Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Some of Europe’s biggest industrial groups are urging Brussels to toughen subsidy requirements to curtail the threat to the region’s hydrogen equipment manufacturers from cheap Chinese imports.
They want “made in Europe” criteria to protect the home industry as equipment from Chinese manufacturers costs less than half the price of those from domestic companies, according to consultancy BloombergNEF.
“European leadership is under acute threat . . . The time has come for a shift in European trade, competition and industrial policy,” wrote 20 manufacturers, including Siemens Energy and Thyssenkrupp Nucera, in a letter to European Commission president Ursula von der Leyen on Monday.
The letter, seen first by the Financial Times, warned that China’s subsidies for its state-owned hydrogen companies had created a “skewed playing field” that put Europe at a “significant disadvantage”.
The move comes as the EU takes a tougher stance towards China, announcing tariffs on electric vehicle imports and trade probes into solar and wind manufacturers.
The US and India have also introduced subsidies to attract manufacturing in hydrogen equipment in the past couple of years.
Green hydrogen, hailed for its potential to decarbonise heavy industry, is produced by splitting water with an electrolyser.
China is the largest manufacturer of the equipment, producing 37 per cent of global supply, followed by Europe, according to the International Energy Agency.
“I don’t want to give up on Europe,” said Håkon Volldal, chief executive of Nel Hydrogen, one of the signatories of the letter. “If we don’t create demand for European technology in Europe, we squander the opportunity for European OEMs [original equipment manufacturers] to win.”
European manufacturers want hydrogen cell units and stacks in electrolysers to be assembled in Europe in the next auction of the EU’s hydrogen bank at the end of the year.
The first auction in April raised concerns among industry and officials after almost a third of projects awarded did not rely on homegrown technology.
Thierry Breton, the bloc’s single market commissioner, called for the auction criteria to be tightened in May.
“I will push to ensure that the next auctions give no possibility for subsidised technologies to unfairly compete with European products, and that European funding effectively leads to decreased dependencies, and not the other way around,” Breton wrote on LinkedIn.
“Everyone wants to see European taxpayers’ money fuelling growth within Europe,” said Werner Ponikwar, chief executive of Thyssenkrupp Nucera, a signatory of the letter.
“If there are no trade barriers, it is very likely that Chinese manufacturers will export a lot to Europe,” added Xiaoting Wang, an energy specialist at BloombergNEF, while cautioning that made-in-Europe provisions could slow deployment and increase costs.
Daniel Fraile, chief policy officer at industry group Hydrogen Europe, supported the letter and called Chinese imports a “big threat”.
While Europe buys few electrolysers from Beijing, manufacturers warn imports are poised to grow as the nascent sector ramps up.
The European Commission has committed to produce 10mn tonnes of renewable hydrogen by 2030 as well as import a further 10mn tonnes as part of its effort to cut greenhouse gas emissions in the bloc by 55 per cent by the same date.
Additional reporting from Shotaro Tani in London
