The European Union has announced changes to its rules governing hydrogen grant auctions to limit dependence on China for renewable energy components. This move comes as part of the EU’s broader efforts to prevent over-reliance on Beijing, which dominates sectors such as solar power and electric vehicles. The EU Hydrogen Bank’s next renewable hydrogen auction, set for December 3, will offer up to EUR 1.2 billion (USD 1.34 billion) in grants, but new rules will cap Chinese-sourced components at 25% of a project’s production capacity.
The change follows concerns raised earlier this year when EUR 720 million was awarded to seven hydrogen projects that relied heavily on cheaper Chinese parts. The revised rules aim to strengthen European supply chains, aligning with recommendations from the Draghi report, which warned that Europe’s economic competitiveness could falter without a coordinated industrial policy.
Hydrogen Europe CEO Jorgo Chatzimarkakis called this a “pivotal moment,” emphasizing the need to cut bureaucratic red tape, which has been a longstanding complaint from European industries. The EU’s climate chief also supports favouring local companies, in line with the broader goals of the European Green Deal and the Net-Zero Industry Act.