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Delegated acts to decide the role of renewable hydrogen in decreasing dependency on fossil fuels

Date

24 May 2022

Sections

Energy

The European Commission has finally published the long-awaited two Delegated Acts clarifying the EU rules applicable to renewable hydrogen in transport under the 2018 Renewable Energy Directive. Both documents were absent from last week’s REPowerEU communication, creating further uncertainty in an industry who has been waiting for them since last year. The European Commission has now started a four-week public consultation on how to define renewable fuels of non-biological origin (RFNBOs), as well as their emissions. The proposals try to strike a balance between the need to accelerate the deployment of renewably produced hydrogen and the prerequisite of ensuring emission reductions are met. 

Hydrogen Europe is glad to see that the proposal aims to attract investors early in the process by exempting producers from the additionality rules before 1st January 2027, also known as grandfathering. The other key rules are geographical and temporal correlation, which will apply from the first day. Hydrogen producers will need to fulfil an hourly temporal correlation as from 2027, significantly limiting the amount of hydrogen that can be produced and thus increasing its cost[i].     

In parallel, the delegated act on GHG accounting for RFNBOs and recycled carbon fuels has set a GHG emissions threshold for hydrogen of about 3,38 tCO2/tH2 (equivalent to emission savings of 70% GHG compared to the reference value) and defines which CO2 sources should be considered sustainable for the production of e-fuels.

Jorgo Chatzimarkakis, CEO of Hydrogen Europe, welcomes the fact that the delegated acts are finally out: “Hydrogen has become centre and core to the energy transition as seen in the REPowerEU action plan. Investment certainty and legal clarity have never been more important for our industry. The proposed Delegated Acts are the starting point of an intensive debate on how hydrogen can support the acceleration of additional renewables while speeding up the immediate uptake of hydrogen projects. Our industry, the hydrogen industry, is dedicated to reducing emissions and is not the backdoor to continued use of fossil fuels. We stand ready to work to further improve the Delegated Acts to ensure climate action is at its core.”
 
Hydrogen Europe has prepared an assessment on both delegated acts:

 


[i] An hourly temporal correlation as currently suggested will strongly limit the ability of hydrogen producers to produce above 40% of the time for most parts of Europe (or 3,500 hours) unless the projects are extremely oversized (e.g., 1,200 MW of renewables for a 200 MW electrolyser) and incorporate large batteries, leading to significantly higher costs of hydrogen.

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