The Policy Framework for the Promotion of Hydrogen and Fuel Cells in Europe: a Critical Assessment. Bruges European Economic Policy (BEEP) Briefing 19/2008

This paper reviews the current EU policy framework in view of its impact on hydrogen and fuel cell development. It screens EU energy policies, EU regulatory policies and EU spending policies. Key questions addressed are as follows: To what extent is the current policy framework conducive to hydrogen and fuel cell development? What barriers and inconsistencies can be identified? How can policies potentially promote hydrogen and fuel cells in Europe, taking into account the complex evolution of such a disruptive technology? How should the EU policy framework be reformed in view of a strengthened and more coherent approach? The paper concludes that the current EU policy framework does not hinder hydrogen development. Yet it does not constitute a strong push factor either. EU energy policies have the strongest impact on hydrogen and fuel cell development even though their potential is still underexploited. Regulatory policies have a weak but positive impact on hydrogen. EU spending policies show some inconsistencies. However, the large scale market development of hydrogen and fuel cells will require a new policy approach which comprises technology specific support as well as a supportive policy framework with a special regional dimension.

EU Policies and Cluster Developments of Hydrogen Communities. Bruges European Economic Research (BEER) Papers 14/December 2008

This study takes on the issue of political and socio-economic conditions for the hydrogen economy as part of a future low carbon society in Europe. It is subdivided into two parts. A first part reviews the current EU policy framework in view of its impact on hydrogen and fuel cell development. In the second part an analysis of the regional dynamics and possible hydrogen and fuel cell clusters is carried out. The current EU policy framework does not hinder hydrogen development. Yet it does not constitute a strong push factor either. EU energy policies have the strongest impact on hydrogen and fuel cell development even though their potential is still underexploited. Regulatory policies have a weak but positive impact on hydrogen. EU spending policies show some inconsistencies. Regions with a high activity level in HFC also are generally innovative regions. Moreover, the article points out certain industrial clusters that favours some regions' conditions for taking part in the HFC development. However, existing hydrogen infrastructure seems to play a minor role for region's engagement. An overall well-functioning regional innovation system is important in the formative phase of an HFC innovation system, but that further research is needed before qualified policy implications can be drawn. Looking ahead the current policy framework at EU level does not set clear long term signals and lacks incentives that are strong enough to facilitate high investment in and deployment of sustainable energy technologies. The likely overall effect thus seems to be too weak to enable the EU hydrogen and fuel cell deployment strategy. According to our analysis an enhanced EU policy framework pushing for sustainability in general and the development of hydrogen and fuel cells in particular requires the following: 1) A strong EU energy policy with credible long term targets; 2) better coordination of EU policies: Europe needs a common understanding of key taxation concepts (green taxation, internalisation of externalities) and a common approach for the market introduction of new energy technologies; 3) an EU cluster policy as an attempt to better coordinate and support of European regions in their efforts to further develop HFC and to set up the respective infrastructure.