Commission kick-starts work on a new pilot mechanism to boost the hydrogen market

By European Commission

Commission kick-starts work on a new pilot mechanism to boost the hydrogen market

The Commission is taking further steps to support the development of the European hydrogen market by launching work on a pilot mechanism. The new mechanism was created under the recently-adopted decarbonized gases and hydrogen package and aims to accelerate investments by providing a clearer picture of the market situation of both off-takers and suppliers and facilitating contact between them. It will be in place for five years and will be part of the European Hydrogen Bank.

The hydrogen pilot mechanism will collect, process, and give access to information on demand and supply for renewable, low-carbon hydrogen and derivatives, allowing European off-takers to match with both European and foreign suppliers. It will collect and process market data on the development of hydrogen flows and prices. A procurement process has started to find a service provider to develop an IT platform to operate the pilot mechanism. The Commission plans to sign a contract by the end of this year so that it can start its operations by mid-2025.

See also: The pros and cons of hydrogen fuel as a decarbonization instrument | Experts’ Opinions

In Europe, the first large-scale electrolyzers are already under construction and the first off-take agreements have been signed. Improving demand visibility between suppliers and consumers will help accelerate final investment decisions in Europe and contribute to securing off-take agreements. Hydrogen will play an important role in achieving the Green Deal targets, phasing out Russian fossil fuels, and supporting the decarbonization and competitiveness of European industry.

The pilot hydrogen mechanism forms part of the Commission’s ongoing work to establish a European Multiproduct Platform for the joint purchase of strategic commodities, which, in the future, could cover commodities such as strategic raw materials.