Hydrogen subsidies under three pillar-frameworks: A Europe-United States multi-stakeholder comparison

Clean hydrogen is pivotal in decarbonisation strategies for industry and transport. It is also foreseen as paramount for decarbonising power systems, with flexible electrolysis easing RES integration. To cover the gap between clean hydrogen costs and consumer willingness to pay, governments have introduced subsidies, of which the European Hydrogen Bank auctions and the US Inflation Reduction Act of 2022 are prominent examples. These subsidies are built upon clean hydrogen regulations, the design of which can affect both hydrogen costs and emissions, as evidenced by recent modelling studies. Yet, these analyses lack a more encompassing, multi-stakeholder viewpoint, and the potential impact of implemented subsidies has received little attention. This work addresses these gaps by jointly considering subsidies for electrolytic hydrogen production with their underlying regulation from a multi-stakeholder perspective, contrasting the EU and US contexts. It qualitatively assesses the performance of both instruments for three main stakeholders: private investors, public authorities, and power grid operators. Results show that both instruments theoretically cover the cost gap, with the scale-up-oriented US framework incurring higher policy costs, while the EU's cautious approach is more effective at revealing information. The analysis shows that differences in requirements, subsidies implemented, but also power system context can significantly impact clean hydrogen emissions and production costs. Finally, this study highlights emerging research needs regarding the potential distortion of electrolyser operational incentives by these clean hydrogen frameworks, which could paradoxically undermine the strive towards net-zero energy systems.