European Hydrogen Bank
Anthi Charalambous, Low Carbon Economy Expert, Director of ideopsis Ltd
Renewable energy and green hydrogen are a fundamental part of the solution to decarbonising the EU’s energy system and reducing energy dependency. To achieve these goals, the European Union has set ambitious targets for the production and consumption of hydrogen and its derivatives by 2030. There is no doubt that renewable and low-carbon hydrogen will become competitive compared to conventional fuels like oil, coal and natural gas, in the long run.
To date (16) sixteen EU Member States have adopted National Hydrogen Strategies, which in total amount to 40 GW of electrolysers capacity by 2030, or 5,6 million tonnes of renewable Hydrogen. The recent Communication (16/3/2023) of the European Commission on the establishment of the European Hydrogen Bank (COM(2023)156), accompanies the legislative proposal of the Commission for a legislative act “Net-Zero Industry Act”, which aims to promote of clean technologies in the EU. The European Commission has proposed a comprehensive legislative framework for production, consumption, infrastructure development and market rules for a future hydrogen market, as well as binding quotas for renewable hydrogen consumption in industry and transport.
The aim of the European Hydrogen Bank is to bridge the investment gap and connect the future supply of renewable Hydrogen, with the target of a demand of 20 million tonnes of renewable Hydrogen. The European Hydrogen Bank will facilitate both the production of hydrogen from renewable sources within the EU and imports, helping to achieve the objectives of the RepowerEU plan and the transition to climate neutrality. Most of the investments in the field of Hydrogen should be covered by private capital. The Climate Taxonomy Delegated Act already channels private funding into activities related to the construction of equipment for the production and use of hydrogen, hydrogen production and storage.
The European Hydrogen Bank is based on four pillars, which will be implemented by the European Commission. It will consist of two new financing mechanisms to support renewable hydrogen production within the EU and internationally. In addition, the Bank provides increased visibility of demand through the connection with buyers, the parallel initiatives of the Member States and the existing data centers. Finally, the Bank will also play a coordinating role and facilitate the combination with existing financial instruments to support Hydrogen projects.
It is worth noting that in Cyprus the first private initiative has been developed for the construction and operation of a pilot plant for the production (150 tons per year), the storage (2 x 500 kg) of “green” hydrogen and a refueling station, which will be used as fuel for transport (heavy-duty vehicles and buses), within the limits of the Municipality of Aradippou, by the company Future Fuels Ltd. This project has been approved for co-financing by the European Union through the Innovation Fund for small-scale projects and officially started on 1st June 2023.