Campaigners warn EU over funds for hydrogen infrastructure

Environmental campaigners have attacked a critical part of the EU’s plans to green its energy supply, describing a register of almost 150 projects proposed for special treatment as a “wish list” for oil and gas majors.

The “Projects of Common Interest” draft document, which features 149 activities earmarked for better access to billions of euros of funding and prioritisation by policymakers, is set to be debated by officials from the European Commission and EU member states later on Wednesday.

However, while almost half of the projects involve seemingly low-emission hydrogen energy, campaigners claim that many of those that made the list risk keeping existing fossil fuel pipelines in place.

Frida Kieninger, director of EU affairs at Food & Water Action Europe, an environmental group, described the selection as a “wish list coming true” for the fossil fuel industry.

“A fossil gas pipeline going from A to B with a certain size and a certain route is designed for transporting gas via a certain route,” Kieninger said. “It’s not necessarily what would work for hydrogen.”

Dominic Eagleton, senior campaigner at Global Witness, echoed her remarks, saying that subsidies could be “handed to rich fossil fuel companies to maintain polluting gas infrastructure”.

The document, which has been seen by the Financial Times, must still be signed off by the European Commission, which will make a final decision in November.

New projects are selected for Projects of Common Interest, or PCI, status every two years. The schemes, which are entitled to apply for a pot of €5.4bn worth of EU funds, must be deemed as crucial to the bloc’s energy security and decarbonisation goals.

Hydrogen energy is created through breaking water particles apart in a process known as electrolysis. The process can be powered by renewable energy — dubbed green hydrogen — or fossil fuels.

The process is seen as a crucial to decarbonising sectors such as chemical and steel production. But its use is contested by some environmentalists who believe that it is an inefficient way to transfer energy.

They also argue that it offers an opportunity for gas companies to continue producing fossil fuels with the promise that the infrastructure can be used for hydrogen in future.

Ghassan Wakim, production and export director for zero-carbon fuels at the NGO Clean Air Task Force, said claims that gas pipelines could be made “hydrogen ready” were unproven.

“The material that you need to line the pipe varies a lot between what you need for natural gas and what you need for hydrogen,” he said, adding that compressors that pressure gas through the pipes would need to be reconfigured or “completely replaced”.

But Minh Khoi Le, head of hydrogen research at Rystad Energy, a consultancy, said building hydrogen pipelines from the ground up would “take time and cost a lot more money compared to refurbishing existing infrastructure”.

The European Network of Transmission System Operators for Gas, which enables the submission of projects via its 10-year plan for network development, said that schemes had been chosen to help meet EU hydrogen targets and to “enable cross-border flows”.

The commission declined to comment on the PCI list.

This year’s selection comes after a revision of PCI criteria in 2022 to focus on projects that “contribute to the EU’s energy and climate goals” and “facilitate the integration of energy from renewable energy sources”, according to the commission.

Maroš Šefčovič, the EU’s Green Deal climate law chief, said the EU’s first auction of €800mn of subsidies to hydrogen producers would take place in November.

The auction, which is distinct from the PCI list, would “have an impact on how to adjust the infrastructure and where to direct the eventual production [of hydrogen] in the EU or import from third countries”, he said.

Other PCIs selected on the draft focus on grids, electricity connections and offshore interconnectors.

The discussion of PCIs follows the publication of several reports by the European Commission on Tuesday showing that the EU has cut greenhouse gas emissions by a third since 1990.

But the reports warned that current emissions projections from member states showed that the bloc “needs to significantly pick up the pace of change” and particularly cut emissions in the transport, buildings and agriculture sectors.

Additional reporting by Shotaro Tani