Hydrogen Policy in the EU: Navigating the Union’s Internal Dynamics and Geopolitical Challenges

This chapter discusses the evolution of hydrogen policy in the European Union (EU) and related developments in key Member States. It examines the role of the EU as a global policy frontrunner and zooms in on the key measures used by the bloc to promote a hydrogen economy, with a focus on hard-to-abate sectors. It also analyses how the EU’s institutional nature as a supranational union of 27 Member States affects its emerging hydrogen sector as compared to other major economies. EU policy-making on hydrogen has been challenged by the bloc’s heterogeneity and structural disparities, with Member States having starkly diverging starting points, priorities, and competitive advantages when it comes to the energy transition and green industrial policy. Wealthier and more industrialised Member States have been able to offer generous domestic subsidies for hydrogen, in addition to benefiting from larger amounts of EU-level funding. As a future hydrogen importer, the EU has also put a growing emphasis on hydrogen in its foreign energy and climate policy, even though its hydrogen-related investments in third countries have been relatively limited to date. More recently, the EU, like other major economies, has grappled with the realisation that the green hydrogen economy will take longer to develop than originally anticipated. The persistently high costs of green hydrogen and the difficulties in mobilising demand in key sectors increase the uncertainty about hydrogen’s future role in the EU’s economy and in international trade.