French energy regulator CRE has proposed setting individual hydrogen transport tariffs for several regional clusters and separate fees for national infrastructure, an approach that reflects different expectations for the sector's development than in neighbouring Germany.
CRE "is in favour of setting up a two-tier structure" for future hydrogen transport fees across the country, it said in a report on the regulatory framework for hydrogen and CO2 infrastructure. Each regional hub would have its own individual transport fees, while there would be separate "nationwide" tariffs for pipelines that connect the hubs with one another, links to storage sites and cross-border connections with neighbouring countries.
CRE expects that an "ecosystem" for renewable and low-carbon hydrogen will "develop in localised hubs in the short-term" where electrolysis plants will supply nearby industrial consumers. Production and consumption sites will be connected through local transport networks, CRE said, noting that this approach "allows for rapid and no-regret development of the entire French low-carbon hydrogen value chain".
Not all hubs will develop at the same pace and "users of local ecosystems must be able to build their business plans and make their investment decisions without being subject to the uncertainties linked to the development of other hubs," the regulator said. Transport tariffs must therefore differ depending on each hub's individual development so as to prioritise "transparency and price stability within local ecosystems," it said.
As renewable and low-carbon hydrogen production and consumption expands, hubs will increasingly be connected with one another, while the importance of connections to storage sites and other countries will increase, CRE said.
Developing a system that accommodates this expected transition over time is "the biggest challenge" that France faces in terms of establishing a regulatory framework for the hydrogen sector, according to the regulator.
Key regional clusters could initially develop in heavily industrialised port areas which are home to existing or prospective hydrogen users, such as around Dunkirk, Fos-sur-Mer and Le Havre. Another major hub is expected at the so-called "Chemical Valley" south of Lyon.
Nearest unlike neighbours
CRE's proposal differs from the approach taken by neighbouring Germany, which is opting for uniform transport tariffs across its entire planned core hydrogen network of nearly 9,700km that is due to be largely completed by 2032.
Germany's expected development of the hydrogen sector is less heavily centred around the initial creation of individual hubs. It anticipates long-distance deliveries of renewable hydrogen from regions with favourable conditions — especially the North and Baltic Sea coastal areas — to industrial clusters further south from early on. A first 400km stretch of pipelines from Lubmin on the Baltic Sea coast to an industrial hub north of Leipzig is due to be ready for hydrogen transport by late 2025.
France's electricity mix is largely decarbonised — owing to the country's large nuclear fleet — and this will allow for low-carbon hydrogen production using grid-connected electrolysers as close as possible to consumers, CRE said. The low-carbon power mix means that "there is little point in concentrating production at very large, remote sites" in locations where conditions for renewable electricity generation are particularly favourable, the regulator said.
