The European Commission will have to steer a path between the need to accelerate the rollout of green hydrogen infrastructure and the need to ensure this infrastructure produces hydrogen that is sufficiently low-carbon, according to feedback on its proposed laws.

Under the current delegated act proposals there are two options for power supply for an electrolyser that creates hydrogen that can be defined as renewable—direct connection and grid connection. Direct connection requires the electrolyser to be linked up to to an additional renewable asset with some supplementary criteria, while grid connection requires no additional renewable asset but much stricter criteria.

Under direct connection, the renewable asset and the electrolyser must come into operation within three years of each other, and the renewable asset must not be connected to the grid.

“Now the goal is not to reduce emissions put to provide economy with certain amount of hydrogen” Lovisolo, Bellona

Under grid connection, there are three ways power to an electrolyser can be considered renewable under the rules: when hydrogen is produced within a grid where the average share of renewable power is 90pc; when the hydrogen producer has a power-purchase agreement (PPA) with various criteria attached; or when curtailed electricity is used.

“The way the two delegated acts are built [means] you can decide which one applies the best for you to roll out electrolyser capacity,” Marta Lovisolo, junior policy adviser with NGO Bellona told Hydrogen Economist. “There are lots of loopholes.”

One problem is that, for countries where the average share of renewable power is 90pc—likely to be Norway, Sweden, France and Austria—a developer can plug in an electrolyser without having to build any additional renewable capacity.

Although the hydrogen produced will be renewable, other demand is likely to be pushed towards fossil-fuel sources.

“New demand needs to be met with new supply,” says Lovisolo, adding this is vital because, to produce the 10mn t/yr hydrogen targeted by the Commission by 2050, some 500TWh of additional electricity is needed—more than the current total demand of France.

Despite this, some organisations are still pushing for the 90pc threshold to be reduced. Industry body Hydrogen Europe says a threshold of 70pc “could reward and encourage other countries to invest in renewable power”.

PPA criteria

The criteria for PPAs is also subject to the capacity versus climate debate. Under the current proposals a renewable asset must be in the same or adjacent geographical bidding zone for electricity, or an offshore bidding zone. Hydrogen must also be produced using power from the PPA during the same one-hour period that the renewable electricity is produced.

These criteria have come in for particular criticism from industry, with RWE CEO Markus Krebber calling them problematic.

“This temporal correlation means that electrolysers would have to sit idle during any extended calm period,” he says. “The result would be an unnecessary increase in the price of hydrogen… and would make it almost impossible to ensure a continuous supply to industry.”

10mn t/yr – EU’s domestic renewable hydrogen production target

The rules also outline a transitional phase for the implementation of additionality and temporal correlation criteria. Until 2027, hydrogen can be produced in the same calendar month rather than the same hour if it is grid connected. But, more crucially, the requirements on additionality that require a direct connection asset to come into existence within three years of an electrolyser do not apply.

“Every electrolyser you plug in before 2027 will never have to comply with the additionality rule, even after 2027,” says Lovisolo.

While Bellona is worried this will cause a rush of electrolyser construction that will strain the grid and push other demand towards fossil-fuel consumption, Hydrogen Europe and others say it will help kickstart the industry.

“This is new and positive,” says the Hydrogen Europe consultation response. “We believe that first movers should be rewarded.”

Overseas rules

All of these rules will also apply to hydrogen imported to the EU—which by 2050 will amount to 50pc of demand, some 10mn t/yr. But monitoring and verifying the renewable nature of this hydrogen will be even harder in overseas jurisdictions than it will within the bloc, according to Bellona.

“It is already complicated to verify in Europe—I struggle to believe that we can check it at the borders,” she says.

Some green hydrogen verification schemes, such as CertifHy, are already looking to establish themselves globally, but their criteria will be different from those of the EU.

Bellona believes the EU has undermined its own climate ambitions in a rush to meet ever-increasing hydrogen targets in a panicked effort to reduce reliance on Russian gas.

“Now the goal is not to reduce emissions put to provide the economy with certain amount of hydrogen,” says Lovisolo.

Hydrogen Europe CEO Jorgo Chatzimarkakis notes that this consultation is just the start of the debate, and that the final law can still strike a balance between the need to accelerate the deployment of renewably produced hydrogen and the need to ensure emission reductions are met. 

“Our industry, the hydrogen industry, is dedicated to reducing emissions and is not the backdoor to continued use of fossil fuels,” he says.

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Author: Tom Young