The role of clean energy subsidies and support mechanisms for hydrogen
The clean hydrogen industry is currently in the early adoption and market introduction phase. The various end uses of hydrogen may be more or less mature, but overall, this is where the industry is today.
Today and for the next 5-10 years, any hydrogen project requires public financial support to achieve economic viability. This is what governments have understood in Europe, the United States and Canada, as well as in major other countries (China, India, Japan, Australia, etc.). Various mechanisms have been deployed, or are being deployed, to support the emergence of the industry.
The ultimate goal of these support mechanisms is to enable the industry to generate sufficient business volumes to trigger a significant cost reduction through the learning effects well known to economists. Once this progress has been made, the hydrogen industry will be able to live economically with decreasing support.
For the moment, it is essential to build projects by taking into account the public financing mechanisms available. They are multiple and the situation may seem complex. Indeed, the programs can be of different natures:
- Tax incentives,
- Generic R&D and innovation support programs,
- Programs linked to target sectors (city, buildings, agriculture, etc.),
- with in particular Programs linked to the decarbonization of transport, which deserve a separate mention due to the weight of the sector in energy consumption and its almost total dependence on oil,
- Programs related to the decarbonization of energy production.
These funding opportunities must be understood with sufficient finesse from the project preparation stage, as it must be included to build a good economic evaluation of the project. Once funding is in place, many of these programs require monitoring, even measurement, and reporting.
Feel free to contact us for assistance in evaluating the applicability of the programs to your projects and the financial arrangements.
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