Exploring cost-effective support mechanisms for hydrogen mobility infrastructure

Edoardo Righetti and Christian Egenhofer

CEPS Papers from Centre for European Policy Studies

Abstract: The European Union’s climate neutrality objective will require the progressive decarbonisation of the transport sector, including road. Targets and policies are lowering technology costs and accelerating the deployment of low-carbon vehicles. The rollout of a widespread and reliable refuelling and recharging infrastructure is a condition for these policies and technologies to succeed. In the context of the Alternative Fuels Infrastructure Regulation, the deployment of hydrogen refuelling stations is under discussion and soon to be agreed upon. Most studies predict a considerable number of hydrogen-fuelled vans and trucks, with demand for hydrogen-fuelled passenger vehicles continuing to be subject to debate. Current low market penetration of hydrogen-powered vehicles limits the profitability of the hydrogen refuelling infrastructure. Support mechanisms will be required to ensure stations’ profitability and sustain their deployment. Building on an analysis of the economics of hydrogen refuelling stations and an overview of support measures typically implemented in Europe and beyond in infrastructure development, this report focuses on the cost-effectiveness of instruments in a situation of initial low demand. It identifies mandates and availability payments as the most suitable instruments, allowing the mobilisation of private capital.

Pages: 22 pages
Date: 2022-12
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:eps:cepswp:38567

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