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The Energy Transition First Take Round-Up: March Edition


By Corey Boettiger  |  March 30, 2023

The month of March brought about several EU policy and investment-incentive updates. Recently, EU leaders have expressed concern over the aggressiveness of the Inflation Reduction Act, citing concerns that investment dollars for energy transition related projects will flow into the U.S. at the expense of development in the EU. As such, the EU announced some new incentive packages, including the European Hydrogen Bank (EHB) and the extension of the Temporary Crisis Framework, which aims to speed the investment into and financing of renewable projects.

In addition to these programs, other agreements, like the recently announced agreement to cut maritime transport emissions, will continue to spur low-carbon investment in the EU. This is because there will be more capital from the government available to companies looking to build out projects there and other climate goals will continue to make traditional carbon emitting fuels and processes more expensive.

  • Commission Outlines European Hydrogen Bank to Boost Renewable Hydrogen (3/16)
    • BTU’s Take: The European Commission released new details on its proposed European Hydrogen Bank (EHB), which aims to accelerate investments in renewable hydrogen production and import infrastructure in the EU. Using an auction system, the EHB plans to offer producers a fixed premium per kilogram of hydrogen produced for a maximum of ten years of operation. BTU Analytics notes that these production payments would be similar to the Inflation Reduction Act’s 45V clean hydrogen tax credit and could increase the EU’s competitiveness for renewable hydrogen projects. However, uncertainties associated with the EHB auction system, such as the premium price or the probability of receiving funding, could disadvantage the program and lead companies to seek other more-fixed subsidies outside of the EU.
  • European Green Deal: Agreement Reached on Cutting Maritime Transport Emissions (3/23)
    • BTU’s Take: The European Commission announced that co-legislators have reached agreement on FuelEU Maritime, a new EU regulation that aims to reduce the greenhouse gas (GHG) emissions from the maritime transport sector by establishing limits on the GHG intensity of the energy used by a ship both at sea and at berth. Low-carbon ammonia and methanol have been proposed as alternative shipping fuels to lower GHG emissions, and Mitsui O.S.K. Lines (TYO: 9104) recently announcing projects including ammonia-to-power systems for ships and methanol-fueled coastal tankers. While the demand for low-carbon ammonia and methanol as a shipping fuel could increase the EU’s production and import of renewable hydrogen, the adoption of these fuels will likely be slowed by the necessity to retrofit or build ships and bunkering systems that are compatible with these renewable fuels.
  • European Commission Adopts Temporary Crisis & Transition Framework to Support Transition to Net-Zero Economy (3/9)
    • BTU’s Take: The European Commission adopted a new Temporary Crisis and Transition Framework that further amends the Temporary Crisis Framework that was emplaced in March 2022 to support the EU’s transition to a net-zero economy in the aftermath of the Russian invasion of Ukraine. This new framework aims to help speed up investment and finance for renewable projects in the EU by increasing the flexibility and scope of project funding and extending the aid deadline by two years to December 2025. BTU Analytics notes that this largely serves as a response to the Inflation Reduction Act (IRA), which has been blamed for redirecting renewable project investments away from Europe and towards the U.S. While the new framework bolsters incentives that could compete with the IRA’s 45Y, 45V, and 45X tax credits, which relate to renewable electricity, renewable hydrogen, and equipment manufacturing production, respectively, it fails to include any aid for carbon capture utilization and sequestration (CCUS) projects, like the IRA’s 45Q credit. As a result, BTU Analytics anticipates this new framework is more likely to bring additional solar, wind, and green hydrogen projects to the EU rather than CCUS projects.

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BTU Analytics is a FactSet Company. This article was originally published on the BTU Analytics website.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

BTU oil and gas data

Corey Boettiger

Senior Energy Strategy Analyst

Mr. Corey Boettiger is a Senior Energy Strategy Analyst at FactSet. In this role, he develops datasets and analytics around global energy transition projects. Prior, he was a senior energy analyst at BTU Analytics, which FactSet acquired in 2021. He has previously been involved in several areas of BTU Analytics’ market research, including U.S. power markets, wellhead economics, and NGL production, and has created and maintained several of BTU Analytics’ models. Mr. Boettiger earned a B.S. in Applied Mathematics and Statistics from the Colorado School of Mines.


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.