Fossil fuel industry given billions in EU hydrogen support, report finds

In Italy, fossil fuel companies met over a hundred times with ministers and civil servants, helping to quadruple financial support for the sector, a new report claims.

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Image Credit: Carnegie Europe

Over €8 billion is being invested in hydrogen and “renewable gas” projects in southern Europe using EU Covid-19 recovery funds, thanks to extensive lobbying by the fossil fuel industry, a new report has found. 

The research warns that backing for the supposedly green developments has “thrown a lifeline” to fossil fuel companies, despite pledges by the European Commission to pursue a low-carbon transition.

EU officials have said they are eager to avoid repeating the same mistakes made during the 2008 financial crisis, when billions of euros of public money was used to bail out fossil fuel companies.

But the report says the sector has managed to secure support in France, Spain, Italy and Portugal for the development of hydrogen and renewable gases such as biomethane, whose potential critics argue is being wildly exaggerated.

The European Network of Corporate Observatories and Fossil Free Politics, the campaign groups which produced the report, entitled  ‘Hijacking the recovery through hydrogen: how fossil fuel lobbying is siphoning Covid recovery funds’, put this down to fierce industry lobbying

Hydrogen placed ‘at the center’ of the recovery

In Italy, fossil fuel firms had over a hundred meetings with ministers and civil servants between July 2020 and June 2021, while hydrogen funding rose from an initial €1 billion to over €4 billion in different draft proposals between December 2020 and May 2021. As a result, Italy plans to spend more of its EU recovery funds on hydrogen and renewable gases than intensive care units, the report found. 

In Spain, the Spanish Confederation of Employers and Industries of Spain, a business lobby group, secured almost €1.6bn for the “Spanish Hydrogen Roadmap”. This is almost 50 percent more than the €1.1 dedicated to improving Spain’s health system, the researchers claim. Further hydrogen projects that are also eligible for funding from other pots of money are worth €17.8 billion. 

Key aspects of the industry’s hydrogen-heavy recovery strategy were taken up by the French government, while in Portugal the industry was invited to draft and implement the country’s national recovery plan.

Pascoe Sabido, a researcher and campaigner at Corporate Europe Observatory, said the findings came as no surprise, given the efforts of industry groups, such as Hydrogen Europe, to pressure policymakers into supporting the sector. 

“The fossil fuel industry has been furiously lobbying to make sure hydrogen and renewable gases like biomethane are supported by EU recovery funds. Looking at France, Italy, Spain and Portugal, you can see the industry has been incredibly successful: their plans have put hydrogen at the center,” he said. 

“That means billions of taxpayers’ money intended for a ‘green recovery’ are to go into the pockets of the same dirty industry that’s caused the climate crisis, ” he added.

Lala Hakuma Dadci, coordinator of the Fossil Free Politics campaign, warned that the investments could slow down Europe’s transition away from fossil fuels and said the industry should be kept out of public decision-making processes, similar to restrictions placed on tobacco companies. 

“The over-emphasis on hydrogen as a result of lobbying could lock Europe into decades more of fossil fuels. For a fossil free recovery, we need fossil free politics,” she said.

Disputed definitions

Part of the problem is a lack of an agreed understanding of what is and isn’t green, the report says, with each country using the term in different ways..

At the same time as exploiting this lack of clarity, the hydrogen industry has been “hyping” the potential of the energy source to cut emissions, the report argues. That leads to a situation where demand outstrips supply of “green hydrogen”, produced using renewable energy, ensuring a reliance on the “blue” variety, produced using fossil gas. While blue hydrogen involves carbon capture and storage technology, not all emissions are able to be captured and leaks of the powerful planet-heating gas methane are possible. 

“Let’s not kid ourselves – the likes of Shell and Eni have made it crystal clear that they see a move towards a hydrogen economy as a way to keep pumping oil and gas”, Sabido said. 

Shell has stated that large volumes of blue hydrogen, which does not guarantee that all emissions are captured, will be needed in the future, given a lack of renewable energy needed for green hydrogen. 

When contacted, Shell pointed to information on its website about its development of hydrogen and noted a project it recently launched in Germany that it said will produce 1,300 tonnes of green hydrogen per year.

A spokesperson for Hydrogen Europe rejected the report’s findings, telling DeSmog it had been the target of “repeated defamatory and unfounded statements that try to label the association as an oil and gas ‘lobby’ and promoter of fossil fuels”. 

She said the organization was at the forefront of promoting green hydrogen, an energy source that would contribute to “economic growth, the creation of jobs and a sustainable, affordable and fair energy system”.

Only 19 percent of its 267 members, which cover the full hydrogen supply chain, could “count as ‘fossil’”, she added, while fossil fuel companies are involved in developing 81 percent of all green hydrogen capacity across Europe, which she said showed their commitment to the deployment of the technology.

The European Commission and Eni did not respond to a request for comment by the time of publication.

Updated on 9/7/21 with a response from Hydrogen Europe.

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