France Authorizes Import of Green Hydrogen for the First Time

In a significant policy shift, the French government has, for the first time, acknowledged the possibility of importing decarbonized hydrogen. This marks a departure from its previous emphasis on domestic production through electrolysis capacity deployment. The government maintains its course toward achieving 6.5 gigawatts (GW) of electrolysis capacity by 2030, with an additional target of 10 GW by 2035.

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The new hydrogen development strategy, released last week, introduces a more "open to the world" approach, recognizing the potential benefits of importing decarbonized hydrogen in addition to domestic production in an open economy. The shift comes amid growing support for hydrogen import strategies from various European neighbors.

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The Ministry of Energy Transition clarifies that the intention is not to replace domestic production but rather to regulate hydrogen imports, aligning with the preferences of many European countries. The move reflects an understanding that France may not be able to produce all the hydrogen required for decarbonizing sectors such as aviation, industry, and maritime transport solely through domestic means.

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Industry stakeholders view this change positively, acknowledging the pragmatic approach to address the substantial hydrogen quantities needed for various applications. However, concerns are raised about the impact on competitiveness, with some emphasizing the potential deviation from the European plan's goal of energy sovereignty.

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To assess the feasibility and modalities of hydrogen importation, the government has commissioned several administrations to prepare a report, considering all financial aspects. Additionally, the focus is on developing hydrogen transport infrastructure, with a priority given to connecting industrial zones producing hydrogen through approximately 500 km of pipelines.

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France maintains its target of installing 6.5 GW of electrolysis capacity by 2030 and introduces an even more ambitious goal of reaching 10 GW by 2035. To kickstart this initiative, the government plans to launch a call for tenders in early 2024 to build 1 GW of capacity. Similar to solar or wind projects, successful bidders will be guaranteed a purchase price for their decarbonized hydrogen over ten years, with the government compensating the producer for the price difference. A subsidy package of €4 billion is allocated for this program.

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The roadmap beyond this ambitious target remains unclear, and industry representatives stress the importance of recognizing hydrogen producers as highly electricity-intensive entities, advocating for access to EDF's nuclear electricity at a highly competitive rate for long-term sustainability.