GH2 position on the draft EU Delegated Acts for renewable hydrogen
The Green Hydrogen Organisation has made a submission to the European Commission’s consultation on draft “Delegated Acts” (DA’s) which focus on the definition and production of renewable green hydrogen. These important pieces of regulation are needed to scale up the green hydrogen sector but as currently drafted they risk undermining it in its infancy. We encourage other stakeholders to support our position and to make your views known by making a submission here (Draft DA on “Production of renewable transport fuels – share of renewable electricity”). Please see further details below.
The European Commission’s REPowerEU package increased the EU’s target to 10 million tonnes of domestic and 10 million tonnes of imported renewable green hydrogen by 2030. This raised ambition is a welcome effort to reduce emissions and increase energy security in light of Russia’s unprovoked invasion of Ukraine.
As part of this package, the Commission has published two draft so-called “Delegated Acts” (DA’s) on the definition and production of renewable hydrogen which are vital to scaling up the industry. A public comment period on these DAs runs until Friday 17 June. The final DAs are due to be published later this year. The EU’s Member States and European Parliament will then have to either accept or reject the final DAs within a 2-month period (extendable by 2 months).
The Green Hydrogen Organisation (GH2) has made a submission on the DA related to “the production of renewable transport fuels – share of renewable electricity”. As part of this process GH2 consulted and briefed government and industry stakeholders outside the EU from Argentina, Australia, Brazil, Chile, Colombia, Egypt, India, Oman, Mauritania, Morocco, Namibia and South Africa. All of these countries are seeking to produce hydrogen for their domestic markets as well as for export to markets such as the EU.
Key areas of concern for GH2 and our partners on the DA include the requirement to produce green hydrogen from new ‘additional’ renewable electricity generation; that the installations which are generating electricity have not received support in the form of operating aid or investment aid; and that green hydrogen projects which are connected to the grid will have to demonstrate that power produced is not only from a renewable source but also used or stored within the hour it was produced. For some of these aspects there is a transition period until 1 January 2027.
GH2 Chair Malcolm Turnbull has also written to European Commission Executive Vice-President Frans Timmermans to share his concerns that the implications for green hydrogen production outside the EU are not receiving adequate attention in the DA. Third countries, including many developing and emerging economies, where green hydrogen has the potential to provide domestic clean energy for fast-growing populations and which also offers a major export opportunity are crucial to the EU achieving its targets on green hydrogen to tackle the climate and energy security challenges we now face.
The European Commission says these requirements are needed to ensure the EU meets its emissions reduction targets and “production leads to net decarbonisation” (a number of NGOs feel the requirements are actually too flexible to achieve those aims). Addressing climate change is at the heart of why GH2 works to rapidly scale up the green hydrogen sector.
But to do this, the growth of the sector must not be stunted at such an early stage. Green hydrogen production is currently tiny compared to the production of highly-emitting grey hydrogen derived from natural gas, so burdensome conditions risk delaying the shift from grey to green hydrogen. Of course, green hydrogen needs to be deployed in the sectors where it is the only real solution to decarbonisation. This includes the chemical, fertiliser (through green hydrogen derivative ammonia), steel, cement, and shipping sectors. Use of green hydrogen should be discouraged in sectors where direct electrification is a much more efficient solution (therefore requiring less renewable electricity) such as domestic home heating or small and medium-sized passenger vehicles. NGOs worry about valuable renewable electricity being ‘cannibalised’ for the production of green hydrogen for inappropriate uses and those concerns should be taken seriously.
However, the answer does not lie in making green hydrogen harder to produce in the EU or by international partners seeking to export to the EU, but rather in a collective effort to turbocharge renewables deployment (including efficient planning processes) for all purposes and to be smart about where green hydrogen is used. We hope the European Commission will reconsider the barriers it is putting in place for the critical sector to thrive both through these DAs and further revisions to the Renewable Energy Directive (RED III) which are currently being debated.
We encourage the Commission to consider standards and definitions such as the Green Hydrogen Standard, which provides an opportunity to achieve near-zero emissions, best practice ESG performance, and equitable development opportunities aligned with the Sustainable Development Goals, the Renewable Energy Directive and REPowerEU.