Public consultation on inter-temporal cost allocation mechanisms (ICA) for financing hydrogen infrastructure

IOGP Europe has responded to ACER's public consultation on intertemporal cost allocation (ICA) mechanisms for financing hydrogen infrastructure, underlining their importance in enabling early-stage hydrogen network development. ICA mechanisms allow for the deferral of cost recovery, helping lower tariffs in the initial phases when hydrogen demand is still ramping up, thus improving affordability and project bankability.  

IOGP Europe emphasized the following aspects:  

• Both transmission and distribution networks could benefit from such mechanisms, provided they are grounded in credible demand forecasts and supported by binding commitments or reasonable upfront financial contributions from users. 

• Need for a gradual, demand-led approach to infrastructure development to avoid the risk of underutilised or stranded assets.  

• Necessity of complementary public guarantees (last resirt guarantees) to cover early financial risks, particularly given uncertainties in hydrogen pricing, regulation, and technology readiness.  

• Harmonised principles across EU member states, while allowing flexibility to adapt to national contexts,are needed to facilitate cross-border trade and ensure market integration, 

• Need for enhanced transparency, tariff stability, and scalable cost-recovery mechanisms that reflect the evolving nature of the hydrogen market. 

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