Many were surprised when President of the European Commission Ursula von der Leyen announced the establishment of the European Hydrogen Bank in her State of the Union speech on 14 September 2022. In her speech, she declared that the instrument would be a flagship initiative for the upcoming year and would be endowed with €3 billion from the Innovation Fund to guarantee the purchase of hydrogen. The speech did not specify a detailed design or policy objectives. However, later statements by high-ranking European Commission officials clarified that the European Hydrogen Bank’s goal will be to contribute to the achievement of producing 10 million tonnes of green hydrogen domestically (i.e., within the EU) by 2030, as well as importing an additional 10 million tonnes from outside the EU, as laid down in the RePowerEU plan.
Considering the broader EU policy framework, including the European Hydrogen Strategy, the RePowerEU plan and the Green Deal Industrial Plan, the European Hydrogen Bank’s primary objective is to ensure sufficient availability of hydrogen and its derivatives across the EU and kick-start the market uptake of hydrogen production and applications in the EU.
The European Commission currently intends to establish a two-pillar approach to the European Hydrogen Bank. One pillar will account for the different design requirements of support schemes incentivising domestic EU-wide production of hydrogen and the other pillar focuses on securing imports of hydrogen or its derivatives.
Assuming the two-pillar set-up, this paper contributes to the current debate around potential design choices for the European Hydrogen Bank.
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