Clearer information and better matching of supply and demand: EU Commission’s mechanism for hydrogen market development

Brussels – Clearer information on the hydrogen market situation and easier contact between buyers and suppliers. That’s the goal of the pilot mechanism, which the European Commission started working on today (June 3), to accelerate investment in this sector: it will remain in place for five years, will be part of the European Hydrogen Bank, and will collect, process, and provide access to information on the demand and supply of renewable, low-carbon hydrogen and derivatives, enabling European buyers to engage with suppliers both from Europe and outside the Union. It will also collect and process market data on the development of hydrogen flows and prices. In this context, a tender process also started to find a service provider to develop an IT platform to manage the pilot mechanism. “The Commission expects to sign a contract by the end of this year so that it can start its operations by mid-2025,” the EU executive specified.

“By facilitating the match between suppliers and consumers, we will make a decisive contribution to accelerating the development of the nascent European hydrogen sector. At the same time, we continue to take ambitious steps to make the most of Europe’s political and economic clout through the joint procurement of strategic resources,” stressed European Commission Vice President responsible for the European Green Deal, Maros Sefcovic.

The Commission recalled that the first large-scale electrolyzers were already being built in Europe, and the first off-take agreements had been signed. According to Berlaymont Palace, improving demand visibility between suppliers and consumers will help speed up final investment decisions in Europe and secure off-take contracts. “Hydrogen will play an important role in achieving the objectives of the Green Deal, in phasing out Russian fossil fuels, and in supporting the decarbonization and competitiveness of European industry,” the Commission highlighted. In a broader context, therefore, the hydrogen pilot mechanism is part of the Commission’s ongoing work to establish a European multi-product platform for joint procurement of raw materials, which may cover strategic ones in the future.

“This new mechanism will have a key role in boosting a functioning European hydrogen market. Too many projects are still moving toward final investment decisions, and too many buyers are signing contracts to switch to hydrogen. This mechanism will help us better understand and identify where hydrogen supply and demand are emerging,” commented European Energy Commissioner Kadri Simson. “The information that will be available will help us build bridges between European off-takers and hydrogen suppliers both within and outside the EU, preparing the ground for future auctions under the European Hydrogen Bank. It will also enable us to guide the planning and development of the necessary transport infrastructure through projects of common European interest and its financing through the EU’s Connecting Europe for Energy mechanism,” Simson pointed out.