Hydrogen and fuel taxation

Anders Chr. Hansen

Abstract



The competitiveness of hydrogen depends on how it is integrated in the energy tax system in Europe. This paper addresses the competitiveness of hydrogen and fuel cell technology when the taxation of fuels is taken into consideration. The study shows that even if hydrogen is taxed with exactly the same rate as conventional fuels, fuel taxes will amplify the competitiveness of hydrogen and fuel cell technology due to its superior energy efficiency. The higher the fuel taxes the more competitive is hydrogen. Thus, hydrogen and fuel cell technology must be expected to become competitive in Europe before it does so in the USA if the present difference in fuel taxes prevails. The study also examines some more realistic scenarios of fuel taxation at the time when hydrogen is introduced in Europe, all making hydrogen and fuel cells more competitive. Finally, the study points to some difficulties in maintaining the prevailing taxation principles in European fuel taxation when hydrogen is introduced in large scale.

Keywords


Taxation principles, Hydrogen competitiveness, European energy taxes

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