Hydrogen law, regulations & strategy in France

The hydrogen strategy for the European Union, presented on 8 July 2020, enshrines decarbonised hydrogen (i.e. produced without fossil fuels or by steam reforming of methane with CO₂ capture) as a key technology for achieving carbon neutrality.

Decarbonised hydrogen could replace carbon-based hydrogen and fossil fuels in sectors that are difficult or impossible to electrify. Ultimately, it could help balance energy systems and possibly store surplus renewable electricity on a large scale. In September 2020, the European strategy was rolled out in France through the National Strategy for the Development of Low-Carbon Hydrogen.

By 2030, €9 billion of public funding will be mobilised for the development of low-carbon hydrogen in France, including €2 billion under the France Relance programme. This €2 billion is divided between four schemes: (a) two calls for projects (“AAP”) managed by Ademe: ‘Hydrogen Territorial Ecosystems’ and ‘Hydrogen Technology Bricks and Demonstrators’; (b) an important project of common European interest (IPCEI); and (c) the support mechanism to produce low-carbon hydrogen. Due to limited access to individual data, this chapter provides an overview of the supported projects, within the limits of available information. The four schemes are co-funded by France Relance and have a budget of €275 million for 2021-2023.

On the one hand, these schemes aim to support the development and improvement of components and systems linked to the production, transport and use of hydrogen (the ‘Technological Building Blocks’). On the other hand, the schemes finance projects which are demonstrators, pilots or commercial firsts on national territory, to develop and structure the sector (the ‘Demonstrators’ strand).

The IPCEI aims to support research, development and industrialisation throughout the hydrogen value chain, providing public funding of up to €5.4 billion to be shared between the fifteen Member States that are participating in the  project. The French envelope amounts to €1.575 billion, including €1.275 from France Relance and €0.3 from the PIA 4 investment programme. The €650 million support mechanism for hydrogen production is designed to offset the higher cost of hydrogen produced by electrolysis compared with hydrogen produced with fossil fuels. Initial results show that the ‘Hydrogen Territorial Ecosystems’ AAP has supported 16 projects in total.

Of those 16, 6 will receive funding from the France Relance plan, which provides €88 million of the €250 million needed to complete those six projects. One of the projects will supply Paris and the surrounding region with hydrogen fuel, while the other five involve the production, distribution and use of hydrogen in Corsica (two projects), Occitanie, Bourgogne-Franche-Comté and Provence-Alpes-Côte d'Azur.

The ‘Hydrogen Technology Bricks and Demonstrators’ scheme supports 19 projects, representing a total of 43 beneficiaries (most of the projects were co-sponsored), and granted aid of €75 million. Nearly 70% of the aid was granted to large companies or mid-sized companies, even though they represent only half of the forty-three beneficiaries. The projects were selected over twelve different themes, including offshore electrolysis, pyro-gasification, hydrogen and electric buses, amongst others. Twelve of the nineteen projects involve incremental innovations in key areas for the deployment of carbon-free hydrogen in France.

On 10 July 2024, the French Government sent the European Commission the French National Climate and Energy Plan, in which France reaffirms that to achieve carbon neutrality objectives, it is necessary to:

• switch the production of substitutable fossil hydrogen towards carbon-free production, i.e. around 430 kilotons of hydrogen out of the 900 kilotons of hydrogen; and
• meet the need for carbon-free hydrogen by prioritising certain sectors such as industry or heavy mobility, with a view to managing the large volume of electricity involved in hydrogen production via electrolysis.

The Multiannual Energy Programme for France was unveiled in 2020 with Decree no. 2020-456 of 21 April 2021, and covered the periods 2019-2023 and 2024-2028. This Multiannual Energy Programme will be reviewed in the coming weeks, with public consultations commencing on 2 November 2024. The review is intended to cover the production of renewable and low-carbon hydrogen.  

Three main changes have happened for hydrogen projects in France in the last 18 months, the first and third of which are set out in detail in the following section.

First, the Decree no. 2023-854 of 1 September 2023 specifies the support scheme for the production of certain categories of hydrogen. The support scheme starts with a selection phase which will be specified by the Minister responsible for energy (the "Minister of Energy"). This is then followed by a dialogue phase, and a designation phase. The selected candidate must then comply with the obligations and requirements included in the competitive tendering procedure after which the support contract is granted.

Second, Decree no. 2024-289 of 29 March 2024 (“Decree 2024-289”) was published in respect of extended collective self-consumption of gas and included various provisions relating to renewable and low-carbon gases. Decree 2024-289 specifies that the manager responsible for the national register of guarantees of traceability and hydrogen origin will be appointed by the Minister of Energy, after a competitive tendering process and for a period that may not exceed five years.

Lastly, the Ministerial Order of 1 July 2024 specifies the greenhouse gas emission threshold and the methodology for accounting for those emissions which hydrogen must adhere to qualify as renewable or low-carbon. To be considered renewable or low-carbon, hydrogen must be produced such that the GHG emissions remain below a certain threshold (set out below).

The support scheme to produce certain categories of hydrogen (Decree no. 2023-854 of 1 September 2023)

The support scheme begins with a selection phase, during which the Minister of  Energy issues a consultation document. This document details the competitive tendering process, provisional timelines, technical and financial requirements for applicants, and the criteria for bid selection at the conclusion of the process.

In this procedure, the Minister of Energy submits the consultation document to the French Energy Regulatory Commission (“CRE”) for its opinion. Thereafter, the procedure is published in the Official Journal of the European Union (“OJEU”), and applications will be made available online.

During the subsequent ‘dialogue’ phase, selected candidates are invited to participate in discussions, which are organised by the Minister of Energy. At this stage, the Minister of Energy may also involve any entity deemed necessary in these discussions (for example the CRE and the French Transmission System Operator (“TSO”)).

At the end of the selection phase for eligible applicants, or during the dialogue phase, the Minister of Energy will draw up a set of specifications with a view to designate the applicants selected to receive support. The specifications are forwarded by the Minister of Energy to the CRE for its opinion. The CRE has a period of one month to give its opinion. The Minister of Energy notifies the selected candidates of the specifications and invites them to submit their bids to the CRE within the deadline set in the specifications via the website mentioned in Article R. 812-5 of the Energy Code. Bids are then submitted, following which the Minister of Energy selects the successful applicants. The CRE publishes the list of the selected applicants and a non-confidential version of the summary report on the analysis of the bids.

The support contract provides aid on an individual basis and is concluded between the applicant, who is the beneficiary, and the State or authorised representative acting on its behalf. The contract specifies:

• the amount of aid granted;
• whether the aid granted will be in the form of operating aid or investment, or a combination of the two;
• the terms and conditions for payment of the grant;
• the duration of the grant, which may not exceed 20 years;
• the frequency of payments; and
• the beneficiary's economic and environmental commitments over the subsidy period.

The producer must make available to the Regional Prefect various documents relating to the characteristics of the production facility, its performance and the results of the checks referred to in Article L. 812-9 of the Energy Code. The producer is also required to submit to the Minister of Energy the details of the costs and revenues relating to its facility, including any supporting documents.

Methodology for the legal qualification of hydrogen as renewable or low-carbon (Ministerial Order of 1 July 2024)

In order to qualify as renewable or low-carbon hydrogen, pursuant to article L. 811-1 of the Energy Code, the maximum amount of CO₂ emission per kg Hydrogen is set at 3.38 kgCO2eq/kgH2. The calculation is based on a complete analysis of the life cycle of the hydrogen generation and would allow the inclusion of hydrogen produced by electrolysis using nuclear energy in this category.

Overview of low-carbon hydrogen projects supported by the France Recovery Plan

H24FP (formerly HysetCo): The construction of six new hydrogen stations in the Île-de-France region, two of which will be equipped with an electrolyser for decentralised, low-carbon hydrogen production. The hydrogen production plants each have a capacity of 1 tonne of hydrogen per day 1 .

HYMOT: A hydrogen-powered engine for light commercial vehicles. The project will involve the development of a demonstration vehicle and the simulation of a digital driving fleet. The technological solution must demonstrate the virtual elimination of polluting emissions and meet the strictest emission regulations.

OPEN POWER: Essonne; The OPEN POWER project aims to design and manufacture larger-capacity electrolysers to meet market needs. These electrolysers will require a specific layout, innovative design, and stringent requirements in terms of assembly quality and component quality control.

FCC GEN3: Vosges; Electric compressor for hydrogen fuel cells; ‘Garrett Motion’ wants to develop a new 3^rd generation electric compressor combining power and high rotation speed with maximum efficiency. The technology will be used mainly on light commercial vehicles, lorries and stationary and mobile construction equipment. The project is in line with the objective of carbon neutrality in the mobility sector.

TRAXX H2: Groupe EXEL industry; Marne (51); The aim of this project is to develop a new generation of autonomous straddle carriers running on hydrogen thanks to a fuel cell.

MOSAHYC: GRTgaz and CREOS announce their collaboration to create a 100% hydrogen European transmission network, linking the regions Saarland (Germany), Grand Est (France) and the Luxembourg border. The aim of this unprecedented agreement between the two gas transport operators is to make a 70 km hydrogen transport infrastructure accessible, by adapting existing gas infrastructures. The network will contribute to the development of a cross-border regional hydrogen ecosystem between these three countries.

H2 NFC PH2: Grand Belfort; Production of hydrogen using a 1 MW electrolyser. Following production, the hydrogen will be compressed and stored for use in 7 buses from the Grand Belfort transport authority, which will refuel there. Some of the hydrogen will be transported in cylinders for delivery by lorry to local industries and research centres.

H2D2: Savoie, Puy de Dôme, Hauts de Seine; Compact H2 powertrain for heavy vehicles. The aim of this project is to design, prototype and test a 200 kW fuel cell powertrain. The project will enable EREM, IBS and GCK Industry to offer 3 new products on the market for components to power heavy vehicles, a complete powertrain for snowploughs and, eventually, for other high-powered road and off-road vehicles.

H2 BOOST: Rhône; Development and validation of an H2 CityBus with optimised operating costs. The project led by IVECOBUS aims to improve the cost of owning a hydrogen bus by developing a bus with innovative solutions for maximising inter-system efficiency, and includes the development of an innovative E-Bench test bench for short-loop validation of inter-system control algorithm models.

DépHy2A: A 12 MW photovoltaic power plant coupled to a 5 MW electrolyser produces 162 tonnes of hydrogen per year. This hydrogen is converted into electricity using a fuel cell to power ships docked in the Port of Ajaccio. This first phase of the project focuses on the quays used every day by Corsica's ferries Linea, in order to eliminate the pollution generated by the ships at quayside.

Two other uses are planned: heating or cooling the buildings around the Port, and injecting surplus renewable electricity produced during periods of strong sunshine into the EDF grid. The plant is located on the Saint-Antoine landfill site, 5 km from the Port of Ajaccio.

DépHy2B: The characteristics of the project are the same as those for DépHy2A, save that this project will be utilised for the Port of Bastia. The photovoltaic plant will be installed on the water basins of the CICO quarry, located 16 km from the Port of Bastia, and will produce 167 tonnes of hydrogen per year.

R'HySE: Building on the CATHy0PÉ and HyAMMED projects to decarbonise heavy transport in the Fos-sur-Mer industrial zone, the R'HySE project aims to deploy new renewable hydrogen distribution infrastructures in the Southern Region. The first two high-capacity stations dedicated to heavy vehicles will be installed to supply a fleet of 50 zero-emission hydrogen trucks from 2024. This is a major project for this industrial region, which is facing major environmental challenges. The project aims to help to mass-market the use of hydrogen by involving a large number of players in the transport and logistics sectors.

HY-FLAM-SMART: The aim of the project is to develop a range of ultra-low NOx 100% green hydrogen burners for all types of gas infrastructure, which will enable the level of green hydrogen in natural gas to be measured directly and quickly.

SMAC FC : The aim of the project is to design the technological building blocks for a modular range of fuel cell air compressors. The electronic converter and its associated control will be compatible with high rotation speeds and a power range of 8 to 30 kW.

STOCKH2SAFE : Development of a hydrogen analyser. The storage and distribution of hydrogen, particularly in liquid form, is a major challenge for the development of the industry. To address this, the project aims to develop a gas analyser that is more efficient than current equipment at detecting the proportions of ‘ortho’ and ‘para’ hydrogen, which are key measures for the energy efficiency of hydrogen liquefaction. This analyser could also present opportunities for measuring other gases.

HYVOO: This project contributes to the emergence of a multimodal logistics hub around a massive green hydrogen production unit in Port-La-Nouvelle. The plant, which has a capacity of 500 to 3,500 tonnes a year, will supply and distribute hydrogen via an innovative logistics chain to the industrial, energy and road and waterway transport sectors within a 250 km radius.

ECH2: This project aims to develop and produce the next generation of control electronics for fuel cell systems. It aims to reduce the cost of hydrogen-powered vehicles by taking a modular approach and increasing the lifetime and energy efficiency of the system.

REVERSI: The REVERSI project aims to advance key components of solid oxide electrolysis technology, building on the progress achieved by the CEA to date. The project’s work will contribute to the maturation of stack technology, both in terms of technological readiness and manufacturing processes.

CAPPYRO H2: Gironde; Process for producing hydrogen from biomass. The aim is to build an industrial site for the production of renewable hydrogen in a fluidised bed, with 4 main functions, including innovative treatment of organic matter.

HYCEVAL: Centre-Val de Loire region; The aim of this project is to design 2 hydrogen-powered internal combustion engine vehicles/machines to meet the new European zero emission standard (emissions of less than 1g of CO2/kWh).

SEALHYFE: Le Croisic; The SEALHYFE project aims to install an offshore demonstrator for the production of green hydrogen. Electricity will be generated by IDEOL's floating wind turbine and the LHYFE hydrogen production system will be installed on GEPS TECHNO's WAVEGEN float. The project will be demonstrated at the Ecole Centrale Sea trials site.

ELEMENTA H2: The aim of the ELEMENTA H2 project is to provide a solution for decarbonising ship calls, in particular by providing quayside electrification using green hydrogen produced locally. The proposed solution includes a massive hydrogen storage system on the quayside, combined with a barge comprising a hydrogen storage system connected to a high-powered fuel cell (1.5 MW) and an on-board pressurised hydrogen storage system. The application identified will power ships being loaded and unloaded in the Port of Rouen.

CRYO PIP LH2: The aim of the project is to develop and manufacture a double-shell pipeline demonstrator for transporting liquid hydrogen at -253°C.