Renewable hydrogen can be obtained via electrolysis using renewable electricity to split water into hydrogen and oxygen and is referred to as ‘renewable fuels of non-biological origin’. It will play a key role in decarbonising sectors where other alternatives might be unfeasible or more expensive. It can be used to replace fossil-based hydrogen for transport and industrial processes and to start new industrial products, such as green fertilisers and steel.
When produced at times when solar and wind energy resources are abundantly available, renewable hydrogen can also support the EU’s electricity sector, providing long-term and large-scale storage. The storage potential of hydrogen is particularly beneficial for power grids, as it allows for renewable energy to be kept not only in large quantities but also for long periods of time. This means that renewable hydrogen can help improve the flexibility of energy systems by balancing out supply and demand when there is either too much or not enough power being generated, helping to boost energy efficiency throughout the EU.
EU definition of renewable hydrogen
Renewable hydrogen is promoted in the EU via several instruments including the targets set out in the Renewable Energy Directive.
To ensure that the hydrogen is produced from renewable energy sources and achieves at least 70% greenhouse gas emissions savings, the Commission adopted in June 2023 two delegated acts.
The new rules will apply to both domestic producers and international producers exporting renewable hydrogen to the EU.
A methodology for renewable fuels of non-biological origin
The Delegated Act on a methodology for renewable fuels on non-biological origin, defines under which conditions hydrogen, hydrogen-based fuels, or other energy carriers can be considered as renewable fuels of non-biological origin (RFNBO).
The additionality delegated act includes 2 types of criteria to ensure that hydrogen is renewable
- The additionality requirement
The idea of additionality is to ensure that the increased hydrogen production goes hand in hand with new renewable electricity generation capacities. To this end, the rules require hydrogen producers to conclude power purchase agreements (PPAs) with new and unsupported renewable electricity generation capacity.
- The criteria on temporal and geographic correlation
These criteria ensure that hydrogen is produced when and where renewable electricity is available. The criteria aim to avoid that the demand for renewable electricity used for hydrogen production is incentivising more fossil electricity generation as this would have negative consequences for greenhouse gas emissions, fossil fuel demand, and related gas and electricity prices.
To support the early scale-up of electrolysers, renewable hydrogen producers will have the possibility to sign long-term renewable power purchase agreements with existing installations (until 1 January 2028).
Further, it is allowed to match the production of renewable power generation with its associated renewable hydrogen production on a monthly basis (until January 2030).
This delegated act is subject to a review in July 2028.
A minimum threshold for greenhouse gas emissions savings of recycled carbon fuels
The Delegated Act establishing a minimum threshold for greenhouse gas (GHG) emissions savings of recycled carbon fuels provides a methodology for calculating life-cycle GHG emissions for RFNBOs.
It takes into account GHG 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.
Certification through voluntary schemes
For certification of renewable hydrogen, producers will be able to rely on a well-established system of certification by third parties, so-called voluntary schemes.
These are international companies with experience of more than a decade in certifying biofuels, biomass and other products worldwide. The Commission has been empowered to recognise voluntary and national schemes for certifying renewable hydrogen. EU countries are required to accept evidence from schemes that have been recognised by the Commission. .
The Commission will remain in close contact with stakeholders and certification schemes to support the practical implementation of the framework and will also monitor its implementation. To this end, it is planned to launch a dedicated study in 2024.