The transition to a climate-neutral Europe requires significant amounts of hydrogen, especially for sectors where direct electrification isn’t feasible, such as long-haul aviation and heavy industry.
However, the current discourse on ‘low-carbon’ hydrogen, particularly that produced from fossil gas, reveals both potential and challenges. A recent analysis by Agora Energiewende, in collaboration with Deloitte and Carbon Limits, underscores the need for stringent safeguards to ensure that low-carbon hydrogen contributes meaningfully to Europe’s climate goals.
The European Commission’s evolving framework for defining low-carbon hydrogen will play a crucial role in determining both the integrity of climate laws and the cost-competitiveness of hydrogen technologies. The Commission’s current draft rules stipulate that low-carbon hydrogen must result in at least 70% fewer greenhouse gas emissions compared to conventional fossil fuels. This threshold can be met through a combination of reduced upstream emissions and carbon capture technologies.
Agora’s analysis recommends a progressive reduction in the emissions threshold for low-carbon hydrogen to align with Europe’s climate neutrality target. The threshold should decrease from 3 kg CO2-eq per kg of hydrogen by 2030 to 1 kg by 2050. This gradual tightening of emissions limits aims to incentivize the adoption of advanced technologies for reducing and capturing carbon emissions. However, the feasibility of meeting these stringent thresholds remains in question given the current technological and infrastructural constraints.
A critical issue highlighted in the analysis is the discrepancy between default methane emission values and real-world data. The EU’s current default value of 9.7 gCO2-eq per MJ significantly underestimates emissions from fossil-based hydrogen by a factor of 2.5. The leaked draft proposing a 40% increase in this default value may still fall short. Agora suggests incorporating more accurate, site-specific emission factors until comprehensive regulations under the EU Methane Regulation are established.
Accurate measurement of methane emissions is essential for evaluating the true environmental impact of fossil gas-based hydrogen. Inaccurate default values could lead to misguided policy decisions and undermine efforts to achieve genuine emissions reductions.
Grid-based hydrogen production, which involves using electricity from the grid to run electrolysers, currently has a higher emissions footprint in many EU countries. As of 2023, 15 EU countries would have seen higher emissions from grid-based hydrogen production compared to conventional fossil-based methods. However, projections indicate that by the mid-2030s, most of Europe will produce grid-based hydrogen with either renewable or low-carbon electricity.
The analysis advocates for hourly accounting of electricity emissions rather than using annual or default values. This approach would more accurately reflect the emissions associated with hydrogen production and incentivize investments in cleaner electricity sources. While technically feasible, this method requires robust data infrastructure and regulatory support.
The Agora report emphasizes that the path to a climate-neutral future should prioritize renewable hydrogen production over fossil gas-based methods. The latter’s reliance on technologies and infrastructures that are not yet fully developed could create new dependencies on a limited number of fossil fuel suppliers, potentially compromising Europe’s energy security.
The reliance on fossil gas for hydrogen production presents risks, including increased fossil fuel import dependencies and potential impacts on energy security. The current infrastructure for carbon capture and storage is also insufficient to meet the scale required for significant hydrogen production.
The Agora analysis recommends that the EU prioritize renewable hydrogen production and engage in international collaborations to establish scientifically sound methodologies for low-carbon hydrogen. This includes partnerships with countries like the United States and the United Kingdom to develop and validate emissions reporting standards.
As the European Commission prepares for a public consultation on low-carbon fuel definitions, stakeholders will have the opportunity to influence the regulatory framework. Ensuring that future regulations are based on rigorous scientific data and practical feasibility will be critical for achieving Europe’s climate objectives.
