Europe’s green hydrogen production costs could be significantly reduced by lowering electricity grid charges, taxes and levies imposed on electrolyser operators, reported Gas World, citing Hydrogen Europe.
The report, Clean H2 Monitor, found that electricity-related charges vary considerably across European Union member states, adding as much as 5.30 euro per kg to hydrogen production costs in some countries. It also warned that these costs could increase as investments in electricity grid infrastructure expand.
Poland has the highest additional cost, with network charges contributing 1.80 euro per kg and taxes and levies adding another 3.50 euro per kg. This takes the total additional burden to 5.30 euro per kg.
France, by comparison, has the lowest additional charges at just 0.10 euro per kg. Germany, Sweden, Spain and the Netherlands also have relatively low electricity-related costs. Together, these five countries account for nearly 80% of Europe’s electrolyser construction pipeline, the report said.
Among these countries, the Netherlands has additional charges of 1.20 euro per kg, followed by Spain at 1.10 euro per kg. The corresponding costs stand at 0.40 euro per kg in Sweden and 0.20 euro per kg in Germany.
Germany’s relatively low charges are linked to exemptions available to electrolyser operators, while France benefits from reduced network charges and excise duties.
Hydrogen Europe said extending similar measures across the EU could help reduce cost differences between member states and support the development of cross-border hydrogen trade.
The industry body has also called for electrolysers to be recognised as flexible assets that can help balance electricity demand and ease grid congestion, rather than being treated solely as large electricity consumers.
However, Germany is considering changes to its electricity pricing framework that could make more electrolyser projects liable for network charges. Industry groups have warned that the proposed changes could increase hydrogen production costs by 1.50 euro to 3 euro per kg.
A separate assessment by the University of Cologne’s Energy Institute estimated a more limited impact, putting the potential increase at around 0.32 euro per kg.
The debate highlights the importance of electricity pricing and regulatory treatment in determining the competitiveness of green hydrogen. Industry representatives have also called for greater operational flexibility to help electrolysers respond to fluctuations in renewable power availability and electricity prices.
