The European Union announced changes to its rules governing auctions for hydrogen grants in an effort to limit EU dependence on China in its renewable energy supply chain, the new terms
China has become a dominant force in solar and electric vehicles, and is increasingly competitive with European wind power producers. The European Commission is taking steps to limit creating a systemic reliance on Beijing with new rules, investigations and possible tariffs on Chinese EVs.
The EU's Hydrogen Bank will run its second renewable hydrogen auction on Dec. 3 to provide up to 1.2 billion euros ($1.34 billion) in grants to new projects.
Earlier this year, the bank allocated nearly 720 million euros to seven renewable hydrogen projects but Europe's industry raised concerns that the winners were relying on cheaper Chinese-made parts.
The EU's climate chief said earlier this month the auction rules would be change to favour local companies.
In the upcoming round, projects cannot have parts sourced from China exceeding 25% of the plant's production capacity.
Chinese production capacity is already more than 50% of global production it is assessed that there is a significant risk of increased and irreversible dependency of the EU on imports of electrolysers originating in China, which may threaten the EU's security of supply," the term sheet said.
The introduction of resilience criteria marks a pivotal moment This bold step, aligned with the Net-Zero Industry Act and the recommendations of the Draghi report, underscores the importance of building a robust European supply chain Hydrogen Europe CEO Jorgo Chatzimarkakis said in a statement.