Ensuring blue hydrogen is truly low carbon: a letter to the European Commission

At the Green Hydrogen Organisation we are convinced that green hydrogen made from renewables is the most sustainable hydrogen production pathway for sectors that need it to urgently to reduce their climate impact.

At the same time we appreciate that nearly all of today’s hydrogen is made from fossil fuels (mainly gas and coal). While we strive to deploy enough renewables for our energy system to be fully based on direct electrification and green hydrogen, it is inevitable that fossil hydrogen will continue to play a role over the next few years.

The question then becomes: what conditions should be placed on fossil hydrogen so that blue hydrogen can be considered a genuinely low carbon solution?

Together with our friends in the Europe-focused Renewable Hydrogen Coalition and a number of environmental NGOs and think tanks, we have tackled this question in the context of the EU’s efforts to define low-carbon hydrogen under the Hydrogen and Decarbonised Gas Market Directive (part of the wider Hydrogen and Decarbonised Gas Markets Package made up of two regulations and a directive).

You might have been forgiven for thinking that the debate over low-carbon hydrogen had already happened in the EU with the long delayed adoption of the delegated acts on renewable fuels of non-biological origin (RFNBO) last year and the now famous three pillars of additionality, geographical and temporal matching.

In fact, the Gas Package contains crucial pieces of legislation which lay down the framework for hydrogen transmission, distribution and storage in Europe, for example by establishing an independent European Network of Network Operators of Hydrogen (ENNOH). Article 8 of the Gas Directive requires the European Commission to define low-carbon hydrogen and crucially how to measure its emissions through a delegated act to be adopted within a year.

The Gas Directive has not been formally adopted (this is a foregone conclusion, expected in the next few weeks) and nor is there a draft delegated act to comment on yet. However, the lobbying has begun in earnest.

In a joint letter to the European Commission this week we made a number of recommendations to ensure the use of blue hydrogen in Europe does not delay the energy transition.

1. Emissions

The Gas Directive requires emissions to be reduced by 70% compared to unabated fossil fuel hydrogen based on a full life cycle assessment including transport. Blue hydrogen should deliver these genuine reductions through minimum carbon capture and storage (CCS) and maximum methane leakage rates. As we mentioned last month, this means CCS of at least 95% and methane leakage of no more than 0.5%.

Ultimately we agree with the International Energy Agency, International Renewable Energy Agency and UN Climate Change High-Level Champions that low carbon hydrogen “production routes will need to achieve verifiable low-carbon intensities that trend towards near zero by 2030” which is why we say in the letter that “CCS rates should gradually be increased over time to ensure full compatibility with carbon neutrality goals and avoid carbon lock-ins.”

2. Measurement and verification

It is one thing to require that blue hydrogen meets an emissions threshold, but quite another to ensure that the threshold is being met credibly. This is why we are calling for an accurate and transparent emissions monitoring and verification system by an independent third-party.

We need independent site-specific reporting of upstream methane emissions rather than a reliance on default values or national averages which can hugely underplay the true scale of methane leakage. One solution could be to restrict gas suppliers to those reporting under Level 5 of the Oil and Gas Methane Partnership (OGMP) 2.0 framework which requires site-specific reporting. 

When it comes to carbon sequestration and storage, the emissions intensity of blue hydrogen can only be credibly claimed if the CO2 is permanently stored. This can only happen if there is ongoing monitoring and verification of storage sites. A useful reference for requirements here is the Carbon Capture and Sequestration Protocol developed by the California Air Resource Board for the Low Carbon Fuel Standard. This protocol has explicit requirements for permanence certification of CCS projects including third-party review and site-based risk assessment of CO2 leakage over 100 years.

While our joint letter is directed at the European Commission in relation to the EU’s definition of low-carbon hydrogen, it is important to remember that these issues are also very relevant to other standard-setting and regulatory processes around the world.

This includes the current development of an ISO standard for assessing greenhouse gas emissions from the production, conditioning and transport of hydrogen. Last December the ISO standard was referenced in a COP28 Presidency Declaration focused on mutual recognition of certification schemes for renewable and low carbon hydrogen to address market fragmentation and stimulate global hydrogen trade. The declaration suggested that the 37 countries which signed the declaration might consider adopting or being consistent with standards such as the ISO methodology so it is essential that the process is robust and fully accounts for the emissions associated with blue hydrogen.

These issues are equally relevant for the regulations which the US Treasury needs to finalise to implement the clean hydrogen tax credit (45V) under the US Inflation Reduction Act, as well as similar standards which are likely to be adopted in other countries as the hydrogen sector develops globally.

3. No new sources of fossil gas

We need to use less fossil fuels. Given that hydrogen is set to play a much bigger role than ever before in our economies, we need to guard against the risk that more blue hydrogen leads to more fossil gas extraction. Ideally, blue hydrogen would only be used to reduce the emissions of existing unabated grey hydrogen assets. At the very least we must ensure that blue hydrogen does not lead to a perverse incentive where the world ends up extracting even more fossil gas. Indeed the IEA has made clear since 2021 that no approvals of new oil and gas field developments are needed. As our joint letter says: “low-carbon hydrogen must not deepen Europe’s fossil fuel dependency. It must align with the phase-down trajectory outlined in the EU’s 2040 climate targets impact assessment.”

4. Ban offsets

Our letter recommends that blue hydrogen production and emissions intensity cannot be achieved by offsetting carbon where it has been captured elsewhere, for example by using biomethane credits from a dairy farm. Offsetting schemes often prove unreliable and it is essential to ensure emissions reductions are achieved by actual blue hydrogen production, not least to drive the development of improved technology which is unproven at scale. This is also a serious risk under the 45V rules in the US.

The delegated act on low carbon hydrogen will lay down an important marker and strongly influence investment decisions. It will provide the basis for a certification system for blue hydrogen and determine the extent to which blue hydrogen helps or hinders the EU’s climate goals. There have been calls to rush this process to create certainty for blue hydrogen producers. However, it is far more important to be methodical and take the time needed to ensure the conditions are rigorous. This will avoid a scenario where low-quality blue hydrogen crowds out sorely needed investment in the most sustainable options.