Roast the hazelnuts on a baking tray for about 10 minutes then rub them in a tea towel to remove the husks. Reserve about 40 nuts and chop the rest.
Beat the sugar and butter until lightly creamed. Add egg yolks and vanilla and mix until combined. Fold in the flour, baking powder, chopped chocolate and hazelnuts; stir gently until the mixture is combined.
Roll rounded teaspoons of the mixture into balls and place them 5cm apart on baking trays lined with baking paper. Flatten each ball by pushing a hazelnut in the top. Bake 10-15 minutes or until browned on the bottom. Cool on the trays.