Capacity vs. Production: Which support model for Clean Hydrogen?

This FSR Debate will explore whether capacity-based remuneration models could offer a more effective alternative to traditional production-based schemes for clean hydrogen in the EU.

As the EU seeks to scale up its hydrogen economy, policymakers are testing different support models to bridge the gap between ambition and market reality. But which approach best balances incentives for investors while ensuring cost efficiency and market stability?

As policymakers explore different remuneration models, the discussion on how to support clean hydrogen in the EU is gaining momentum. While production-based schemes have been the dominant approach, capacity-based models are emerging as a potential alternative. These discussions come amid key policy developments, including the Clean Industrial Deal and the establishment of the Decarbonisation Bank, which seeks to accelerate hydrogen deployment.

As the sector evolves, understanding how different support mechanisms influence investment decisions, cost efficiency, and long-term market stability remains essential. This debate will bring together experts to discuss the role of remuneration models in the EU hydrogen economy and their interaction with broader decarbonisation policies.

The event features a keynote presentation by Alexander Hoogsteyn, who will introduce insights from his paper “Interactions and Distortions of Different Support Policies for Green Hydrogen.” His analysis examines the strengths and weaknesses of existing policy frameworks, highlighting how different support models shape investment decisions and influence market development.

Following the presentation, a panel of expert discussants will engage in a dynamic conversation, weighing the potential of capacity-based remuneration against production-based schemes. They will examine how these models interact with recent EU policy shifts, such as the Clean Industrial Deal, the Decarbonisation Bank, and the growing experimentation with auction mechanisms in decarbonisation policies. With clean hydrogen struggling to gain traction, the panel will explore potential solutions to accelerate its growth and overcome current barriers, considering the broader context of EU decarbonisation efforts.

Audience engagement will be a key part of the debate. Participants will have the opportunity to pose questions, challenge perspectives, and contribute to the discussion on how best to accelerate clean hydrogen deployment in Europe.

Keynote speaker

Alexander Hoogsteyn | KU Leuven

Discussants

James Kneebone | EUI

Moderators

Marzia Sesini | EUI

Nicolò Rossetto | EUI