A Coordination Action to Prepare European Hydrogen and Fuel Cell Demonstration Projects

Some key findings from the demonstration projects of hydrogen on transport exercise can be named; the limited availability of vehicles, the necessity to define the project follow-up already during the set-up phase, the need for clear responsibilities for the infrastructure installations, the missing of an integrated long-term funding scheme (EU, Member States, regional) as well as the lack of vehicle and infrastructure performance data due to few vehicles and / or missing assessment and funding frameworks.

One of the most significant findings was that most projects have experienced problems in obtaining sufficient numbers of vehicles. (Early) commitment of vehicle industry and potentially bundling of resources is therefore a key especially for future large-scale demonstration projects.

In case of hydrogen refuelling stations it has been recommended that one partner alone should be made responsible for the approval, erection and operation of a station to lower the complexity of the approval procedure and operations process.

Nearly all projects do some kind of project assessment, but the degree of detail differs significantly. Therefore the utilisation of a common tool, the HyLights Monitoring and Assessment Framework (MAF), may be a practical approach or at least a robust basis for future projects.

The interviews with potential early users of hydrogen vehicles basically showed that fleet operators have not started thinking about support schemes for hydrogen or zero-emission vehicles. They are, however, keen on supporting energy efficient vehicles and have for example implemented incentives for vehicles with energy label A and B. Comparable support schemes for zero-emission vehicles can only be implemented if (additional) costs are known. Further analysis on early markets for hydrogen vehicles just based on the evaluation of stakeholder requirements, existing and foreseen support schemes and lessons learned from recent and ongoing demonstration projects is expected not to provide any relevant results on top of what has been found in the context of the HyLights project. As a next step, regions should develop concrete business plans, stating how many vehicles can be deployed at what conditions. This should include tolerance of additional costs and performance requirements.

Policy implications

Hydrogen specific policy support is indispensable to facilitate the market commercialisation of hydrogen vehicles. Beyond about 100 000 produced vehicles, price levels will come down to a level where they can be compensated through a set of existing policy incentives. End-users might still have to pay a premium in comparison to conventional vehicles unless those extra costs are completely allocated by means of policies. Both hydrogen vehicles and hydrogen as a fuel need to be addressed by a policy framework. However, the expected cost gap of 10 eurocent/km can be tackled by means of various existing policy instruments. Countries that already feature high taxation on conventional vehicles are in a better position to introduce or extend tax exemptions for hydrogen vehicles.

Attention at the Member State level needs to be raised urgently to start with the design and implementation of support frameworks to be in place when the JTI financed demonstrations phase out and deployment could face an abrupt halt. Gaps between policy incentives covering different deployment phases need to be avoided.

Stable support frameworks are necessary from an industry perspective to demonstrate long-term commitment for the technology, implying that preferably incentives should be budget neutral and designed in a way that they are little vulnerable to economy measures.

The challenge is to bridge the financial gap between the large-scale demonstrations and the early market phase where the cost gap is too large to be covered by means of policy support. In order to deploy the first 100 000 vehicles, regions committed to hydrogen need to emerge as early market for vehicles with the accumulated demand within a constraint area that can be supplied by limited infrastructure. Therefore regions or municipalities in liaison with relevant industry stakeholders have to position themselves and come up with a viable plan on how to introduce numbers of vehicles, which segments and how to cover finance over a period of time.

Infrastructure is a serious problem since Europe has not regulated its supply. In the absence of national infrastructure support, regions should account for necessary infrastructure in their business plans. Finally, the regional activities should raise attention at national governments to implement complex support schemes for vehicles, fuel and infrastructure.