Importing US-produced hydrogen and its derivatives into the EU – examples of unnecessary complications, barriers and distinctions

Abstract

The European Union, like many other nations and governments, is counting on hydrogen to play a big role in the energy transition. The EU has set ambitious import targets for hydrogen. This article will examine and comment on select parts of the EU framework that impact the EU’s plan for importing 10 million tonnes of hydrogen. This framework could have the effect of frustrating trade with third countries. Using the United States as an example of an importer, this article looks at (i) guarantees of origin, (ii) electricity market design, (iii) state aid, (iv) eligible carbon dioxide rules, and (v) the carbon border adjustment mechanism, with a view to ascertaining their effect on imports into the EU. The article finds that the EU framework causes unnecessary barriers to trade and may need to be tweaked to enable trade to fulfil its legislative targets.