EU Aims to Block Chinese Hydrogen Tech in New Auction Guidelines

(Bloomberg) -- The European Union will take steps to exclude Chinese manufactured hydrogen electrolyzers from an upcoming auction aimed at spurring the use of the fuel during the bloc’s green transition.

The European Commission, the bloc’s executive arm, will conduct a second wave €1.2 billion auction through its hydrogen bank from Dec. 3, according to a statement Friday. The process will include new “resilience requirements” to help stave off Chinese competition in the nascent energy sector.

Winning projects will have to limit the sourcing of electrolyzer stacks from China to not more than 25% of total capacity, the new guidelines stipulate. Chinese production capacity is already more than half of global production, far surpassing the growth in global demand, they note.

Europe has stepped up protection of its clean tech sector from Chinese competition, which already dominates the market in solar panels and batteries and is threatening the region’s lead in other sectors, like wind and hydrogen. 

The new measures are part of an effort to introduce so-called non-price criteria — such as emissions and cyber security — to the auction process in a bid to favor local production. Similar measures were adopted earlier this year under the Net Zero Industry Act.

The commission on Friday also opened a public consultation on a methodology defining low-carbon hydrogen.

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