The European Commission has adopted two Delegated Acts, required under the Renewable Energy Directive, to provide a detailed definition of what can be considered renewable hydrogen in the EU.
This regulation responds to the overall Hydrogen Strategy set up by the Commission in 2020, devoted to the creation of a European hydrogen ecosystem which will play a major role in the decarbonisation of industry and heavy-duty transport in Europe and globally.
Overall, the EU regulatory framework for hydrogen includes energy infrastructure investments and state aid rules, and legislative targets for renewable hydrogen for the industry and transport sectors. They will ensure that all renewable fuels of non-biological origin (RFNBOs) are produced from renewable electricity.
The new Delegated Acts define under which conditions hydrogen, hydrogen-based fuels or other energy carriers can be considered renewable fuels of non-biological origin (RFNBO). A certification scheme will ensure that producers, either domestic or from third countries, can demonstrate in a simple and easy way their compliance with the EU framework and trade renewable hydrogen within the Single Market.
They also clarify the principle of ‘additionality’ for hydrogen set out in the EU’s Renewable Energy Directive. Electrolysers to produce hydrogen will have to be connected to new renewable electricity production. In this way, hydrogen production will be supporting decarbonisation and complement electrification efforts, while avoiding pressure on power generation.
Moreover, the acts provide a methodology for calculating life-cycle greenhouse gas emissions for renewable fuels of non-biological origin (RFNBOs). It takes into account greenhouse gas emissions across the full lifecycle of the fuels, including upstream emissions, emissions associated with taking electricity from the grid, from processing, and those associated with transporting these fuels to the end-consumer. It also clarifies how to calculate it when it is co-produced in a facility that produces fossil-based fuels.
This new regulation is necessary for the fuels to be counted towards Member States’ renewable energy target, which will offer regulatory certainty to investors. While initial electricity demand for hydrogen production will be negligible, it will increase towards 2030 with the mass rollout of large-scale electrolysers.
This is key to the REPowerEU Plan, presented by the European Commission to get rid of the EU’s dependency on Russian fuels while contributing to accelerating the green transition. The Commission estimates that around 500 TWh of renewable electricity will be needed to meet the 2030 ambition in REPowerEU of producing 10 million tonnes of renewable fuels of non-biological origin (RFNBOs). The Plan also aims to import another 10 million tonnes of RFNBOs.
The REPowerEU Plan, to which renewable hydrogen is a key pillar, will involve an investment of €210 billion for the period 2022-2027. To support this, €225 billion in loans were already available under the Recovery and Resilience Facility (RRF) and additional grants of €20 billion will be made available to finance the investments and reforms.
The Commission is also supporting the emergence of the hydrogen sector in the EU via Important Projects of Common European Interest (IPCEIs). The first one is IPCEI Hy2Tech, which was approved in July 2022 and conceded public aid of €5.4 billion. It aims at developing innovative technologies for the hydrogen value chain to decarbonise industrial processes and the mobility sector, with a focus on end-users.
Two months after that, the Commission approved IPCEI Hy2Use, a second project which complements IPCEI Hy2Tech with the additional aid of €5.2 billion. It will support the construction of hydrogen-related infrastructure and the development of innovative and more sustainable technologies for the integration of hydrogen into the industrial sector.
Moreover, the Commission has created the Clean Hydrogen Partnership to support research projects aimed at developing cutting-edge clean hydrogen technologies. A total amount of €195 million is available for its 2023 call, funded under the Horizon Europe programme of the European Union.
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