EU hydrogen rules update aims to boost renewable energy sourcing and targets across the bloc

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The European Commission is reviewing hydrogen production and whether its use of fossil fuels can be considered fully renewable when the lifecycle emissions are reduced by a substantial margin. The directive now in play sets that hydrogen should be linked to reductions in greenhouse gases as calculated by the Renewable Energy Directive and through laws that authorize these standards.

New regulations outline how manufacturers can demonstrate that renewable electricity is used in hydrogen production. The rules introduce clear criteria to ensure renewable hydrogen is produced only when ample renewable energy is available and in the right locations.

Consequently, fuel producers located in a tender area may count electricity from the grid as fully renewable if the country where the plant resides had an average renewable electricity share above a defined threshold in the prior year. If generation stays above this threshold, the same level will be considered renewably sourced for the next five years.

Previously, the assumption was that hydrogen production tied to electricity from direct connections must rely entirely on renewable electricity to be counted as renewable. If the electricity came from the network, the resulting hydrogen could not be labeled renewable.

Given the considerable increase in renewable electricity generation needed to accelerate decarbonisation of existing fossil generation, the new approach includes additional criteria to ensure credibility and strict adherence.

Brussels proposes easing some requirements for hydrogen production to recognize electricity supplied by direct connections to plants generating renewable fuels and to help boost the share of green energy described as fully renewable.

While initial electricity demand for hydrogen production is modest, it is expected to rise with the adoption of large-scale electrolyzers in the coming years.

The commission estimates that roughly 500 terawatt hours of renewable electricity will be needed to achieve the target of producing ten million tons of non-biological fuels, and this expectation feeds into the proposal to raise the renewable energy target to forty-five percent by 2030.

Renewable power generation facilities

To acknowledge existing investment commitments and to help the industry adapt to the new framework, the rules will roll out gradually for hydrogen projects commissioned before the start of a new year. As green energy share grows, Brussels sees this as essential for planning and building renewable electricity generation facilities.

Hydrogen producers will be able to adjust their output on a monthly basis based on contracted renewable energies until a specified date in the future. Member States may choose to impose stricter rules on time correlation starting midsummer in a subsequent year.

Requirements for renewable hydrogen production will apply to both national producers and those from outside the union who wish to supply hydrogen counted toward the EU targets.

A voluntary certification system enables manufacturers from the union and from other countries to demonstrate alignment with the community framework and to trade renewable hydrogen within the Single Market with clarity and ease.

Following the adoption, new laws will be submitted to the European Parliament and the Council. They will have a defined period to review and accept or reject the proposals, with a potential extension if requested.

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