The European Union is working on tighter rules to ensure EU funding for hydrogen projects benefits European companies.

What Necessitated The Action

EU’s head of climate change policy said on Monday that it is taking this action after local industries raised concerns over cheap Chinese imports.

The EU will this month launch its next round of funding for green hydrogen projects, as Brussels attempts to kick-start a local industry to produce the fuel.

EU Hardening Its Stance

Meanwhile, the European Union is hardening its stance on other green technologies from China.

It is imposing tariffs on electric vehicles which it says benefit from excessive subsidies.

Warning By European Manufacturers

European manufacturers of electrolysers, machines that use electricity to split water to produce hydrogen, have warned Brussels they cannot compete with cheaper Chinese producers.

Additionally, they want the EU to protect them by adding criteria that would favour local firms to its Hydrogen Bank funding scheme.

Assurance

Climate commissioner Wopke Hoekstra said the bloc’s executive was now working on this.

“I will ensure that the next auction will be different, ”Hoekstra said in a speech in the Netherlands.

He added, “We will have explicit criteria to build European electrolyser supply chains.”

Wopke Hoekstra’s Assurance

He said that guarantee of European cybersecurity and safety and the data of people and companies is essential for companies to get support.

He said that while Europe has a good presence in electrolyser manufacturing, China is oversupplying the market at lower prices.

Hoekstra did not specify whether the rules would ban projects using foreign equipment from receiving the EU subsidies.

What European Union Official Said?

The critreria are still being finalised, an EU official told Reuters.

Notably, the EU awarded 720 million euros to seven EU hydrogen projects in April.

Industry sources told Reuters the low-priced bids from some successful projects indicated that they would be using cheaper Chinese equipment.

The Commission has not disclosed if this is the case.

Significantly, a Commission document accessed by Reuters threw up a crucial finding.

Some Projects Planned Fund Sourcing Outside The European Union

Around a quarter of the projects that bid for the fund planned to source their electrolysers from outside the EU.

Notably, nearly another quarter planned to use a mix of EU and non-EU made equipment.

EU Not Aiming To Cut Ties With China

Furthermore, Hoekstra said the EU was not aiming to cut ties with China,

However, EU would take action where it deemed competition to be unfair.

(With Inputs From Reuters)