EC initiates new pilot mechanism to boost hydrogen market

Green Forum
The European Commission advanced efforts to support the European hydrogen market by initiating a pilot mechanism.

This new initiative, established under the recently adopted decarbonized gases and hydrogen package, aims to accelerate investments by providing a clearer understanding of market dynamics for both buyers and suppliers and by facilitating their interactions. Scheduled to run for five years, the pilot will be part of the European Hydrogen Bank.

The hydrogen pilot mechanism will gather, process, and provide access to information on demand and supply of renewable and low-carbon hydrogen and its derivatives. This will enable European buyers to connect with both European and international suppliers. Additionally, it will track and analyze market data on hydrogen flows and prices. The Commission has begun a procurement process to find a service provider to develop an IT platform for this pilot mechanism, with plans to finalize a contract by the end of this year and commence operations by mid-2025.

In Europe, the first large-scale electrolyzers are already being constructed, and initial off-take agreements have been signed. Enhancing demand visibility between suppliers and consumers is expected to expedite final investment decisions and help secure additional off-take agreements. Hydrogen is set to play a crucial role in achieving the Green Deal targets, phasing out reliance on Russian fossil fuels, and supporting the decarbonization and competitiveness of European industry.

The pilot hydrogen mechanism is part of the Commission's broader efforts to establish a European Multiproduct Platform for the joint purchase of strategic commodities, which could eventually include strategic raw materials.

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