The Renewable Energy Directive calls for the adoption of two Delegated Acts, and the Commission has suggested specific regulations to specify what is meant by “renewable hydrogen” in the EU.
These Acts are a component of a larger EU regulatory framework for hydrogen that also contains legislative goals for renewable hydrogen for the transportation and industrial sectors, as well as laws governing state aid and investments in energy infrastructure. They will make sure that all RFNBOs, or renewable fuels of non-biological origin, are generated using renewable electricity. Both Acts are necessary for the fuels to be included in the Member States’ renewable energy objective and are intertwined. As the EU strives to produce 10 million tonnes of domestic renewable hydrogen and 10 million tonnes of imported renewable hydrogen in accordance with the REPowerEU Plan, they will give investors legal stability.
Reduced emissions and more renewable energy
The first Delegated Act specifies the circumstances under which hydrogen, fuels derived from hydrogen, and other energy carriers may be regarded as RFNBOs. The EU’s Renewable Energy Directive’s “additionality” criteria for hydrogen is clarified by the Act. Hydrogen-producing electrolyzers will need to be coupled to future renewable electricity generation. The goal of this approach is to make sure that the production of renewable hydrogen encourages the grid to store more renewable energy than it presently does. By boosting decarbonization and enhancing electrification efforts in this way, hydrogen production will relieve the strain on power generation and support efforts to reduce carbon emissions.
Although the initial electricity requirement for hydrogen generation would be low, it will rise by 2030 as large-scale electrolyzers are widely deployed. The Commission calculates that in order to achieve REPowerEU’s 2030 goal of producing 10 million tonnes of RFNBOs, about 500 TWh of renewable electricity will be required. The 10Mt goal equates to 14% of the entire EU’s electricity consumption in 2030. The Commission’s suggestion to raise the renewable energy target for 2030 to 45% reflects this aspiration.
Different methods for producers to prove that the renewable electricity used for hydrogen production conforms with additionality standards are outlined in the Delegated Act. It also adds criteria to guarantee that renewable hydrogen is only produced when and where there is an adequate supply of renewable energy (known as temporal and geographic correlation).
The regulations will be implemented gradually and are intended to get stricter over time in order to account for current investment commitments and give the industry time to adapt to the new framework. In particular, the regulations call for a transitional period of the “additionality” requirements for hydrogen plants that would begin operations prior to January 1, 2028. When electrolyzers are scaled up and put on the market, this transitional period falls during that time. Additionally, until the first of January 2030, hydrogen producers will be allowed to match their monthly hydrogen output with the contracted renewables. As of July 1, 2027, Member States will have the option of enacting more stringent regulations regarding the temporal correlation.
Both domestic producers and producers from outside the EU who wish to export renewable hydrogen to the EU in order to contribute to the EU renewables targets must comply with the regulations for the production of renewable hydrogen. Producers, whether in the EU or in third countries, will be able to easily and quickly establish their compliance with the EU framework and trade renewable hydrogen inside the Single Market thanks to a certification scheme based on voluntary schemes.
A technique for calculating the life-cycle greenhouse gas emissions of RFNBOs is provided in the second Delegated Act. The methodology accounts for greenhouse gas emissions throughout the whole fuel lifecycle, including upstream emissions, emissions related to processing, getting power from the grid, and delivering these fuels to the final user. Additionally, the technique makes it clear how to determine the greenhouse gas emissions of renewable hydrogen or its derivatives when they are produced alongside fossil fuels in a facility.
The Acts have now been adopted and have been sent to the European Parliament and the Council, where they will have two months to review them and decide whether to approve or reject the ideas. The scrutiny period may be prolonged by two months upon their request. The plans cannot be changed by the Council or the Parliament.