EPICO KlimaInnovation has published a new Policy Brief, the second of the series “Electrifying Energy Intensive Industries”, using the results of a workshop focused on accelerating the decarbonisation of Energy-Intensive Industries (EIIs) hosted on 8 May 2025.
Europe’s energy-intensive industries play a vital role in the EU’s economy but also account for a significant share of greenhouse gas emissions. To meet its climate targets and secure industrial competitiveness, the EU must help these sectors transition towards electrified, low-carbon production. On 8 May 2025, EPICO KlimaInnovation hosted a closed-door workshop with representatives from industry, the European Commission, NGOs, and think tanks to explore how EU-level funding can accelerate this transition. The discussion focused on the role of hydrogen as a strategic feedstock and energy carrier for hard-to-abate sectors such as green steelmaking, ammonia production, synthetic fuels for aviation and shipping, and certain high-temperature industrial processes. Participants stressed that hydrogen should not be deployed as a universal energy solution but prioritised where no viable alternatives exist, ensuring public resources deliver the greatest decarbonisation impact.
While the EU has ambitious hydrogen targets under the European Hydrogen Strategy and REPowerEU plan, current production capacity is far from the levels needed, with most hydrogen still fossil-based and only a fraction of projects having reached final investment decision. Regulatory complexity—such as strict RFNBO certification rules on additionality, temporal correlation, and geographical limits—has driven up costs and delayed investment, while policy priorities have sometimes favoured lower-impact applications like road transport and low-temperature heat over breakthrough applications. Infrastructure planning remains poorly aligned with renewable-rich regions, and hydrogen import strategies risk inefficiencies if focused on upstream hydrogen, rather than value-added derivatives or downstream products like green ammonia or hot briquetted iron. Without clearer prioritisation, stronger market signals, and targeted support, Europe risks missing the opportunity to anchor hydrogen where it offers the highest climate and industrial benefits.
WHAT OUR BRIEF PROPOSES:
- Reforming RFNBO certification by delaying additionality and hourly matching requirements to 2035, relaxing geographic sourcing rules, and aligning EU subsidies with global clean hydrogen standards.
- Allowing blue hydrogen in ammonia production where lifecycle emissions are reduced by at least 70%, leveraging existing domestic assets near CO₂ storage sites.
- Ending subsidies for low-impact uses such as low-temperature heat and electrifiable road transport, focusing instead on ironmaking, fertiliser production, and fuels for maritime, aviation, and long-haul freight.
- Pursuing an EU-wide industrial policy that connects renewable-rich regions with industrial hubs through cross-border value chains and shared infrastructure investment.
- Refocusing EU funding towards projects with the highest GHG abatement per euro spent, creating sector-specific allocations, and significantly expanding the Hydrogen Bank’s budget to support strategic industrial decarbonisation.
Read the Policy Brief here.
WHAT’S NEXT:
The final brief in this series will look at how Europe can reduce energy costs for industry, which is essential if hydrogen and electrification low-carbon solutions are to scale successfully. It will examine the structural factors that keep electricity prices high, while also assessing the potential of recent policy and market reforms and identifying cost-effective measures that could ensure energy-intensive sectors gain access to clean, reliable, and competitively priced power. By exploring how faster renewable deployment, better grid connections, more effective contracting models, and targeted support can work together, the brief will focus on practical steps that could make affordable energy a reality for Europe’s industrial transition.
Stay tuned for the concluding chapter of the series.