RSS
Commission sets rules for renewable hydrogen
Today, 13 February, the Commission proposed detailed rules to define what renewable hydrogen means in the EU by adopting two necessary delegated acts under the Renewable Energy Directive, a statement said.
These acts are part of a comprehensive EU regulatory framework targeting hydrogen, which includes investments in energy infrastructure and state aid rules, as well as legislative targets for renewable hydrogen for industry and transport. They will ensure that all renewable fuels of non-biological origin (RFNBOs) are produced from renewable electricity. The two acts are interconnected and both are needed so that fuels are counted towards Member States’ renewable energy targets. They will provide investors with regulatory certainty as the EU aims to domestically produce 10 million tonnes of renewable hydrogen and import 10 million tonnes of renewable hydrogen, in line with the REPowerEU.
More renewables, fewer emissions
The first delegated act defines the conditions under which hydrogen, hydrogen fuels or other energy carriers can be considered as RFNBO. The act clarifies the principle of “additionality” for hydrogen set out in the EU Renewable Energy Directive.
Electrolysers that are used in the production of hydrogen will have to be connected to a new generation of electricity from renewable sources. This principle aims to ensure that the production of renewable hydrogen stimulates an increase in the volume of renewable energy available in the grid compared to what already exists. In this way, hydrogen production will support decarbonisation and complement electrification efforts while avoiding pressure on electricity generation.
While the initial demand for electricity for hydrogen production will be negligible, it will increase to 2030 with the widespread introduction of high capacity electrolysers. The Commission estimates that around 500 TWh renewable energy is needed to achieve the 2030 target set in REPowerEU to produce 10 million tonnes of RFNBO.
This ambitious target of producing 10Mt in 2030 corresponds to 14 % of the EU’s total electricity consumption. This ambition is reflected in the Commission’s proposal to increase the 2030 target for renewable energy to 45 %.
The delegated act sets out various ways in which producers can demonstrate that renewable electricity used for the production of hydrogen complies with the additionality rules. In addition, it introduces criteria to ensure that renewable hydrogen is produced only when and where sufficient renewable energy is available (known as temporal and geographical correlation).
In order to take account of existing investment commitments and to allow the sector to adapt to the new framework, the rules will be gradually introduced and designed to become stricter over time. More specifically, the rules provide for a transition phase of the “additionality” requirements for hydrogen projects that will start running before 1 January 2028. This transitional period corresponds to the period during which electrolysers will be widely available and enter the market. In addition, hydrogen manufacturers will be able to link their hydrogen production to their contracted renewable energy by 1 January 2030 with a monthly cadence. However, Member States will have the option to introduce stricter time-linking rules as of 1 July 2027.
Requirements for the production of hydrogen from renewable sources will apply to both domestic and third country producers who wish to export renewable hydrogen to the EU in order to be counted towards the EU renewable energy targets. A certification scheme based on voluntary schemes will ensure that manufacturers, either in the EU or in third countries, will be able to demonstrate in a simple and easy way their compliance with the EU framework and to market renewable hydrogen in the single market.
The second delegated act provides for a methodology for calculating life-cycle greenhouse gas emissions of RFNBOs. The methodology shall take into account the life-cycle greenhouse gas emissions of fuels, including upstream emissions, emissions associated with the take-over of electricity from the grid and those from the processing and transport of those fuels to the final consumer. The methodology also clarifies how to calculate greenhouse gas emissions from renewable hydrogen or its derivatives where it is co-produced in a fossil fuel facility.
After today’s adoption of the acts concerned, they will be transmitted to the European Parliament and the Council, which have two months to examine them and to accept or reject the proposals. At their request, the period of examination may be extended by two months. There is no possibility for Parliament or the Council to amend the proposals.
Context
In 2020, the Commission adopted a Hydrogen Strategy, which sets out a vision for the creation of a European hydrogen ecosystem, from research and innovation to production and infrastructure, and for the development of international standards and markets. Hydrogen is expected to play a major role in decarbonising heavy-duty vehicle industry and transport in Europe and globally. As part of the Fit for 55 package, the Commission introduced some incentives for its adoption, including binding targets for industry and transport.
Hydrogen is a key pillar of the REPowerEU plan to eliminate Russian fossil fuels. The Commission has presented a concept of “hydrogen accelerator” to increase the use of renewable hydrogen. In particular, the REPowerEU plan aims for the EU to produce 10 million tonnes and import 10 million tonnes of hydrogen from renewable sources by 2030.
In addition to the regulatory framework, the Commission supports the development of the hydrogen sector in the EU and through Important Projects of Common European Interest (IPCEIs). The first IPCEI, called “IPEC Hy2Tech”, which includes 41 projects and was approved in July 2022, aims to develop innovative technologies for the hydrogen value chain to decarbonise industrial processes and the mobility sector, with a focus on end-users. In September 2022, the Commission approved ‘PIIEC Hy2Use’, a second project complementing PIIEC Hy2Tech, which will support the construction of hydrogen infrastructures and the development of innovative and more sustainable technologies for the integration of hydrogen into the industry sector.