?? Global competition for hydrogen - How the ???? US IRA threatens ????Europe

Competition has broken out between the industrialized regions of the world for investors and their commitment to hydrogen. Mainly between Europe and North America.?

• ???? Europeans are starting to realize their leadership in the energy transition is not as secure as previously believed. They are seeing the profound competition posed by the Inflation Reduction Act (IRA)—and the economic forces it unleashes.

• ?? The IRA as a response to climate change differs fundamentally from the European Union (EU)’s Green Deal.?

• ???? The EU quantifies numerous climate targets to set strict limits on greenhouse gas emissions.?

• ???? But the United States aims to make new technologies that mitigate climate change more competitive than conventional ones.

• ?? In the IRA, tax credits are the primary instrument of climate policy. Renewables and climate-friendly technologies are the main beneficiaries of the IRA, but they are stimulated through market incentives, without paternalism, managerialism, or micromanagement.

• ?? Attached you will find one of the most strategic and clear analysis of the IRA out of EU perspective by Dr Friedbert Pflüger,?managing director of the Clean Energy Forum Foundation (CEF)?

• ?? The EU has been pursuing the goal of a hydrogen economy since the “European Green Deal” announced by Commission President Ursula von der Leyen in 2019 at the latest.

• ?? The Europeans, with their hydrogen strategy, were a few years ahead of the USA, but according to experts, that is now gone.

• ??3??7??0?? billion: The IRA is a huge stimulus program that will allocate nearly $370 billion to green the United States' energy system.

• 3????per KG:?The law provides a uniform state subsidy for the production of green hydrogen: three dollars tax credit per kilogram. This applies across the US.

• ?? One of the EU's responses to the IRA is a "hydrogen bank" that is expected to be up and running later this year. In order to boost the market ramp-up, the H2 bank is to auction state subsidies. As in the IRA, there should be premiums per kilogram of green hydrogen produced, but they should only compensate for the difference between production costs and the market price achieved, so that green hydrogen is competitive with gray H2.

• ?????? Other funds are also available in Europe. 5.2 billion euros were released last year to support H2 projects. 1.5 billion euros are available for companies that focus on green energy. In addition, there are still hundreds of billions from unused corona funds that could be used for green energy subsidies.

• ?????? The US appears to be significantly more attractive, at least for non-EU investors. Norwegian manufacturer Nel announced in May that it would build its new plant in Michigan and not in the EU: There are tax credits from the IRA, as well as extensive support for technology development through the Chips Act, which also comes from the Biden government and on top there are subsidies for sustainable forms of energy in general.

• ?????? The legislative framework in the EU is quite robust, but we are failing to get our own European companies to invest more because everything is too complex.
• There are ambitious targets for the use of hydrogen, but no simple and efficient instruments to offer companies the right incentives. Europe could fall far behind with its typical bureaucracy.