%29.pdf. 

44  The Renewable Energy Directive already provides support for renewable hydrogen and includes it explicitly 

as a means of meeting the sectorial target for renewables in the transport sector. 

45   ‘Virtual blending’ refers to a share of hydrogen in the overall volume of gaseous energy carriers (i.e. 

methane) regardless as to whether these gases are blended physically in the same infrastructure or in separate, 
dedicated infrastructures.  

11 

 
 
 
 
 
 
 
                                                           
Scaling up production  

Whilst around 280 companies46 are active in the production and supply chain of electrolysers 
and more than 1 GW of electrolyser projects are in the pipeline, the total European production 
capacity for electrolysers is currently below 1 GW per year. To reach the strategic objective 
of  40  GW  electrolyser  capacity  by  2030,  a  coordinated  effort  with  the  European  Clean 
Hydrogen  Alliance,  Member  States  and  front-runner  regions  is  needed  as  well  as  support 
schemes  before  hydrogen  becomes  cost-competitive.  The  technologies  for  scaling  up 
hydrogen  production  such  as  solar  and  wind-based  electricity  as  well  as  carbon  capture  use 
and storage continue to get increasingly competitive as the supply chain develops.  

To  kick-start  hydrogen  development,  European  industry  needs  clarity  and  investors  need 
certainty in the transition, notably a clear understanding across the Union on (i) the hydrogen 
production  technologies  that  need  to  be  developed  in  Europe,  as  well  as  (ii)  what  can  be 
considered as renewable and low-carbon hydrogen. The end goal for the EU is clear: climate-
neutral  energy  system  integration  with  renewable  hydrogen  and  renewable  electricity  at  its 
core. As this will be a challenge taking  a long period of time, the EU will need to plan this 
transition  carefully,  taking  into  account  today’s  starting  points  and  infrastructure  that  may 
differ across Member States.  

In order to tailor a supportive policy framework in function of the carbon emission reduction 
benefits  of  hydrogen  in  a  transitional  phase,  and  to  inform  customers,  the  Commission  will 
work  to  swiftly  introduce,  based  on  impact  assessments,  EU-wide  instruments.  This  would 
include  a  common  low-carbon  threshold/standard  for  the  promotion  of  hydrogen 
production installations based on their full life-cycle greenhouse gas performance, which 
could  be  defined  relative  to  the  existing  ETS  benchmark47  for  hydrogen  production.  In 
addition,  it  would  include  a  comprehensive  terminology  and  European-wide  criteria  for 
the certification of renewable and low-carbon hydrogen possibly building on the existing 
ETS  monitoring,  reporting  and  verification  and  the  provisions  set  out  in  the  Renewable 
Energy  Directive48.  This  framework  could  be  based  on  the  full  life-cycle  greenhouse  gas 
emissions49, considering the already existing CertifHy50 methodologies developed by industry 
initiatives,  in  consistency  with  the  EU  taxonomy  for  sustainable  investments.  The  specific, 
complementary  functions  that  Guarantees  of  Origin  (GOs)  and  sustainability  certificates 
already  play  in  the  Renewable  Energy  Directive  can  facilitate  the  most  cost-effective 
production and EU-wide trading. 

As regards electricity-based hydrogen, the growing share of renewables in power generation 
together with the ETS cap on the CO2 emissions of electricity for the EU as a whole will over 
time lead to lower CO2 emissions upstream while the use of hydrogen is replacing fossil fuels 

46  60% of EU companies active are small- and medium-size enterprises. 
47  Only refers to steam methane reforming. 
48   The Renewable Energy Directive allows hydrogen produced from installations connected to the grid (even if 

the electricity mix has low shares of renewable electricity) to be statistically accounted for as 100% 
renewable, provided that certain conditions are met, including the additionally of the renewable electricity 
used. The Commission will table a delegated act laying out the conditions in 2021. 

49  See Energy System Integration Strategy COM(2020) 299 final. 
50  E.g. CertifHy sets a life-cycle GHG emission threshold based on the existing ETS benchmark and an 

emission reduction target derived from the Renewable Energy Directive. 

12 

 
 
 
 
 
 
                                                           
downstream in end-use sectors. The CO2 emissions of electricity remain relevant for policies 
stimulating hydrogen production as it should be avoided that electricity production as such is 
supported  indirectly;  demand  for  electricity  for  hydrogen  should  be  enabled  in  particular  at 
times  of  abundant  supply  of  renewable  electricity  in  the  grid.  In  the  case  of  fossil-based 
hydrogen  with  carbon  capture,  the  Commission  will  address  upstream  methane  emissions 
occurring during the production and transport of natural gas and propose mitigating measures 
as part of the upcoming EU Strategy on Methane.  

A supportive policy framework for scaling up hydrogen 

An  incentivising,  supportive  policy  framework  needs  to  enable  renewable  and,  in  a 
transitional  period,  low-carbon  hydrogen  to  contribute  to  decarbonisation  at  the  lowest 
possible  cost,  whilst  considering  other  important  aspects,  such  as  industrial  competitiveness 
and  its  value  chain  implications  for  the  energy  system.  The  EU  already  has  the  basis  for  a 
supportive policy-framework, notably with the Renewable Energy Directive and the Emission 
Trading System (ETS), while the Next Generation EU, the 2030 Climate Target Plan, and the 
Industrial  Policy  provide  the  instruments  and  financial  resources  to  accelerate  our  efforts 
towards a sustainable recovery. 

The  ETS,  as  a  market  based  instrument,  already  provides  a  technology-neutral,  EU-wide 
incentive  towards  cost-effective  decarbonisation  in  all  its  covered  sectors  through  carbon 
pricing. A strengthened  ETS,  with  potential  expansion in  scope as announced as  part of the 
Green  Deal,  will  gradually  reinforce  that  role.  Almost  all  existing  fossil  based  hydrogen 
production  is  covered  by  the  ETS,  but  the  sectors  concerned51  are  deemed  to  be  at  a 
significant risk of carbon leakage and therefore receive free allocation at 100% of benchmark 
levels.  As  foreseen  in  the  ETS  Directive52,  the  benchmark  used  for  free  allocation  will  be 
updated for phase 4. In the forthcoming revision of the ETS, the Commission may consider 
how  the  production  of  renewable  and  low-carbon  hydrogen  could  be  further  incentivised, 
while taking due account of the risk for sectors exposed to carbon leakage. Should differences 
in  climate ambition levels  around the world persist, the Commission  will propose  a Carbon 
Border  Adjustment  Mechanism  in  2021  to  reduce  the  risk  of  carbon  leakage,  in  full 
compatibility with WTO rules, and will also look at the implications for hydrogen.  

With  the  need  to  scale-up  renewable  and  low-carbon  hydrogen  before  they  are  cost-
competitive,  support  schemes  are  likely  to  be  required  for  some  time,  subject  to 
compliance with competition rules. A possible policy instrument would be to create tendering 
systems  for  carbon  contracts  for  difference  (‘CCfD’).  Such  a  long  term  contract  with  a 
public counterpart would remunerate the investor by paying  the difference between the CO2 
strike  price  and  the  actual  CO2  price  in  the  ETS  in  an  explicit  way,  bridging  the  cost  gap53 
compared  to  conventional  hydrogen  production.  Areas  where  a  pilot  scheme  for  carbon 
contracts for difference  can be applied is to accelerate the replacement of existing hydrogen 
production  in  refineries  and  fertiliser  production,  low  carbon  and  circular  steel  and  basic 
chemicals,  and  to  support  the  deployment  in  the  maritime  sector  of  hydrogen  and  derived 
fuels  such  as  ammonia  and  the  deployment  of  synthetic  low-carbon  fuels  in  the  aviation 

51  Notably for refineries and fertiliser production. 
52  DIRECTIVE (EU) 2018/410. 
53  The contract would cover the difference between the CO2 strike price and the actual CO2 price in the ETS in 

an explicit way. 

13 

 
 
 
 
 
 
                                                           
sector. It could be implemented at EU, or national level, including with the support of the ETS 
Innovation  Fund.  The  proportionality  of  such  measures  and  their  market  impact  should  be 
assessed  carefully  ensuring  that  these  comply  with  the  State  aid  guidelines  for  energy  and 
environmental protection. 

Finally,  direct  and  transparent,  market-based  support  schemes  for  renewable  hydrogen, 
allocated through competitive tenders, could be envisaged. Market-compatible support should 
be coordinated within a transparent, efficient and competitive hydrogen and electricity market 
that provides price signals that reward electrolysers for the services they provide to the energy 
system  (e.g.  flexibility  services,  augmenting  renewable  production  levels,  reducing  burden 
from renewable incentives).  

Overall,  this  approach  allows  for  differentiated  support  for  boosting  demand  and  supply, 
taking  into  account  the  type  of  hydrogen  and  different  starting  points  of  Member  States,  in 
line  with  State  aid  policy.  Investments  into  renewable  and  low-carbon  hydrogen  production 
installations and technologies, such as electrolysers, can apply for EU funding. Furthermore, 
carbon contracts for difference for renewable and low-carbon hydrogen could provide initial 
support  for  early  deployment  in  various  sectors  until  they  have  become  sufficiently  mature 
and cost-competitive in their own right. For renewable hydrogen, direct market based support 
schemes  and  quotas  could  also  be  considered.  This  should  allow  to  kick-start  a  hydrogen 
ecosystem  of  significant  scale  throughout  the  EU  in  the  coming  decade  and  towards  full 
commercial deployment afterwards. 

5.  DESIGNING A FRAMEWORK FOR HYDROGEN INFRASTRUCTURE AND MARKET RULES  

The role of infrastructure 

A condition for a widespread use of hydrogen as an energy carrier in the EU is the availability 
of energy infrastructure for connecting supply and demand. Hydrogen may be transported via 
pipelines,  but  also  via  non-network  based  transport  options,  e.g.  trucks  or  ships  docking  at 
adapted LNG terminals, insofar as technically feasible. Transport can happen as pure gaseous 
or liquid hydrogen, or bound in bigger molecules that are easier to transport (e.g. ammonia or 
liquid organic hydrogen carriers). Hydrogen can also provide cyclical or seasonal storage, e.g. 
in  salt  caverns54,  to  produce  electricity  to  cover  peak  demand,  secure  hydrogen  supply,  and 
allow electrolysers to operate flexibly.  

The  infrastructure  needs  for  hydrogen  will  ultimately  depend  on  the  pattern  of  hydrogen 
production and demand and transportation costs and are linked to the different phases of the 
development  of  hydrogen  production,  increasing  significantly  after  2024.  Furthermore, 
infrastructure to support carbon capture use and storage may be needed for the production of 
low-carbon  hydrogen  and  synthetic  fuels.  Following  the  stepwise  approach  outlined  above 
demand  for  hydrogen  may  initially  be  met  by  production  on-site  (from  local  renewables 
sources  or  natural  gas)  in  industrial  clusters  and  coastal  areas  through  existing  “point-to-
point”  connections  between  production  and  demand.  The  existing  rules  for  so-called  closed 

54  In the UK, at Teesside in Yorkshire, a British company stores 1 million m3 of pure hydrogen (95% H2 and 3–
4% CO2) in three salt caverns at a depth about 400 m at 50 bar. Europe’s technical potential to store hydrogen 
in salt caverns is around 85 PWh (Caglayan et al. 2020). 

14 

 
 
 
 
 
 
                                                           
distribution systems, direct lines or exemptions in the gas and electricity markets may provide 
guidance on how to address this55.  

In the second phase, local hydrogen networks would emerge to cater for additional industrial 
demand.  With  increasing  demand,  the  optimisation  of  the  production,  use  and  transport  of 
hydrogen will have to be secured and is likely to require longer-range transportation to ensure 
that the entire system is efficient through the revision of the Trans-European Networks for 
Energy  (TEN-E)  and  the  review  of  the  internal  gas  market  legislation  for  competitive 
decarbonised  gas  markets56.  To  ensure  interoperability  of  markets  for  pure  hydrogen, 
common  quality  standards  (e.g.  for  purity  and  thresholds  for  contaminants)  or  cross-border 
operational rules may be necessary.  

This  process  should  be  combined  with  a  strategy  to  meet  the  transport  demand  through  a 
network of refuelling stations, linked to the review of the Alternative Fuels Infrastructure 
Directive and the revision of the Trans-European Transport Network (TEN-T).  

With  the  imminent  phase-out  of  low  calorific  gas  and  with  the  demand  for  natural  gas 
declining  after  2030,  elements  of  the  existing  pan-European  gas  infrastructure  could  be 
repurposed  to  provide  the  necessary  infrastructure  for  large-scale  cross-border  transport  of 
hydrogen. Repurposing may provide an opportunity for a cost-effective energy transition 
in combination with (relatively limited) newly built hydrogen dedicated infrastructure57. 

However,  existing  natural  gas  pipelines  are  owned  by  network  operators  that  are  often  not 
allowed  to  own,  operate  and  finance  hydrogen  pipelines.  To  enable  repurposing  of  existing 
assets,  its  technical  suitability  must  be  assessed  as  well  as  a  review  of  the  regulatory 
framework  for  competitive  decarbonised  gas  markets  should  allow  such  financing  and 
operation with an overall energy system perspective in mind. Sound infrastructure planning, 
such  as  on  the  basis  of  ten  year  network  development  plans  (‘TYNDP’),  is  needed  on  the 
basis of which decisions to invest can be taken. Such planning should also inform and be the 
basis for incentivising investments by private investors in electrolysers at the best locations. 
The  Commission  will  thus  ensure  the  full  integration  of  hydrogen  infrastructure  in  the 
infrastructure  planning,  including  through  the  revision  of  the  Trans-European  Networks  for 
Energy  and  the  work  on  Ten-Year  Network  Development  Plans  (TYNDPs),  taking  into 
account also the planning of a network of fuelling stations. 

The  blending  of  hydrogen  in  the  natural  gas  network  at  a  limited  percentage  may  enable 
decentralised  renewable  hydrogen  production  in  local  networks  in  a  transitional  phase58. 
However,  blending  is  less  efficient  and  diminishes  the  value  of  hydrogen.  Blending  also 
changes  the  quality  of  the  gas  consumed  in  Europe  and  may  affect  the  design  of  gas 
infrastructure, end-user applications, and cross-border system interoperability. Blending thus 

55  See Articles 28 and 38 of Directive 2009/73/EC (OJ 211/94 of 14.08.2009) and Articles 7 and 38 of Directive 

(EU) 2019/944 (OJ 158/125 of 14.06.2019). 

56   Review of Directive 2009/73/EC concerning common rules for the internal market in natural gas and 

Regulation (EC) 715/2009 on conditions for access to the natural gas transmission networks. 

57  E.g. it is expected that a hydrogen network in Germany and the Netherlands may consist of up to 90% of the 
of repurposed natural gas infrastructure. Repurposed pipelines are often already to a large extent depreciated. 
58  It would provide a reliable evacuation route, and, if combine with support schemes, guarantees revenues to 
kick-start  production.  Particularly  for  electrolysers  located  at  optimal  production  sites,  rather  than  in 
proximity to demand, a lack of sufficient dedicated hydrogen infrastructure may imply increased investments 
in on-site storage and/or curtailment of production. 

15 

 
 
 
 
 
 
 
                                                           
risks fragmenting the internal market if neighbouring Member States accept different levels of 
blending  and  cross-border  flows  are  hindered.  To  mitigate  such  a  situation,  the  technical 
feasibility of adjusting the quality and cost of handling the differences in gas quality need to 
be assessed. Current gas quality standards  – national and CEN – would need to be updated. 
Moreover,  reinforcement  of  instruments  may  be  needed  to  secure  cross-border  coordination 
and  system  interoperability  for  an  unhindered  flow  of  gases  across  Member  States.  These 
options require careful consideration in  terms  of  their contribution  to the decarbonisation of 
the energy system as well as economic and technical implications.   

Fostering liquid markets and competition 

As EU Member States have different potential for the production of renewable hydrogen, an 
open  and  competitive  EU  market  with  unhindered  cross-border  trade  has  important  benefits 
for competition, affordability, and security of supply.  

Moving  towards a liquid market  with  commodity-based hydrogen trading  would facilitate 
entry  of  new  producers  and  would  be  beneficial  for  deeper  integration  with  other  energy 
carriers. It would create viable price signals for investments and operational decisions. Whilst 
recognising the inherent differences, existing rules that enable efficient commercial operations 
developed  for  the  electricity  and  gas  markets,  such  as  access  to  trading  points  and  standard 
product  definitions,  could  be  considered for a hydrogen market  under the  review of the  gas 
legislation for competitive decarbonised gas markets. 

To  facilitate  the  deployment  of  hydrogen  and  develop  a  market  where  also  new  producers 
have access to customers59, hydrogen infrastructure should be accessible to all on a non-
discriminatory basis. In order not to distort the level playing field for market-based activities, 
network  operators  must  remain  neutral.  Third-party  access  rules,  clear  rules  on  connecting 
electrolysers to the grid and streamlining of permitting and administrative hurdles will need to 
be developed to reduce undue burden to market access. Providing clarity now will avoid sunk 
investments and the costs of ex-post interventions later. 

An open and competitive EU market with prices that reflect energy carriers’ production costs, 
carbon  costs,  and  external  costs  and  benefits  would  efficiently  provide  clean  and  safe 
hydrogen to  end users who  value  it most60.  Equal  treatment  of hydrogen with other carriers 
must be ensured to not distort the relative prices of different energy carriers61. Solid relative 
price  signals  not  only  allow  energy  users  to  make  informed decisions  about  what  energy 
carrier to use where, it also means that they can make efficient decisions between consuming 
energy  or  not,  i.e.  to  make  an  optimal  trade-off  when  investing  in  energy  efficiency 
measures.   

59   In line with the European Pillar of Social Rights (principle 20),where technology promotes the affordability 

of, and access to essential services for all. 

60   This would be in line with the energy efficiency first principle. 
61   For instance, energy losses from hydrogen production or conversion should not be socialised if it generates 

undue advantage compared to other carriers.   

16 

 
 
 
 
 
 
 
 
                                                           
6. 

PROMOTING RESEARCH AND INNOVATION IN HYDROGEN TECHNOLOGIES 

The EU has supported research and innovation on hydrogen for many years, starting through 
traditional collaborative projects62, and subsequently mainly with the Fuel Cell and Hydrogen 
Joint Undertaking (FCH JU)63. These efforts have enabled several technologies to come close 
to maturity64, alongside the development of high-profile projects in promising applications65, 
and  to  achieve  EU  global  leadership  for  future  technologies,  notably  on  electrolysers, 
hydrogen refuelling stations and megawatt-scale fuel cells. EU funded projects also allowed 
improvement  in  the  understanding  of  the  applicable  regulation  for  boosting  the  production 
and utilisation of hydrogen in the EU. 

To ensure a full hydrogen supply chain to serve the European economy, further research and 
innovation efforts are required.  

First,  on  the  generation  side,  this  will  entail  upscaling  to  larger  size,  more  efficient  and 
cost-effective electrolysers in the range of gigawatts that, together with mass manufacturing 
capabilities and new materials, supply hydrogen to large consumers. As a first step, a call for 
proposals  for  a  100  MW  electrolyser  will  be  launched  this  year.  Solutions  at  lower 
technology readiness level need also to be incentivised and developed such as, for example, 
hydrogen production from  marine  algae, from direct  solar water splitting,  or  from  pyrolysis 
processes  with  solid  carbon  as  side  product,  while  paying  due  attention  to  sustainability 
requirements. 

Second,  infrastructure  needs  further  development  to  distribute,  store  and  dispense 
hydrogen at large volumes and possibly over long distances. The  repurposing of existing 
gas  infrastructure  for  transporting  hydrogen  or  hydrogen-based  fuels  also  needs  further 
research, development and innovation activities. 

Third,  large  scale  end-use  applications  need  to  be  further  developed,  notably  in  industry 
(e.g. using hydrogen to replace coking coal in steel-making or upscaling renewable hydrogen 
in chemical and petrochemical industry) and in transport (e.g. heavy duty road transport, rail, 
waterborne and aviation). Pre-normative research, including the safety dimension, should be 
tailored to assist deployment plans and enable improved, harmonised standards.  

Finally,  further  research  is  needed  to  support  policy  making  on  a  number  of  cross-cutting 
areas, in particular to enable improved and harmonised (safety) standards and monitoring 
and assess social and labour market impacts. Reliable methodologies have to be developed for 
assessing the environmental impacts of hydrogen technologies and their associated value 
chains, 
life-cycle  greenhouse  gas  emissions  and  sustainability. 
Importantly, securing the supply of critical raw materials in parallel to material reduction, 
substitution,  reuse,  and  recycling  needs  a  thorough  assessment  in  the  light  of  their  future 
expected increasing deployment, with due account being paid to ensuring security of supply 
and high levels of sustainability in Europe. 

their  full 

including 

62  First  examples  are  the  hydrogen  bus  demonstration  through  the  CUTE  projects  (started  in  2003)  and  its 
successor  HyFLEET:  CUTE,  which  made  major  advances  in  proving  fuel  cell  and  hydrogen  propulsion 
technologies. 

63  FCH JU is a public private partnership aligning European research and industry to a common research 

agenda. Over the last decade, the EU contributed around €900 million to FCH JU. 
64  E.g. buses, passenger cars, vans, material-handling vehicles, and refuelling stations. 
65  E.g. e-fuels for aviation, hydrogen in rail, and the maritime sector. 

17 

 
 
 
 
 
 
 
                                                           
Coordinated EU research and innovation support is also needed for large-scale high-impact 
projects  across  the  entire  hydrogen  value  chain,  including  large  scale  electrolysers 
(hundreds  of  megawatts  connected  to  clean  electricity  production  and  supplying  renewable 
hydrogen for example to industrial areas or green airports and ports (as proposed in the Green 
Deal Call), that are able to test technology in real life environment. 

To  address  all  these  challenges  the  Commission  will  carry  out  a  set  of  actions  targeting 
research,  innovation,  and  relevant  international  cooperation66,  supporting  the  energy  and 
climate policy objectives.  

the  Research  and 

Innovation  framework  Programme  Horizon  Europe,  an 
Under 
institutionalized Clean Hydrogen Partnership was proposed with main focus on renewable 
hydrogen production, transmission, distribution and storage, alongside selected fuel cell end-
use technologies67. While the Clean Hydrogen Partnership will support research, development 
and  demonstration  of  technologies  to  bring  them  to  market  readiness,  the  Clean  Hydrogen 
Alliance will pool resources to bring scale and impact to industrialisation efforts, in order to 
achieve  further  cost  reductions  and  competitiveness.  The  Commission  also  proposes  to 
increase  the  support  for  research  and  innovation  in  the  end-use  of  hydrogen  in  key  sectors 
through  synergies  with  important  partnerships  proposed  under  Horizon  Europe,  notably  on 
transport68 and on industry69. Close cooperation between these partnerships would support the 
development of supply chains for hydrogen and jointly scale-up investments. 

In  addition,  the  ETS  Innovation  Fund,  which  will  pool  together  around  €10  billion  to 
support  low-carbon  technologies  over  the  period  2020-2030,  has  the  potential  to  facilitate 
first-of-a-kind  demonstration  of  innovative  hydrogen-based  technologies.  The  Fund  can 
substantially  reduce  the  risks  of  large  and  complex  projects,  and  therefore  offers  a  unique 
opportunity to  prepare such technologies for  a wide-scale  roll out.  A first  call for proposals 
under the Fund was launched on 3 July 2020. 

The  Commission  will  also  provide  targeted  support  to  build  the  necessary  capacity  for 
preparation  of  financially  sound  and  viable  hydrogen  projects,  where  this  is  identified  as  a 
priority in the relevant national and regional programmes, through dedicated instruments (e.g. 
InnovFin  Energy  Demonstration  Projects,  InvestEU)  possibly  in  combination  with  advisory 
and  technical  assistance  from  the  Cohesion  Policy,  from  the  European  Investment  Bank 
Advisory Hubs or under Horizon Europe. For example, the Hydrogen Valleys Partnership70 is 
already supporting innovation hydrogen eco-systems. In the next funding period, a dedicated 
Interregional Innovation Investment Instrument with a pilot action on hydrogen technologies 
in  carbon-intensive  regions  will  support  the  development  of  innovative  value  chains  in  the 
context of the European Regional Development Fund.  

66  For international actions in Research and Innovation please refer to part 7. 
67  As fuel cell and electrolyser technologies have many similarities. 
68  For example, the proposal of Transport R&I partnerships like 2Zero, Zero Emission Waterborne Transport, 
and Clean Aviation under Horizon Europe will establish further R&I research on Hydrogen applications for 
Transport.  

69  For example on clean steel, circular and climate neutral industries. 
70  This is supported under the S3 Platform on Industrial Modernisation. 

18 

 
 
 
 
 
 
 
 
                                                           
The cooperation with research and innovation efforts of Member States in the context of the 
Strategic  Energy  Technologies  (SET)  Plan  priorities71  will  also  be  ensured.  Synergies  with 
other instruments such as the Innovation Fund or Structural Funds will be sought in order to 
bridge  the  valley-of-death  through  first-of-a-kind  demonstration  projects  reflecting  the 
diversity of opportunities for renewable and low-carbon hydrogen across the EU.  

7. 

THE INTERNATIONAL DIMENSION 

The  international  dimension  is  an  integral  part  of  the  EU  approach.  Clean  hydrogen  offers 
new  opportunities 
for  re-designing  Europe’s  energy  partnerships  with  both 
neighbouring  countries  and  regions  and  its  international,  regional  and  bilateral  partners, 
advancing supply diversification and helping design stable and secure supply chains.  
In  line  with  the  external  dimension  of  the  European  Green  Deal,  the  EU  has  a  strategic 
interest in placing hydrogen high on its external energy policy agenda, continuing to invest in 
international  cooperation  on  climate,  trade  and  research  activities  but  also  broadening  its 
agenda to new areas. 

For many  years, research  has been  the basis for  international  cooperation on hydrogen. The 
EU,  together  with  the  US  and  Japan,  developed  the  most  ambitious  research  programmes 
addressing  different  segments  of 
the  International 
Partnership  for  a  Hydrogen  Economy  (IPHE)  was  established  as  a  first  vehicle  in  this 
respect.  

the  hydrogen  value-chain,  and 

The  interest  in  clean  hydrogen  is  now  growing  globally.  Several  countries  are  developing 
ambitious  research  programmes  along  national  hydrogen  strategies72,  and  an  international 
hydrogen  trade  market  is  likely  to  develop.  The  US  and  China  are  investing  massively  in 
hydrogen  research  and  industrial  development.  Some  of  EU’s  current  gas  suppliers  and 
countries  with  a  strong  potential  for  renewables  are  considering  opportunities  to  export 
renewable  electricity  or  clean  hydrogen  to  the  EU.  For  example  Africa,  due  to  its  abundant 
renewables potential and in particular North Africa due to geographic proximity, is a potential 
supplier of cost-competitive renewable hydrogen to the EU73 requiring that the deployment of 
renewable power generation in these countries strongly accelerates.  

In this context, the EU should actively promote new opportunities for cooperation on clean 
hydrogen with neighbouring countries and regions, as a way to contribute to their clean 
energy  transition  and  foster  sustainable  growth  and  development.  Taking  into  account 
natural  resources,  physical  interconnections  and  technological  development,  the  Eastern 
Neighbourhood, in particular Ukraine, and the Southern Neighbourhood countries should be 
priority partners. Cooperation should range from research and innovation to regulatory policy, 
direct investments and undistorted and fair trade in hydrogen, hydrogen, its derivatives, and 
the  associated  technologies  and  services.  According  to  industry’s  estimate  40  GW  of 
electrolysers  could  be  potentially  installed  in  the  Eastern  and  Southern  Neighbourhood  by 

71  In particular the SET Plan actions where hydrogen use is addressed, such as the actions on industry, on fuels 

and on CCSU. 

72  E.g. Australia, Canada, Norway, South Korea, and several EU Member States. 
73   This would require that the deployment of renewable power generation in these countries strongly 

accelerates. 

19 

 
 
 
 
 
 
 
                                                           
2030,  ensuring  a  sustained  cross-border  trade  with  the  EU.  Realising  the  ambition  and 
supplying  significant  amounts  of  renewable  hydrogen  to  the  EU  should  be  addressed  in 
energy cooperation and diplomacy.  

To support investments in clean hydrogen in the European Neighbourhood, the Commission 
will  mobilise  the  available  financing  instruments  including  the  Neighbourhood  Investment 
Platform,  which  has  financed  for  many  years  projects  accompanying  the  clean  energy 
transition  of  partner  countries.  The  Commission  would  also  be  ready  to  support  new 
hydrogen-related  project  proposals  by  international  financial  institutions,  for  potential  co-
financing  through  this  blending  facility,  for  example  in  the  context  of  the  Western  Balkans 
Investment Framework74. 

The EU Stabilisation and Association  Agreements  with  the  Western Balkans, as well as the 
Association Agreements with Neighbourhood countries, provide the political framework for 
the participation of those countries in joint hydrogen research and development programmes 
with the EU. The Energy Community and the Transport Community will have a critical 
role to play for the promotion of EU regulations, standards and clean hydrogen, including the 
deployment of new infrastructure, such as refuelling networks and the re-use, where relevant, 
of  existing  natural  gas  grids,  as  the  regional  sectorial  international  cooperation  fora. 
Participation  of  the  Western  Balkans  and  Ukraine  in  the  Clean  Hydrogen  Alliance  will  be 
encouraged.  

The  energy  dialogues  with  partners  in  the  Southern  Neighbourhood  will  help  define  and 
advance  a  common  agenda  and  identify  projects  and  joint  activities.  Cooperation  with  the 
industry should also be promoted through regional cooperation fora such as the “Observatoire 
Méditerranéen  de  l’Energie”.  The  Commission  will  explore  in  the  context  of  the  Africa-
Europe  Green  Energy  Initiative75  the  opportunity  to  support  awareness  raising  of  clean 
hydrogen  opportunities  amongst  public  and  private  partners,  including  joint  research  and 
innovation  projects.  It  will  also  consider  potential  projects  through  the  European  Fund  for 
Sustainable Development76. 

More  broadly  hydrogen  could  be  mainstreamed  in  the  EU’s  international,  regional  and 
bilateral energy and diplomacy efforts, but  also  on climate, research, trade and  international 
cooperation.  Broad  agreement  with  international  partners  will  be  essential  to  establish 
conditions for the emergence of a global, rules-based market that contributes to a secure and 
competitive  hydrogen  supply  for  the  EU  market.  Early  action  will  be  key  to  prevent  the 
emergence of market barriers and trade distortions. In this context, an assessment of how to 
address possible distortions and barriers to trade and investment in hydrogen will be carried 
out  in  the  context  of  the  ongoing  EU  Trade  Policy  review.  Furthermore,  bilateral  dialogues 
promoting EU regulations, standards and technologies could be facilitated.  

74  Which is endowed with funds of the EU Instrument for Pre-accession Assistance, as well as with 

contributions from the International Financing Institutions belonging to its platform. 

75  The Africa Europe Green Energy Initiative was laid out in the Communication ‘Towards a comprehensive 

Strategy with Africa’ JOIN(2020) 4 final of 09.03.2020. 

76  The  European  Fund  for  Sustainable  Development  (EFSD)  supports  investments  in  Africa  and  the  EU’s 
neighbouring  countries  to  help  achieve  the  UN  2030  Agenda,  its  Sustainable  Development  Goals  and  the 
Paris Agreement on Climate Change. 

20 

 
 
 
 
 
 
 
                                                           
 
Furthermore,  the  EU  should  promote  in  multilateral  fora  the  development  of  international 
standards  and  the  setting  up  common  definitions  and  methodologies  for  defining  overall 
emissions  from  each  unit  of  hydrogen  produced  and  carried  to  final  use  as  well  as 
international sustainability criteria. The EU is already highly involved in IPHE, and co-leads 
the new clean hydrogen mission under Mission Innovation and the Clean Energy Ministerial 
Hydrogen initiative (CEM  H2I).  International  collaboration could  also  be expanded through 
international  standardisation  bodies  and  global  technical  regulations  of  the  United  Nations 
(UN-ECE,  International  Maritime  Organisation),  including  harmonisation  of  automotive 
regulation  for  hydrogen  vehicles.  Cooperation  under  G20,  as  well  as  with  the  International 
Energy  Agency  (IEA)  and  the  International  Renewable  Energy  Agency  (IRENA),  creates 
further opportunities for exchange of experiences and best practices.  

Finally,  to  reduce  the  foreign  exchange  risks  for  EU  market  operators,  both  on  imports  and 
exports,  it  is  important  to  facilitate  the  development  of  a  structured  international  hydrogen 
market  in  euro.  Hydrogen  being  a  nascent  market,  the  Commission  will  develop  a 
benchmark  for  euro  denominated  transactions  in  hydrogen  thus  contributing  to 
consolidate the role of the euro in trade of sustainable energy. 

8. 

CONCLUSIONS  

Renewable  and  low-carbon  hydrogen  can  contribute  to  reduce  greenhouse  gas  emissions 
ahead  of  2030,  to  the  recovery  of  the  EU  economy,  and  is  a  key  building  block  towards  a 
climate-neutral and zero pollution economy in 2050, by replacing fossil fuels and feedstock in 
hard-to-decarbonise  sectors.  Renewable  hydrogen  also  offers  a  unique  opportunity  for 
research  and  innovation,  maintaining  and  expanding  Europe’s  technological  leadership,  and 
creating economic growth and jobs across the full value chain and across the Union.  

This requires ambitious and well-coordinated policies at national and European levels, as well 
as diplomatic outreach on energy and climate with international partners. This strategy brings 
different  strands  of  policy  action  together,  covering  the  entire  value  chain,  as  well  as  the 
industrial,  market  and  infrastructure  angles  together  with  the  research  and  innovation 
perspective  and  the  international  dimension,  in  order  to  create  an  enabling  environment  to 
scale  up  hydrogen  supply  and  demand  for  a  climate-neutral  economy.  The  Commission 
invites the Parliament, the Council, other EU institutions, social partners and all stakeholders 
to  discuss  how  to  leverage  the  potential  of  hydrogen  to  decarbonise  our  economy  while 
making it more competitive, building on the actions set out in this Communication.  

An investment agenda for the EU 

KEY ACTIONS 

  Through  the  European  Clean  Hydrogen  Alliance,  develop  an  investment  agenda  to 
stimulate the roll out of production and use of hydrogen and build a concrete pipeline of 
projects (by end of 2020). 

  Support  strategic  investments  in  clean  hydrogen  in  the  context  of  the  Commission’s 
recovery  plan,  in  particular  through  the  Strategic  European  Investment  Window  of 
InvestEU (from 2021).  

21 

 
 
 
 
 
 
 
 
 
Boosting demand for and scaling up production  

  Propose  measures  to  facilitate  the  use  of  hydrogen  and  its  derivatives  in  the  transport 
sector in the Commission’s upcoming Sustainable and Smart Mobility Strategy, and in 
related policy initiatives (2020). 

  Explore    additional  support  measures,  including  demand-side  policies  in  end-use 
sectors, for renewable hydrogen building on the existing provisions of Renewable Energy 
Directive (by June 2021).  

  Work  to  introduce  a  common  low-carbon  threshold/standard  for  the  promotion  of 
hydrogen  production  installations  based  on  their  full  life-cycle  GHG  performance  (by 
June 2021).  

  Work to  introduce  a comprehensive terminology and European-wide criteria  for the 

certification of renewable and low-carbon hydrogen (by June 2021).  

  Develop  a  pilot  scheme  –  preferably  at  EU  level  –  for  a  Carbon  Contracts  for 
Difference programme, in particular to support the production of low carbon and circular 
steel, and basic chemicals.  

Designing  an  enabling  and  supportive  framework:  support  schemes,  market  rules  and 
infrastructure 

  Start  the  planning  of  hydrogen  infrastructure,  including  in  the  Trans-European 
Networks  for  Energy  and  Transport  and  the  Ten-Year  Network  Development  Plans 
(TYNDPs) (2021) taking into account also the planning of a network of fuelling stations.  
  Accelerate the deployment of different refuelling infrastructure in  the revision of the 
Alternative Fuels Infrastructure Directive and the revision of the Regulation on the Trans-
European Transport Network (2021). 

  Design  enabling  market  rules  to  the  deployment  of  hydrogen,  including  removing 
barriers  for  efficient  hydrogen  infrastructure  development  (e.g.  via  repurposing)  and 
ensure access to liquid markets for hydrogen producers and customers and the integrity of 
the internal gas market, through the upcoming legislative reviews (e.g. review of the gas 
legislation for competitive decarbonised gas markets (2021).  

Promoting research and innovation in hydrogen technologies 

  Launch a 100 MW electrolyser and a Green Airports and Ports call for proposals as 

part of the European Green Deal call under Horizon 2020 (Q3 2020).  

  Establish  the  proposed  Clean  Hydrogen  Partnership,  focusing  on  renewable  hydrogen 
production,  storage,  transport,  distribution  and  key  components  for  priority  end-uses  of 
clean hydrogen at a competitive price (2021). 

  Steer  the  development  of  key  pilot  projects  that  support  Hydrogen  value  chains,  in 

coordination with the SET Plan (from 2020 onwards). 

  Facilitate  the  demonstration  of  innovative  hydrogen-based  technologies  through  the 
launch of calls for proposals under the ETS Innovation Fund (first call launched in July 
2020). 

22 

 
 
 
 
  Launch  a  call  for  pilot  action  on  interregional  innovation  under  cohesion  policy  on 

Hydrogen Technologies in carbon-intensive regions (2020). 

The international dimension 

  Strengthen  EU  leadership  in  international  fora  for  technical  standards,  regulations 

and definitions on hydrogen. 

  Develop the hydrogen mission within the next mandate of Mission Innovation (MI2). 
  Promote cooperation with Southern and Eastern Neighbourhood partners and Energy 

Community countries, notably Ukraine on renewable electricity and hydrogen.  

  Set out a  cooperation process on renewable hydrogen with the African Union in the 

framework of the Africa-Europe Green Energy Initiative.  

  Develop a benchmark for euro denominated transactions by 2021.  

23