Hydrogen subsidies under three pillar-frameworks: A Europe-United States multi-stakeholder comparison

Arnauld Guillotin, Claire Bergaentzlé, Virginie Dussartre, Thomas Heggarty, Olivier Massol () and Yannick Perez
Additional contact information
Virginie Dussartre: RTE - Réseau de Transport d'Electricité [Paris]
Olivier Massol: LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay, City University of London
Yannick Perez: LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay

Post-Print from HAL

Abstract: Clean hydrogen is pivotal in decarbonisation strategies for industry and transport. It is also foreseen as paramount for decarbonising power systems, with flexible electrolysis easing RES integration. To cover the gap between clean hydrogen costs and consumer willingness to pay, governments have introduced subsidies, of which the European Hydrogen Bank auctions and the US Inflation Reduction Act of 2022 are prominent examples. These subsidies are built upon clean hydrogen regulations, the design of which can affect both hydrogen costs and emissions, as evidenced by recent modelling studies. Yet, these analyses lack a more encompassing, multi-stakeholder viewpoint, and the potential impact of implemented subsidies has received little attention. This work addresses these gaps by jointly considering subsidies for electrolytic hydrogen production with their underlying regulation from a multi-stakeholder perspective, contrasting the EU and US contexts. It qualitatively assesses the performance of both instruments for three main stakeholders: private investors, public authorities, and power grid operators. Results show that both instruments theoretically cover the cost gap, with the scale-up-oriented US framework incurring higher policy costs, while the EU's cautious approach is more effective at revealing information. The analysis shows that differences in requirements, subsidies implemented, but also power system context can significantly impact clean hydrogen emissions and production costs. Finally, this study highlights emerging research needs regarding the potential distortion of electrolyser operational incentives by these clean hydrogen frameworks, which could paradoxically undermine the strive towards net-zero energy systems.

Keywords: Decarbonisation; Clean hydrogen; Hydrogen subsidies; Hydrogen regulation; Electrolysis (search for similar items in EconPapers)
Date: 2025-04
References: Add references at CitEc
Citations:

Published in Renewable and Sustainable Energy Reviews, 2025, 211, pp.115284. ⟨10.1016/j.rser.2024.115284⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04874234

DOI: 10.1016/j.rser.2024.115284

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().