Electrolysers for EU’s proposal to make the EU IAA really effective

The Industrial Accelerator Act (IAA) published on 4 March by the European Commission would have the potential to support the development of the European electrolyser industry - having for the first time proposed to systematically link access to public support mechanisms (auctions, state aid, incentives) to European equipment origin requirements - but its concrete effects will be very limited as it lacks a number of ancillary demand-support policies, which are essential to accelerate the development of the new European industries of the future.

This is claimed by the Electrolysers for Europe coalition, in its position paper “The Industrial Accelerator Act A missed opportunity to strengthen Europe's Electrolyser Industry”, in which the association - born at the beginning of this year at the instigation of six of the industry's major players (ITM Power, John Cockerill, Nel Hydrogen, Sunfire, Thyssenkrupp Nucera and Topsoe) - points out that the regulatory proposal formulated by Brussels with the Industrial Accelerator Act needs significant improvements to have a real positive impact on the electrolyser sector.

Otherwise, i.e. in the absence of such changes, according to the paper, the proposal is likely to produce rather limited positive effects, while increasing compliance costs along the value chains.

Electrolysers for Europe then lists in detail the changes and additions that could enable the Industrial Accelerator Act to become a truly effective instrument in supporting the European electrolyser industry:

1- Ensure that the specific requirements of EU origin (Annex II of the Net-Zero Industry Act) strike the right balance between protecting strategic high value-added components in Europe and maintaining the competitiveness of electrolysers produced in Europe.

2- To respect this balance, remove the reference to the electrolyser as originating in the Union from Annex II, in order to avoid unintentionally including Balance of Plant (BoP) components which, by their nature, are neither strategic nor high added value. Forcing the sourcing of generic BoP components in Europe would artificially increase the costs of European electrolysers compared to non-European ones.

3- Move swiftly to EU-sourced requirements by requiring that 3 of the 4 Main Specific Components (MSCs) - as listed in the Net Zero Industry Act - be of EU origin within one year of entry into force. This would balance the risk of circumvention arising from the unclear definition of the stack as MSC, while maintaining the flexibility to source an MSC outside the EU.

4- Parallel to the IAA, clarify that the origin of the stack must reflect a real European value creation and cannot be satisfied by final assembly alone. This can only be achieved by adopting a binding customs nomenclature for stacks in the forthcoming revision of the EU Customs Code.

5- Limit the geographical scope of EU origin requirements to the EU and EEA, recognising the UK as a reliable partner from day one.

6- Extend EU requirements for hydrogen technologies beyond auctions and manufacturing programmes to include public procurement.

7- Apply EU origin requirements to the 100% of hydrogen auction volumes, in particular considering that Member States may invoke the exemption clause for disproportionate costs.

8- Include hydrogen technologies within the FDI (Foreign Direct Investment) scheme, with a sector-specific threshold of EUR 30 million.

9- Strengthen lead markets for low-carbon steel produced in the EU and extend this approach also to fertilisers.

https://www.hydronews.it/en/the-proposals-of-electrolysers-for-europe-to-make-the-eu-commissions-industrial-accelerator-act-really-effective/