As Europe builds its hydrogen infrastructure, early stage investments face a key challenge: low initial demand leading to high network tariffs. To address this, the EU Hydrogen and Gas Market Regulation enables Member States to introduce inter-temporal cost allocation mechanisms that allow costs to be spread over time. The aim of such mechanisms is to ensure a fair distribution of tariffs between early adopters and future users, making hydrogen networks more viable. ACER is tasked with developing recommendations on the mechanism by August 2025, and has sought input from stakeholders. 

Bellona has highlighted that while specific support for hydrogen infrastructure through inter-temporal cost allocation mechanisms has potential to facilitate the first steps towards the necessary hydrogen infrastructure and to overcome early mover problems, there is also a potential risk of over-investment in network infrastructure that may ultimately be borne by taxpayers or consumers, for example in the case of government risk hedging. We therefore, among other things, recommend to only finance infrastructure by inter-temporal cost allocation mechanisms that is based on scientifically grounded, conservative demand projections, ensuring that public funds are allocated only to projects that are essential for decarbonising the economy, including by prioritising hydrogen for nonidentifiable industrial uses. Governments should hedge against risk only for infrastructure that is demonstrably necessary for industrial decarbonisation and not speculative. 

Read our full consultation response below

• Consultation Response (pdf)