With the European Union (EU) struggling to meet its green H₂ production goals, the bloc should expand its support to include U.S.-style operational expenditure (OPEX) initiatives that can significantly accelerate its decarbonization efforts, according to IMI Critical Engineering.

Targets set by the European Commission in 2022 aim for 10 MMt of the element to be produced from renewables in the EU by 2030 with another 10 MMt imported, as part of its agenda to reduce GHG emissions. However, following industry comments that the EU’s complex regulations may impede this progress, the Union is being urged to embrace a broader array of generation-based incentives, like those offered by the U.S. Inflation Reduction Act (IRA) to accelerate decarbonization efforts.

“As a zero-carbon fuel, harnessing green H₂ is vital for the EU to reach both its more immediate production goals and its long-term target of net zero emissions by 2050,” said Richard Yu – Director of Business Development, H₂ at IMI Critical Engineering. “Existing support packages on offer, including the Green Deal Industrial Plan and RePowerEU, are extremely welcome in their ambition—especially given the uncertainty global geopolitical events have and continue to have on energy markets. However, more must be done, and developments in the U.S., including the IRA and the nation’s first-ever dedicated clean H₂ strategy and roadmap, offer a clear path that the EU could emulate.

“For instance, the IRA’s H₂ production tax credit, which offers up to $3/kg H₂ for each zero-carbon fuel supplied, demonstrates a level of OPEX support not yet apparent in the EU’s plans, which mainly focus on CAPEX measures. For hard to abate sectors such as cement, steel, aluminum and chemical, as well as the energy-intensive industrial and heavy transport industries, this will enable a faster transition to green fuel use in line with the roadmap.”

According to Richard, the implementation of U.S.-style support will help offset potential obstacles relating to the current lack of large-scale H₂ production infrastructure, including H₂ refilling stations. He cites the development and uptake of decentralized solutions such as the PEM electrolyzer technology, assisted by capex and OPEX initiatives, as a vital first step for organizations looking to power their sites sustainably.

“If businesses are to help realize the EU’s ambitious green H₂ production targets, they cannot stand still and wait for infrastructure to be built,” he concluded. “The fact of the matter is that solutions already exist to provide decentralized, eco-friendly power onsite, in a cost-effective way.

“A new production tax credit model would further encourage take-up of these technologies across multiple industries and applications. If the EU takes this step, it could supercharge what has already been promising, if slow, progress. For organizations looking to immediately implement decarbonization strategies while ensuring energy security for their operations, solutions such as electrolyzer technologies may appeal—especially while grid prices, supplies and mixes are in flux.”