European Commission sharpen rules on green hydrogen
On 13 February, the European Commission put forward new rules on renewable hydrogen in the EU, with the adoption of two Delegated Acts under the Renewable Energy Directive. The Delegated Acts are part of the EU’s framework on hydrogen, which includes strategies on developing and enhancing the Union’s energy infrastructure investments as well as its state aid rules. The EU set legislative targets for renewable hydrogen for both the industry and the transport sector.
Generally, a Delegated Act is a non-legislative text adopted by the Commission to supplement or amend non-essential aspects of a legislation, which allows the Commission to react quickly and flexibly. However, if not adopted under an urgency procedure, the acts only enter into force if Parliament and Council do not objectto it. The adopted acts will now be sent to the European Parliament and the Council. They have two months to examine them and either accept or reject them. This period may be extended by two additional months.
The proposals are significant as they include a definition of what can be considered renewable hydrogen. They also emphasise the Union’s targets in regard to hydrogen. The EU aims to reach 10 million tonnes of domestic renewable hydrogen production and 10 million tonnes of imported renewable hydrogen. These targets are based on the REPowerEU Plan, the Unions strategy in reaction to the energy market disruption caused by Russia’s war against Ukraine. Moreover, a critical part of REPowerEU consists of the diversification of supplies. the strategy reflects the EU’s commitment to the green transition, aiming to increase energy savings and boosting the development of renewables and hydrogen.
The first proposed Act outlines conditions under which hydrogen, hydrogen-based fuels or other energy carriers are to be considered as renewable fuels of non-biological origin. Electrolysers to produce hydrogen must be coupled to power generation from renewable energies. Thereby, hydrogen production could encourage a growth of other renewable energy sources. The Commission expects an increasing demand for hydrogen; around 500 TWh of electricity from renewable sources is needed to meet the 2030 ambition listed in REPowerEU. The prescribed rules will be gradually adopted, allowing the sector to adapt. A certification based on a voluntary scheme will make it easy for producers in the EU or in third countries to demonstrate their compliance with EU rules.
The second Delegated Act relate to each other contains a method to calculate the life-cycle greenhouse gas emissions of renewable fuels. upstream emissions, emissions associated with the withdrawal from the electricity grid, and emissions associated with the processing and transport of fuel.
The emergence of the hydrogen sector is supported by various means of EU finding such as IPCEIs, the EU Innovation Fund, and Horizon Europe. The definitions provided under the first Delegated Act can also be helpful for those investing in the sector.
A further important step in the domain of hydrogen was taken on the European level recently. Members of the European Parliament met on the 9th of February in the institution’s industry and energy committee to discuss “low-carbon hydrogen”. The ITRE Committee agreed to put it on the same level playing field as renewable hydrogen. MEPs aim to enhance cross-border capacity to establish an integrated European hydrogen market. So, while Hydrogen currently accounts for less than 2% of Europe’s energy consumption, this might change soon as it is becoming a growing priority of European policy makers.