France has announced an updated National Hydrogen Strategy to increase its low hydrocarbon capacity to 10GW by 2035

France has published the first draft of an updated National Hydrogen Strategy, which is now open for comment.

France plans to build 6.5GW of low hydrocarbon capacity by 2030, rising to 10GW by 2035. Capacity comes from France's low-carbon electricity mix, nuclear and renewables, depending on the supply options of each plant, in line with the principle of technological neutrality between renewable and low-carbon hydrocarbons.

The document confirms that France will invest 4 billion euros in subsidies over the next three years to support the deployment of 1GW of electrolytic capacity. The French government plans to spend nearly 9 billion euros by 2030 to support the deployment of decarbonization. These subsidies will be provided in the form of operating subsidies, calculated in part on the cost difference between gray hydrogen (including the carbon price) and low hydrogen.

The French government has held consultations on preliminary specifications and sectors and plans to launch a competitive bidding process for the first project in 2024.

The French government has previously said that the first round of bidding is for 150MW (which may be extended to 180MW), the second round of bidding is for 250MW, scheduled for 2025, and the final round of bidding is for 600MW, scheduled for 2026.

In addition, the new document stipulates that TIREURT (TIREURT-Taxe Interieure de Consommation sur les Produits? nergetiques Utilises comme Carburant dans les Transports is a tax system for energy products in the transport sector in France. Tax credits to support the development and use of renewable energy will be extended to all energy carriers and almost all modes of transportation.

The document states that renewable hydrogen will be eligible for the scheme from January 2023. From 1 January 2024, low hydrocarbon is also eligible for a subsidy of up to €4.7 per kilogram.

New subsidies for hydrogen energy equipment

The document also said that hydrogen energy equipment produced by 2024 will be given new subsidies. In 2024, the French government will establish an investment subsidy to directly support the installation of French-produced equipment as part of France's international hydrogen diplomacy, which may be suitable for foreign buyers.

France will also continue to strengthen its control over all hydrogen equipment and its technologies through various existing support programmes. Mastering hydrogen production, technology and equipment offers a strong opportunity for re-industrialisation in France.

Natural hydrogen extraction

The document also states that the French government will launch an exploratory study on natural hydrogen to assess the mining potential, economic benefits and environmental impact in France by 2025.

Recently, the Pyrenees-Atlantic Province in southwest France received a natural hydrogen research license, and the French government will accelerate natural hydrogen research on a large scale, using the most environmentally friendly technology for mining, and fully utilize the potential of natural hydrogen in France. France has the capacity to be a leading country in this future energy source (natural hydrogen).

Imported hydrogen

The document also asks French government agencies to prepare a outlook report on imports of non-hydrocarbon or its derivatives, including possible import infrastructure, by the end of the first quarter of 2024, while noting that public financial support will continue to focus on local production.

Using hydrogen energy to balance the power grid

Another new initiative in the updated strategy is the use of hydrogen energy to help balance the power grid. This means reducing the electricity consumption of the electrolyzer during periods of peak demand, while promoting operation when electricity is cheap and low-carbon (electricity) production is sufficient.

Taking electrolytic cells off the grid would require establishing sufficient hydrogen storage or utilizing excess non-electrolytic capacity to maintain the possibility of a continuous supply of hydrogen to industrial customers.