The European Commission has proposed long-awaited rules that define the conditions under which hydrogen can be labeled as coming from “green” energy sources. At the last minute, Paris also received recognition for low-carbon hydrogen created from nuclear energy.
As Europe embraces hydrogen, there are concerns that electrolyzers creating the gaseous fuel may increase power consumption and cannibalize renewable electricity intended for other purposes.
European Commission develops standards on green hydrogen
To avoid this, the European Commission has been developing a set of standards to ensure that green hydrogen uses only “supplemental” renewable electricity sources.
According to papers seen by Euractiv, the EU executive finally enacted those guidelines on February 10, after more than a year of postponement due to intensive lobbying from Paris and Berlin.
The Commission attempted to connect its production to time and place to ensure that green hydrogen is exclusively produced using “additional” renewable energy. According to this theory, a Spanish hydrogen producer, for example, would be unable to claim renewable hydrogen if the electricity utilized was sourced from Sweden.
How closely the two must be associated – hourly or quarterly, 50 kilometers apart or from a neighboring country – has since been the topic of heated dispute, with industry pushing for looser standards and environmentalists insisting on a solid correlation to avoid cannibalization.
After months of debate, the Commission finally concluded and established two critical criteria:
- By 2030, hydrogen production must be hourly linked to renewable energy generation. Until then, the connection will be determined every month.
- By 2028, hydrogen producers must demonstrate that their electrolyzers are linked to renewable energy projects that are no more than 36 months old.
- With these rules in place, Europe’s hydrogen industry may sigh relief.
He said that hydrogen investors in Europe were “chomping at the bit” to make final investment decisions.
In general, the European Commission expects the space and time connection requirements to become obsolete if a country’s electricity output is 90% renewable. This is where France came out on top.
For months, French officials have pressured Brussels to emphasize that green hydrogen should be generated by low-carbon nuclear energy, not merely renewables.
“There is a real risk today that the discussions in Brussels will result in the imposition of very high renewable hydrogen targets for industry […] without taking into account the share of hydrogen that can be produced from nuclear electricity,” said Agnès Pannier-Runacher, France’s energy minister.
According to her, a country like France could be barred from using carbon-free electricity for manufacturing hydrogen.
That threat looks to have passed. Countries with a low-carbon electricity mix will be excluded from the additionality criterion if they invest in new renewable energy generation capacity in an amount “at least equivalent to the amount of electricity claimed to be renewable,” according to the guidelines adopted by the EU.
To demonstrate this, hydrogen producers must create “power purchase agreements” (PPAs), which allow customers to purchase renewable energy at a predictable price while also assisting generators in securing finance for their projects.
The exclusion will be granted if the average carbon intensity of the electricity used for hydrogen generation “is situated in a bidding zone where the emission intensity of electricity is less than 18 gCO2eq/MJ,” according to the Commission’s proposal.
According to Euractiv, the exception will apply if a country’s power output produces less than 65 grams of CO2 equivalent per kilowatt hour.
Only France and Sweden meet this criterion out of the EU’s 27 member states. French power emissions were 56g CO2e per kWh in 2021 when its nuclear fleet was nearly fully operating. Sweden, for example, has an average CO2e/Kwh of 28g.
Furthermore, all green standards imposed on European producers will apply equally to imported hydrogen, another victory for France, which rejected Berlin’s attempt to set lighter criteria on imported hydrogen.
Energy industry relieved
According to Hydrogen Europe, the European Parliament deserves praise for making the laws more flexible for EU companies.
Indeed, legislators in Parliament delayed a planned session of negotiations on the EU’s renewable energy directive earlier this week, citing the lack of hydrogen “additionality” regulations as the reason, putting pressure on the EU administration to move forward with its proposal.
The papers, viewed by Euractiv, have yet to be officially published in the EU’s delegated acts registry. However, last-minute modifications are unlikely.