France has introduced new measures to support the hydrogen industry following a series of project setbacks that raised concerns about the fuel's role in achieving net zero goals.
The Economy Ministry announced on Wednesday that a tender will be held later this year to subsidise the purchase of hydrogen-powered vans. Additionally, the government will provide backing to electrolyser manufacturer Gen-Hy and several research initiatives, Bloomberg reports.
The European Union and energy companies have promoted clean hydrogen as a solution to reduce emissions across various industries. However, high production costs have led several developers to cancel or postpone their projects, leaving the emerging sector struggling to secure the billions of euros required to make a significant impact.
“The sector faces structural changes, including international competition and rapid progress in alternative decarbonisation approaches. The implementation of solutions to reduce carbon dioxide emissions by hydrogen takes time,” according to the statement by the French ministry. Yet there’s “promising potential for the industry.”
French electrolyser manufacturer McPhy Energy SA recently put itself up for sale due to a cash shortage, while Gaztransport & Technigaz SA halted the construction of an electrolyser factory earlier this year. In addition, last month, Danish company Green Hydrogen Systems A/S announced it would undergo a restructuring process.
Furthermore, back in 2021, President Emmanuel Macron committed €9 billion in subsidies for clean hydrogen. However, the government has recently reduced production targets to align with the slower-than-anticipated progress in the sector.
France remains committed to becoming a top producer of low-carbon hydrogen, capitalising on its renewable energy resources and strong nuclear infrastructure.
By setting more realistic capacity targets, the country aims to create a solid foundation for sustainable growth in the hydrogen sector, ensuring both long-term economic and environmental stability.