The hydrogen sector is increasingly looking at Contracts for Difference (CfDs) as a mechanism to accelerate the ramp-up of renewable hydrogen. But are we actually talking about the same core mechanics when we talk about CfDs?
H2BA has put together a comparative briefing on CfD funding schemes for low-carbon hydrogen and its derivatives — eight initiatives, side by side: Four in implementation (Italy, Japan, UK and France), one legislated (UK SAF AR1), and three concepts (H2BA’s EU import CfD, VIK’s Midstreamer Model and BDEW’s Hydrogen CfD).
For each, we look at status, budget, contract term and what makes the model distinctive.
A few things stood out:
▪️ Most schemes share a common core: competitively determined strike prices, two-sided settlement and clawback mechanisms, typically over 15–20 years.
▪️ But scope, funding source and governance differ significantly. The UK eSAF CfD is currently the only scheme in our comparison funded entirely through an industry levy.
▪️ Import openness varies considerably. Japan and H2BA’s proposal explicitly target large-scale imports, while most other schemes focus primarily on domestic production.
▪️ The headline multi-billion-euro budgets are ceilings spread over 15–20 years, not upfront spending or necessarily the net cost to taxpayers. Where claw-back mechanisms apply, the public sector can recover support when market prices exceed the strike price, potentially returning a substantial share of the initial outlay as the market becomes self-sustaining.