The European Commission will consider the production of hydrogen from fossil fuels “totally renewable” if it generates 70% less greenhouse gas emissions than fossil natural gas throughout its life cycle, as extracted from the delegated acts published this Monday and which are derived from the Renewable Energy Directive.
The new regulation establishes different ways in which producers can demonstrate that renewable electricity used for hydrogen production meets additionality rules and introduces criteria to ensure that renewable hydrogen is only produced when and where sufficient renewable energy is available.
Thus, fuel producers will be able to count electricity taken from the grid as fully renewable if the facility producing the fuel is located in a bidding area where the average proportion of renewable electricity exceeded 90% in the previous calendar year and production and once it exceeds this threshold, it will continue to be considered above 90% for the next five years.
Until now it was considered that the installation that uses electricity for the production of hydrogen through a direct connection must always supply renewable electricity, so that if it is used, for example, that obtained from the network, the resulting hydrogen will not be considered renewable .
Increase the renewable energy target to 45%
However, given the enormous amount of additional renewable electricity generation required to progress decarbonisation of current fossil electricity production, this can only be ensured by including strict additionality criteria in this methodology.
For this reason, Brussels proposes to relax the necessary requirements for the production of hydrogen to account for the electricity obtained by direct connection to a facility that generates renewable fuels as fully renewable in order to increase the share of green energy.
Although the initial demand for electricity for hydrogen production will be negligible, it will increase by 2030 with the massive deployment of large-scale electrolyzers.
The Commission estimates that around 500 terawatt hours (Twh) of renewable electricity are needed to meet the target of producing 10 million tonnes of non-biological fuels, reflected in the Commission’s proposal to increase the renewables target to 45%, all this by 2030.
Next steps
To take into account existing investment commitments and allow the sector to adapt to the new framework, the rules will be introduced gradually for hydrogen projects that come online before January 1, 2028, the time Brussels deems necessary for planning. and construction of renewable electricity generation facilities while increasing its green share.
Hydrogen producers will be able to adjust their hydrogen production to contracted renewables on a monthly basis until January 1, 2030, while Member States will have the option to introduce stricter rules on time correlation from July 1, 2027.
The requirements for the production of renewable hydrogen will apply to both domestic producers and third-country producers who want to export renewable hydrogen to the EU to count against the EU’s renewable energy targets.
A certification system based on voluntary schemes will ensure that producers, both from the EU and from third countries, can simply and easily demonstrate their compliance with the community framework and trade renewable hydrogen in the Single Market.
After the adoption on Monday, the acts will be transmitted to the European Parliament and the Council, which have two months to examine them and accept or reject the proposals, although this period can be extended, if requested, for a further two months.