Hydrogen law, regulations & strategy in Czech Republic

In July 2024, the Czech Government approved the new Hydrogen Strategy of the Czech Republic. The strategy recognises that, even in industries that already use hydrogen, without sufficient state support the production and consumption of renewable hydrogen is unlikely to increase. The strategy includes support for the construction of electrolysers, the conversion of several natural gas backbone pipelines to pure hydrogen by 2030, and the obligation to consume up to 20,000 tonnes of renewable hydrogen per year, in line with EU legislation. The strategy envisions that renewable hydrogen will replace some of the 125,000 tonnes of grey hydrogen which is currently produced and consumed annually in the Czech Republic and which is normally used for chemical processes or fuel refining. The Czech Government has identified that hydrogen has the greatest potential for decarbonisation in chemical and industrial production as well as in the transport and the energy sector, where it can act as a carrier for seasonal energy storage. 

The Hydrogen Strategy is divided into three periods: (i) “Local Island” (2023-2030); (ii) “Global Bridges” (2030-2045); and (iii) “New Technologies” (2045-2060). 

The first period (Local Island) focuses on the production of renewable hydrogen within the Czech Republic. This focus is in part to meet the national target, implemented under EU legislation, which requires, by 2030, approximately 20,000 tonnes of renewable fuels from non-biological origin (“RFNBO”) to be consumed in industry and transport in the Czech Republic. This part of the strategy also recognises and draws focus to the fact that the provision of sufficient investment and, where appropriate, operational support by the Czech Government will be key to meeting national decarbonisation targets. 

The “Global Bridges” period is then aimed at promoting the importation of renewable hydrogen from countries with cheaper and more abundant sources of renewable energy. In essence, it envisages the gradual creation of a hydrogen market (similar to the one with natural gas).

The third stage (New Technologies) is based on the development of new hydrogen production technologies, e.g. the use of geothermal energy or high-temperature electrolysis, which will lead to a higher degree of energy independence for the Czech Republic.  

The Hydrogen Strategy also envisages the creation of hydrogen clusters and valleys in the Ústí nad Labem, Moravian-Silesian and Karlovy Vary regions. These three regions are also included in the Just Transition Fund, the EU subsidy fund that supports the economic diversification and reconversion of territories expected to be the most negatively impacted by the transition towards climate neutrality.

Although no specific legislation is dedicated specifically to hydrogen in the Czech Republic, there has been a major legislative development in hydrogen regulation since the amendment to the Czech Energy Act (Act no. 458/2000 Coll.) became effective on 1 January 2024. The legal amendment includes hydrogen among the gases that can be distributed through the pipeline network to customers, ,meaning hydrogen is now subject to the same legal framework as, e.g., natural gas. 

Other Czech laws relevant to hydrogen regulation are:  

• Act no. 165/2012, on supported energy sources, as amended, which stipulates that certificates of origin can be issued for hydrogen;
• Act no. 416/2009 Coll., on accelerating the construction of strategically important infrastructure, as amended, classified hydrogen filling stations as "energy infrastructure". The means of the acceleration described in this act include setting fixed deadlines and shortening the construction procedure;
• Act No 311/2006 Coll., on fuels, as amended, included hydrogen in the definition of alternative fuels.

With regard to policy, along with the national Hydrogen Strategy set out in Part A, the Czech Ministry of Industry and Trade has also prepared an update to the National Clean Mobility Action Plan with hydrogen mobility as one of its centrepieces. The National Clean Mobility Action Plan update was approved by the Czech Government in August 2024.     

Hydrogen in transport 

Pursuant to the EU Alternative Fuels Infrastructure Regulation (“AFIR”), the Czech Republic has until 2031 to develop a network of hydrogen filling stations along the main routes of the Trans-European Transport Network (“TEN-T”), with a cumulative capacity of 1 tonne of discharge per day. These filling stations are to be located at least every 200 kilometres and at all urban traffic junctions. The goal is to have 40 public filling stations and 10 non-public (for use by business entities and regional and urban public transport) by 2030.

As of summer 2024, there are four 700 bar filling stations in the Czech Republic: one in Ostrava operated by VÍTKOVICE, a.s., a development and engineering company; two (one in Prague and one in Litvinov) operated by ORLEN Unipetrol, the largest producer of grey hydrogen in the Czech Republic; and one close to Prague operated by ČEPRO, a.s., a state-owned fuel trading company. The development of new hydrogen filling stations has been slower than was initially expected in the 2020 National Clean Mobility Action Plan. Nevertheless, it is still expected that the number of filling stations will grow to about 15 by 2025. 

In passenger car transport, due to the relatively rapid take-up of battery passenger electro-mobility, a lower penetration of hydrogen passenger car vehicles is expected compared to battery electro-mobility. By 2030, the updated target under the National Clean Mobility Action Plan for passenger car vehicles is set at 3,000 and 800 for light commercial vehicles registered in the Czech Republic. 

The development of hydrogen buses should continue to be a key priority of the Czech Republic's overall strategy in the field of hydrogen mobility, particularly given the synergies between the necessary construction of refuelling infrastructure and the sustainable production of hydrogen in each urban transport hub. The draft National Clean Mobility Action Plan update sets a target of 200 hydrogen buses to be deployed nationally by 2030. 

Due to the pressure to decarbonise freight transport as a result of EU regulations and directives, the gradual emergence of hydrogen mobility in freight transport can be expected by 2030 (commercialisation of the hydrogen solution is expected in the second half of the 2020s). The draft National Clean Mobility Action Plan update sets a projected target of 380 hydrogen trucks to be in use by 2030.    

Subsidies

Several subsidies are available for hydrogen mobility. These include programmes administered by the State Environmental Fund (Státní fond životního prostředí), where "support for the purchase of zero-emission vehicles and the construction of the necessary infrastructure" is offered to businesses and to public entities. These programmes are part of the Modernisation Fund, with CZK 5.2 million (approx. EUR 208,000) allocated to business entities and CZK 7.5 million (approx. EUR 300,000) to public entities under the TRANSGov programme. 

Further support for hydrogen filling stations in the Czech Republic is provided by the National Recovery Plan and related support programmes (EU-funded). There is also the possibility to use the Integrated Regional Operational Programme, where more than CZK 400 million (approx. EUR 16 million) will be allocated in two investment packages, depending on the development level of the regions, and the Transport Operational Programme, which will provide CZK 420 million (EUR 16.8 million) support for state-owned transport infrastructure until 2027. 

In the area of non-investment support for the development of alternative fuels, it is also worth noting the introduction of lower taxes for low-emission company vehicles. When an employer provides car to an employee for private use, the Czech Tax Code considers this to be an income of the employee which is taxed by an equivalent of 1% of the purchase price of the car. However, in case of low-emission or no-emission cars, it is an equivalent to 0.5% or 0.25% respectively of the purchase price of the car. 

Development of electrolyser projects 

As mentioned above, the Hydrogen Strategy sets the target of building electrolysers with a capacity of at least 400 MWe and expected utilisation of between 30% and 50% by 2027. The strategy foresees a tightening of the rules for the production of RFNBOs, including the conditions for electrolytic hydrogen production after 2027 (in light of the provisions of the Renewable Energy Directive and related Delegated Acts) and recognises the need for the Czech Republic to provide sufficient investment and operational support. 

In 2023, the first commercial green hydrogen electrolyser in the Czech Republic was put into operation in Napajedla (Zlín region) by renewable energy developer Solar Global a.s. and is intended to be used primarily for energy storage. 

Other notable projects to produce green hydrogen in the Czech Republic planned for the next few years include:

• H2 Triangle (2025, Žatec, Region of Ústí nad Labem). This project includes the development of scientific research activities concerning hydrogen and the construction of production and assembly halls that will provide facilities for suppliers of hydrogen technologies. It has a planned annual production of 630 tonnes.
• VOZARTEK (2026, Frýdek-Místek, Moravian-Silesian Region). This project will produce green hydrogen in a heating plant, with a planned annual production of 270 tonnes. The energy source will be a combination of electricity from photovoltaic and biomass waste. A wind power plant is also planned in the future for hydrogen production.
• Green Mine (2027, Most, Region of Ústí nad Labem). The electrolyser will be built as part of the Green Mine project with a planned annual production of 360 tonnes. This project represents a complete revitalisation of the ČSA Most mine, where lignite mining ended in May 2024.
• PV with hydrogen storage (2027). ORLEN Unipetrol plans to combine its own photovoltaic energy production plant with green energy supplies from other entities to run an electrolyser. This project has a planned annual production of 4500 tonnes.  
• ČEZ / Region of Central Bohemia (end of 2025): There is a plan to operate 10 hydrogen buses in Mníšek pod Brdy (Region of Central Bohemia). Hydrogen for this buses will be supplied by ČEZ ESCO and produced in 540 kW electrolyser, the electricity for its emission-free production will be provided by the ČEZ (largest, party state-owned, Czech energy company) hydroelectric power plant in Vraný nad Vltavou.

Subsidies

Regarding hydrogen production, several subsidy programmes are available, administered by the State Environmental Fund (Státní fond životního prostředí) and included within the Modernisation Fund:

• The GreenGas programme supports the development of electrolysers used for the production of renewable hydrogen and investments focused on the transport, distribution and storage of renewable hydrogen. The total allocation for this programme is CZK 4 billion (approx. EUR 160 million).
• The RES+ programme provides support for the development of renewable (primarily solar) projects, with any entity eligible to apply for a subsidy for the installation of a PV system (with an output greater than 1 MWp). However, projects which receive funding can be connected to and used for electrolytic hydrogen production. A total of CZK 100 billion (approx. EUR 4 billion) is to be allocated under the RES+ programme.

Another important subsidy programme is the Just Transition Fund, co-financed by the European Union. As noted above, investment support will be provided, among others, to hydrogen valley projects, which may cover a large variety of hydrogen related activities ranging from research and development, through production and storage, to the use of green hydrogen in industry and transport. The total amount to be allocated under this fund for three regions (Ústí nad Labem, Moravian-Silesian and Karlovy Vary regions, currently associated with coal mining) exceeds CZK 40 billion (approx. EUR 1.6 billion).

Funds may also be made available through the European Commission's Innovation Fund, which supports large innovative projects demonstrating low-carbon technologies, such as the production of green hydrogen for transport and other applications in the Czech Republic. 

Hydrogen distribution infrastructure   

The new Hydrogen Strategy anticipates the adaptation of the existing gas transmission system distribution to hydrogen and expects this transition to be implemented around 2030. It is also expected that the price of hydrogen will gradually decrease in the next few years as the efficiency of hydrogen production and transport improves.

Key prerequisite is seen in the reuse of existing infrastructure and possibly the construction of new transport corridors and downstream distribution pipelines to end users. The main projects for the distribution of hydrogen are currently at various stages of development and include: the Czech German Hydrogen Interconnector (CGHI), which runs from Saxony through the Czech Republic to Bavaria, and the Central European Hydrogen Corridor (CEHC), which is intended to transport hydrogen from western Ukraine via Slovakia and the Czech Republic to large demand areas, particularly Germany. Both projects have the advantage of using existing pipelines and adapting them to transport hydrogen, which is a cost-optimal solution. The projects are currently expected to be implemented by the end of 2030.

The Czech Republic sees the rebuilding of its gas pipeline infrastructure as necessary for importing cheap hydrogen from abroad. Cooperation with foreign partners, especially Germany and Slovakia, will likely play a key role in the process.