In the week that toute EU left the Brussels’scene for Holidays or the Olympics, the European Court of Auditors published its ”Special report 11/2024: The EU’s industrial policy on renewable hydrogen” on July 17, 2024. Based on the main EU Hydrogen policy documents, the Euroepan Hydrogen Strategy and REPowerEU plan, which included EU targets for hydrogen production and import,  total EU funding for hydrogen‑related projects is currently estimated at €18.8 billion. the ECA concluded that the Commission was only partially successful in creating the right conditions for the emerging hydrogen market and associated value chain. Although he legal framework has been swiftly adopted, a number of challenges remain. One of the main recommendations is that future strategic choices should be based on a reality check – making strategic choices going forward without creating new strategic dependencies.

Other interesting ECA observations:

no. 101: Looking at hydrogen production (see Annex XIII), we found that the majority of projects that have been announced as being at an advanced stage or in the feasibility study stage (61 %, data of the International Energy Agency) are concentrated in four member states⁵². These four member states produce a significant share of the EU’s total greenhouse gas emissions from hard-to-decarbonise industry. Moreover, we identified the following.

• Among the six member states with a significant share of hard-to-decarbonise industry, Poland in particular does not yet have any major-sized projects (in GW) that are at an advanced or feasibility study stage, nor is it among the biggest recipients of EU funds for hydrogen-related projects.
• Of the other 21 member states (i.e. those with a less significant share of hard-to-decarbonise industry, but which may also have future needs for energy storage and renewable hydrogen-based fuels), only seven have planned projects (as per data of the International Energy Agency). Among those seven are nearly all those with good or high potential for renewable energy production. The exception is Romania: it has good potential for renewable energy production but does not have any projects at an advanced stage or in the feasibility study stage.
• As these 21 member states only have a few projects, they have consequently received little or no funding from the Innovation Fund. Most of these countries only earmarked small amounts for renewable hydrogen under the RRF (see Annex XI). It is therefore not known whether or when these projects will be implemented.

As for Hydrogen distribution Network developments the ECA audit found:

no. 102 Looking at the hydrogen network (see Annex XIV), we found that around 90 % of the projects in the feasibility study stage (in terms new pipelines to be built) are concentrated in four member states⁵³. These four member states produce a significant share of the EU’s total greenhouse gas emissions from hard-to-decarbonise industry. Moreover, we identified the following.

• Of the six member states with a significant share of hard-to-decarbonise industry, all but Poland have projects that are in the feasibility study stage, but some member states are more advanced than others (see examples from the Netherlands and Germany in Box 5). Member states have only earmarked small amounts for hydrogen networks under the RRF.

• Of the other 21 member states, several have no projects in the feasibility study stage. In particular, south-eastern EU member states do not yet have any projects of common and mutual interest. Of those countries with good or high potential for renewable energy production, only Portugal had projects in an advanced stage or that already had a feasibility study (as of October 2023). Moreover, none of the countries has earmarked RRF funding for their networks.
• Projects of common and mutual interest can apply for funding under the Connecting Europe Facility-Energy. As hydrogen projects are mostly at an early stage the facility is likely to mainly finance feasibility and technical studies in the next few years. National funding will be necessary for other project stages. Annex VII shows the infrastructure as planned under the projects of common and mutual interest and the IPCEI Hy2Infra.
• The low amount of EU funding allocated for the network tallies with the national hydrogen strategies, most of which provided few or no details on infrastructure. We analysed the draft NECPs available as of 31.12.2023 for the three of the four⁵⁶ member states we visited, plus another five (Belgium, Czechia, France, Italy and Romania). We found that all but Romania refer to hydrogen infrastructure and, in particular, to the projects of common and mutual interest. However, four of these eight member states (Czechia, Spain, France and Romania) provided little or no information on how they expect the infrastructure to be financed.