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electrolysis). Germany has a EUR 7 billion support package, France a EUR 7.2 billion version (EUR 3.4 billion before 2023), while EUR 7 billion is expected to be allocated to the Portuguese strategy. Some of the investment support has already been translated into concrete calls for proposals. These include the solarelectrolysis project in the port of Sines (Portugal), which has received 74 expressions of interest, and the EU call for a 100MW electrolyser for commercial and industrial applications. Blending quotas: These could be used by either specifying a share of green hydrogen in existing uses, or shares of green hydrogen in final energy demand for specific applications (e.g. similar to the renewable share in transport in the EU). France has already used this approach, specifying 10% of low- carbon hydrogen (potentially from nuclear as well) in industry by 2023 and 20%-40% by 2028. Portugal has also specified blending shares for most enduse sectors from 2020 to 2050, including 2%-5% of green hydrogen in industry by 2030, 10%-15% by 2040 and 20%-25% by 2050. Manufacturing capacity targets: Some regions are aiming for technology leadership in electrolysis and could use incentives to promote domestic production. For instance, the UK government awarded USD 9.8million (GBP 7.5 million) for a feasibility study to scale up the electrolyser size to 100 MW and the manufacturing capacity to 300 MW/year by 2023 and to 1 GW/year by 2025. Tax incentives: These could decrease the impact of the high capital cost on project profitability. Alternatives are lower income or sales taxes, or lower tax on the investment. One example is from the Netherlands, where investments resulting in the displacement of fossil fuels are tax deductible (the tax rate is up to 41.5%). The incoming US administration is considering the introduction of a production tax credit of USD 0.42/kg for clean hydrogen and hydrogen carriers – based on emissions intensity – and a manufacturers production tax credit of USD 500/kW. Similar incentives SCALING UP ELECTROLYSERS TO MEET THE 1.5°C CLIMATE GOAL were fundamental for the deployment of wind and battery electric vehicles respectively. Green hydrogen premium: This could be through feed-in tariffs or contracts for difference. An example where this is already applied is the SDE++ program in the Netherlands, which is set to provide subsidies for the production of hydrogen from electrolysis (RVO, 2020). Governments undertake all this alone, however. Industry and private capital are other key components (see Figure 36). One of the actions industry can take is to form joint ventures. These can diversify the risk for large projects that are firstofakind, while still allowing all parties to benefit from experience in the project. A recent (November 2020) example is a 20 MW green hydrogen project in China, where hydrogen will be used for road transport as a joint venture between Shell and Zhangjiakou City Transport. Industrial manufacturers can contribute to the lower cost by standardising the designs, which can then be replicated from one project to another, reducing engineering costs, learning from construction and reducing delays. Some companies could also invest in electrolysis, given its good prospects for the future, aiming to take the lead and a high share of a burgeoning market. The reward for the high risk for being a front runner is that of becoming a dominant player in the future market. Once the market develops, research can transition to be dominated by private efforts aiming to improve competitiveness and achieving a larger market share. In addition, international organisations can serve to: exchange knowledge; bring together governments and industry; set the global needs for electrolysis deployment; track progress towards deployment targets, implement policies and cost decreases; support the development of national strategies; perform scenario analysis to set the global needs for electrolysis to be in line with a sustainable future; identify new business models; and analyse specific case studies. 95PDF Image | GREEN HYDROGEN SCALING UP ELECTROLYSERS
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