Table of contents
As we have pointed out in other posts about hydrogen, in the current context of constant promotion of renewable energy sources as a necessary alternative for decarbonisation, one of the main problems we find is the lack of a real framework that harmonises green hydrogen as an energy vector.
This term appears recurrently in the media and is mentioned by companies and heads of state; however, words are carried away by the wind, and objectives, without a framework for action, fade away.
This panorama of uncertainty for what has been the great promise of the energy transition may be stabilising (although the road to its regulation is still long), as the Commission has laid the first regulatory foundations, through the approval of two delegated acts on 10 February 2023, complying with the order of the Renewable Energy Directive 2018/2001.
Legal uncertainty over the concept "renewable hydrogen" cleared up
The Act establishes the objective and homogeneous criteria for when an energy source can be considered renewable: when it is produced exclusively in "additional" renewable electricity generation facilities - not older than three years - from 2028. However, there is a transition period for projects entering before this date.
This measure is focused on avoiding the use of existing plants to generate hydrogen, and thus encouraging the creation of new production infrastructures dedicated to hydrogen. Therefore, for renewable electricity generation facilities with hydrogen production that are not connected to the grid (dedicated), the additionality clause (this is the novelty) is the only one they have to comply with for the hydrogen produced to be considered green.
For RFNBO production plants that are connected to the grid and purchase electricity through PPAs, criteria that were in many points controversial have been relaxed, such as the time correlation, which indicates that only the same amount of hydrogen can be generated as renewable electricity produced in a given period. In the final draft, the correlation is to be monthly and from 2030 onwards hourly.
Hydrogen from nuclear power will be considered green
In addition, the Act introduces criteria to ensure that renewable hydrogen is only produced when and where sufficient renewable energy is available (known as temporal and geographical correlation). Thus, electricity from the grid will be certified as fully renewable if the hydrogen production facility is located in an area where renewable production exceeded 90% of the total contained in the grid during a calendar year.
In case this condition is not fulfilled, electricity will still be considered renewable if the carbon intensity during its production is below 18 gCO2eq/MJ.
The latter opens the door to hydrogen from nuclear energy being considered green; an exception for which France - a major producer of nuclear energy - has been pushing for some time, and whose positions among states are divided. Thus the inclusion in the renewables directive of hydrogen produced from nuclear energy (so-called pink hydrogen), as part of the gas legislative package, has countries in favour, led by France, and an opposing group, led by Spain and Germany.
Although the ultimate aim is to encourage the use of renewable energies, there are other reasons related to the way hydrogen is produced that lead the Commission to adopt these criteria. On the one hand, the fluctuating nature of renewable energies makes it necessary to establish rules to ensure the supply of renewable electricity at the time and place of renewable hydrogen production. This geographical proximity is also required for security reasons, in order to avoid grid congestion between the electrolyser producing renewable hydrogen and the plant generating renewable electricity.
Member States are also given the option to impose further requirements with regard to the geographical location of renewable hydrogen production sites.
The challenge will be to establish mechanisms to ensure that both geographical and temporal criteria are met in hydrogen production.
Measurement of emissions
The second Delegated Act provides a methodology for calculating the life-cycle greenhouse gas emissions of RFNBOs. The methodology takes into account greenhouse gas emissions over the entire lifecycle of the fuels, including upstream emissions, emissions associated with the extraction of electricity from the grid, processing and those associated with the transport of these fuels to the final consumer.
Our team of environmental law experts can help you. Contact them here.