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Part 2

Hy-Politics – political considerations shaping the evolution of clean hydrogen policy

Summary of the use case in France

Two use cases for hydrogen described earlier in this chapter (i.e. industry and transportation) are already in the process of implementation in France. In addition, on 10 September 2020, the French Government unveiled a €7bn national strategy for carbon-free hydrogen, setting out three core objectives:

  • to install enough electrolysers to make a significant contribution to the decarbonisation of the economy;
  • to develop clean mobility, particularly for heavy vehicles; and
  • to foster the development of a H2 industrial sector in France, creating jobs and guaranteeing France’s technological expertise.

In February 2023, it was announced that this support would be supplemented in the France 2030 investment plan by €1.9bn additional support of which 

  • €1.7bn will be devoted to strengthening the Hydrogen IPCEI, bringing the total envelope to €3.275bn, to support the 22 projects pre-selected by France; and 
  • €200m will be dedicated to a call for projects for the deployment of hydrogen ecosystems, following the call for projects launched in October 2020.
Examples of demonstration/feasibility projects in France
HysetCo manages a fleet of 600 hydrogen taxis in Paris and also provides hydrogen refuelling points. It is a joint-venture set up by taxi company STEP (Hype), Toyota France, hydrogen specialist Air Liquide and energy provider Idex. Three stations are now accessible in France, with two additional planned stations.
Two other French industrial giants, Engie and Air Liquide, announced a commercial-scale hydrogen project named “HyGreen Provence” in December 2019. This project will be co-developed in consortium with the urban community of Durance, Luberon and Verdon. The consortium’s intention is to develop and build greenfield solar farms big enough to power 450,000 homes in France’s Provence region, with enough electricity left over to produce hydrogen by electrolysing water and store it in salt-cavern storage sites. The hydrogen produced would be:

> sold to refineries and chemicals makers in the city of Fos-sur-Mer, curbing their emissions of carbon dioxide; and

> used to fuel local fleets of electric buses and trucks.

The project would be connected to the gas grid. The intention is to ramp up its electrolysis capacity to as much as 250 megawatts by 2026, and produce about 20,000 tons of clean hydrogen each year.
Hympulsion/Zero Emission Valley ("ZEV"): this public-private partnership, involving Engie, Michelin, Crédit Agricole and Banque des Territoires (51%) and the Auvergne-Rhone-Alpes Regional council (49%), is France's first (and largest) renewable hydrogen-driven mobility project for professional captive fleets (1200 vehicles, 20 stations and 3 electrolysers capable of producing hydrogen in situ). Its stated objective is to provide renewable hydrogen for transportation at an overall cost that is on a par with diesel, and took a major step forward on 18 June 2020 with the award of equipment contracts. The public-private structure illustrates the role public support can play in enabling the roll-out of pilot projects involving green hydrogen, which is far more expensive than the grey hydrogen that accounts for almost all commercial use and emits CO2 in the methane-reforming process.

 

Part 4

Hy-Achieving – creating a suitable incentive regime

France, which is currently concentrating its climate change efforts on nuclear energy generation, does not seem to need hydrogen as much as the EU’s most supportive Member States (such as the Netherlands, Germany, Austria, Italy, Spain and Portugal).

However, this is changing. The former Minister for Ecological and Solidarity Transition, Elisabeth Borne, explained during a hearing at the Senate in mid-February 2020 that “it is very important for France to position itself on this technology of the future. We have a very broad ambition on green hydrogen for industry, mobility, but also for storage”. She also mentioned, on several occasions, the possible use of hydrogen as a fuel in aviation.

In addition, in mid-June 2020, the energy ministers of France, Austria, Belgium, Germany, Luxembourg, the Netherlands and Switzerland urged the European Commission to set targets for renewable hydrogen until 2030 and to increase its financial support for this technology. The countries called on the EC to develop a roadmap with objectives for decarbonising the energy sector by focusing on so-called green hydrogen.

Furthermore, the French Finance Minister Bruno Le Maire recently announced, as a result of the Covid19 crisis that “in the stimulus package, we will massively invest in research and production of hydrogen in France”, adding that it “may be the new energy” that will power trucks and trains.

On 10 September 2020, the French Government unveiled a national strategy for carbon-free hydrogen, setting out three core objectives:

  • to install enough electrolysers to make a significant contribution to the decarbonisation of the economy;
  • to develop clean mobility, particularly for heavy vehicles; and
  • to foster the development of an H2 industrial sector in France, creating jobs and guaranteeing France’s technological expertise.

This strategy initially allocated €7.2bn for the period up to 2030.

The French Government defined three priorities:

1st priority: to decarbonise the industry by creating a French electrolysis sector

The strategy considers electrolysis as the most promising among the various existing technical processes. France aims to install 6.5 GW of electrolysers by 2030. To achieve this, the strategy proposes ways to develop high-capacity projects thanks to visibility on demand and to move to industrial scale to achieve profitability.

On the other hand, the strategy aims at decarbonizing industry by replacing carbon-based hydrogen, particularly in the production processes based on fossil fuels to decarbonize this hydrogen. The potential for decarbonization is significant for refining, a growing market for desulfurizing fuels, in the chemical industry with the production of ammonia and methanol, and in certain sectors such as electronics and food processing, which use hydrogen in smaller quantities. 

2nd priority: to develop heavy mobility using decarbonised hydrogen

According to the French Government, the hydrogen sector represents a major economic challenge with a turnover of more than €100bn and 225,000 jobs. It is a dynamic market calling for technological solutions superior to those of batteries. The strategy thus offers tools to produce reliable vehicles for companies, to have high-performance and upgradeable equipment, and to have the skills to produce and maintain the vehicles.

In this respect, two calls for projects will be launched by the end of 2020:

  • the first call for projects, "Technological Bricks and Demonstrators", has been allocated a budget of €350m. Its specifications were approved by the Government on 6 October 2020. It aims to develop or improve components and systems related to hydrogen production and transportation.
  • the second call for projects, "Territorial Hydrogen Hubs", has been allocated a budget of €275m and was officially launched on 13 October 2020 by the ADEME (a French State agency responsible inter alia for the development of innovative projects). It aimed to invest in localised hydrogen ecosystems, associating hydrogen production and/or distribution infrastructures with use cases (in particular industrial, mobility and energy storage). This call for projects is now closed but will soon be relaunched, with the support of France 2030 to the tune of €200m, which completes the annual funding by the Ministry of Energy Transition of €50m.

3rd priority: to support research, innovation and skills development in order to promote the use of tomorrow's technologies

The strategy proposes a set of tools to support hydrogen research and innovation. To this end, a priority research programme "Hydrogen Applications" operated by the French National Research Agency was set up. This €80m programme aims to support research and the preparation of the future generation of hydrogen technologies (batteries, tanks, materials, electrolysers). Several of its actions were launched in the summer of 2021, notably on the fuel cell and hydrogen storage. Several complementary initiatives are underway in other areas.

The strategy also aims to develop skills by supporting the campus development of trades and professional qualifications.

Hydrogen-related projects have also been supported via France recovery (Relance) schemes, and via France 2030:

  • R&D funding for the hydrogen aircraft via CORAC;
  • The deployment of hydrogen trains, which became a reality in the territories in April 2021, with the order by the Bourgogne Franche-Comté, Auvergne Rhône-Alpes, Grand Est and Occitanie regions for 12 dual-mode trainsets to be supplied by Alstom.

Hydrogen was presented as an R&D priority in France’s 2018 multiannual energy programme (programmation pluriannuelle de l’énergie or “PPE”), the country's energy roadmap for the coming decade.

Measures for promoting hydrogen mentioned in the PPE are as follows:

  • set up a €50m/year support for clean hydrogen and launch calls to call for projects on mobility and on hydrogen production using electrolysers;
  • set up a traceability system for clean hydrogen in 2020;
  • extend the extra depreciation measure on the purchase of hydrogen vehicles under at least the same conditions as for NGV (heavy vehicles>3.5t);
  • mobilise financial institutions (private and public financing, including the Caisse de Dépôts et Consignations (CDC) and Bpifrance) and standardise co-financing models for projects which deploy ecosystems that pool various uses (mobility, industry, etc.) at the local level;
  • conduct discussions with all players on simplifying and harmonising the licensing and certification procedures for boats and associated hydrogen fuelling solutions; and
  • continue support for innovation, in particular to support industrialisation and scale-up of French stakeholders.

"France 2030" investment plan aims to make France the world leader in green hydrogen and provides for a reinforcement of €1.9bn for the development of the hydrogen sector:

  • €1.7bn will be devoted to strengthening the Important Project of Common European Interest on hydrogen (PIIEEC/IPCEI), bringing the total envelope to €3.275bn. This should allow for greater support for the 22 projects pre-selected by France, but will not cover all the needs. Additional funding from France 2030 (notably dedicated to decarbonization), and regional co-financing could be sought.
  • €200m will be dedicated to a call for projects for the deployment of hydrogen ecosystems, following the call for projects launched in October 2020.

France will devote more than €3bn in public support to the first IPCEI on hydrogen, "Hy2Tech", through the recovery plan and the France 2030 investment plan. 10 of the 41 selected projects are French, making France the most represented country of this first IPCEI. The projects will be located in 7 regions and will create nearly 5,200 direct jobs. More than €2.1bn in development aid are dedicated to these 10 projects. This sum is in addition to the €3.2bn of investment by private players in France. This aid is focused on developing the industrial supply of equipment for carbon-free hydrogen and will enable: 

  • The construction of four gigafactories of electrolysers, throughout the country (representing up to 40% of the European electrolyser market by 2030);
  • The establishment of production sites for hydrogen tanks, fuel cells for sustainable mobility, hydrogen trains and utility vehicles; and
  • The production of materials necessary for the production of this equipment. 

On 8 November 2022, the French President asked the Minister of Industry and the Minister of Energy Transition to draw up a new national hydrogen strategy, which aims to deploy hydrogen hubs on all the major industrial platforms with a view to pooling production for industrial uses. This strategy should be developed by June 2023 and will also tackle the competitiveness of hydrogen production based on electricity from the national grid, either through the use of long-term contracts for the supply of electricity to the electrolysers or through price support to help deploy to help deploy production capacity. A budget of more than €4bn is planned for this purpose, in addition to the IPCEI funding.

At the European level, the French Minister for Energy has been calling on the European Commission to include low carbon hydrogen in the EU's hydrogen strategy. As such, France has been supporting the inclusion of nuclear power energy in the energy sources eligible to produce “green” hydrogen. Moreover, France has been advocating for the inclusion of low-carbon hydrogen - produced from nuclear electricity - in the renewable hydrogen development targets. 

 

Part 5

Hy-ly Volatile? making it safe, sustainable and transportable

On 8 November 2019, France adopted a law on energy and climate which contains several provisions relating to hydrogen.73  This law gives hydrogen legal status for the first time in France, as until then hydrogen was mostly considered as a chemical product.

On 17 February 2021, France adopted an ordinance74 in order:

  • to define the terminology of the different types of hydrogen according to the energy source used for its production (renewable, low-carbon or carbonised hydrogen);
  • to allow the production, transport, storage and traceability of renewable or low-carbon hydrogen; and
  • to define a support framework applicable to hydrogen produced from renewable energy or by electrolysis of water using low carbon electricity.

Hydrogen refuelling points qualify as classified facilities for the protection of the environment (installation classée pour la protection de l'environnement or “ICPE”), which results in a specific regulatory treatment for these facilities. 

Footnotes

Key Contacts

Australia  •  Belgium  •  China  •  The EU •  France  •  Germany  •  Italy  •  Japan  •  The Netherlands  •  Poland  •  Portugal  •  Spain  •  The UK  •   The U.S.
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