Stricter EU ‘low-carbon‘ hydrogen rules would help drive clean grid-based production
On Friday 27 September, the European Commission released draft rules for what counts as ‘low-carbon’ hydrogen in the EU. Below is a statement by Frauke Thies, Executive Director of Agora Think Tanks.
29 September 2024. “The proposed definition for ‘low-carbon’ hydrogen in the EU provides much-needed investment certainty, in particular for producers of fully renewables-based hydrogen competing with low-carbon projects on the same market.
Hydrogen is a clean-burning fuel, but whether it reduces overall greenhouse gas emissions depends on how it is produced. Feeding an electrolyser with power from the grid in the EU can today emit more than producing hydrogen using fossil gas without capturing the associated emissions. As more wind and solar power come online, grid-based hydrogen becomes cleaner, while making an important contribution to Europe’s energy security. Including grid-based hydrogen in the proposed rules is thus positive. To ensure that such production takes place during hours of high renewables input, a reporting requirement of hourly – instead of the proposed annual – average emissions is necessary. This would align with the existing requirements for renewables-based hydrogen and EU state aid rules.
On fossil-based hydrogen, the draft rules address key elements by, for example, stating that captured carbon only counts when it is permanently stored, including in third countries. However, the rules set only one default value for the carbon intensity of upstream gas, even though its intensity varies depending on the country or even the field that gas is imported from. This standard value is currently far below the upstream emissions of key trading partners such as Algeria or the US, and it also fails to reflect the quickly rising share of carbon-intensive liquified natural gas as part of the EU’s gas imports. Finally, a progressively lowering maximum-emissions threshold – as stipulated in the EU gas directive from 2031 – would send a strong signal for hydrogen producers to invest in best available clean technologies on Europe’s path to climate neutrality.”
For further information, see the Agora Energiewende and Agora Industry report “Low-carbon hydrogen in the EU – Towards a robust EU definition in view of costs, trade and climate protection” available below.
The announcement opened a public consultation on the low-carbon hydrogen methodology which is open until 26 October.
