EU must review 'overly ambitious' H2 targets: Audit

The EU needs a "reality check" on "overly ambitious targets" for renewable hydrogen production and imports, the European Court of Auditors (ECA) has said.

The European Commission's RePowerEU targets of producing 10mn t/yr renewable hydrogen by 2030 and importing the same amount were based on "political will" rather than "a robust analysis," the ECA said in a report on EU renewable hydrogen policy. The bloc is "unlikely to meet" the targets "based on available information from member states and industry".

Some industry participants have for a long time criticised the EU goals as unrealistic.

In a response to the ECA's report, the commission said it "acknowledges the challenges" associated with reaching these "aspirational targets". The commission said it will "assess whether the aspirational targets can be reached," but noted it "cannot commit to any update at this stage". It said the underlying objectives "are still valid" and that "a downward review of the targets" could increase uncertainties for investors.

But earlier this year, an assessment in which the commission set out scenarios for the energy sector anticipated much lower domestic renewable hydrogen production of around 3mn t/yr by 2030. The commission told Argus at the time that the RePowerEU projections for 2030 would be reviewed once member states have submitted updated national and energy climate plans (NECPs). These were due by the end of June, but only a few member states submitted them on time.

Responding to the ECA report, the commission said it would accept a recommendation to review its hydrogen strategy more broadly — including incentive mechanisms, the prioritisation of funds and the role of imports compared with domestic production — noting it would take the NECPs into account for this.

EU funding could amount to €18.8bn in 2021-27, based on the ECA's estimates. But the commission itself "does not have a full overview of needs or of the public funding available," the ECA said. Funding opportunities are "scattered between several programmes," which makes it "difficult for companies to determine the type of funding best suited for a given project," it said.

The ECA acknowledged that progress has been made on key regulatory areas, including a definition of renewable hydrogen. But the body notes that this took a long time, leading to investment decisions for projects being delayed.

By Stefan Krumpelmann