The principle of additionality — in which green hydrogen is produced using only new renewable energy capacity — is critically important to kickstart Europe’s clean H2 industry, according to the head of trade body Hydrogen Europe, but it needs to happen fast and it needs to be kept simple.
The comments come after Hydrogen Europe spearheaded a campaign that saw the European Parliament scrap the European Commission’s (EC) proposed delegated act — which included the additionality regulations — causing uproar among activists and environmentalists concerned that green hydrogen producers could “cannibalise” the renewables supply.
But in conversation with Recharge’s Leigh Collins during a live event at the Recharge Hydrogen Summit in Hamburg yesterday (Thursday), Hydrogen Europe chief executive Jorgo Chatzimarkakis explained that the organisation’s issue with the EC’s additionality proposal was due to its complexity, and specifically the requirement for producers to account for their renewable energy supply on an hour-by-hour basis.
“We ditched nothing,” he told the event at the H2Expo, part of the WindEnergy Hamburg conference. “We want additionality because we believe that additionality is the key and the catalyst for an uptake of renewable hydrogen. But we have to distinguish between additionality as a principle and very complex rules to prove that.”
As things stand, the pared-back regulations will be included within the Renewable Energy Directive II (RED II), a vast piece of legislation that is currently being overhauled.
But the European Parliament is now in consultation with the EU’s Czech-led presidency about putting together a framework for a new delegated act from the Commission, a necessary step, Chatzimarkakis said, warning that the RED II overhaul could take an additional two years to come into force.
“That’s too long,” he said, adding: “We need a delegated act. We invite the Commission to come up with a pragmatic, realistic proposal, making clear there is additionality, but you don’t need to prove it every 15 minutes. You can prove it every month.”
Daniel Fraile, chief policy officer at Hydrogen Europe, later told the Recharge Hydrogen Summit that the hour-by-hour requirement would have required hundreds of thousands of gigawatt-hours of battery storage capacity attached to the new renewables projects in order to allow developers to run their electrolysers at almost full load. The more hours per day an electrolyser is in operation, the lower the levelised cost of hydrogen.
But Fraile said that the sheer number of batteries required to supply that energy storage meant that it would be “impossible” for developers to produce green hydrogen under the hourly criteria.
“The largest battery storage systems are 2-3GWh, so it's out of [the] question, you cannot do that,” he explained, adding that it would double the cost of green hydrogen production, making projects unviable.
“We consider that if you go to temporal correlation monthly, you can do that without storage.”
‘We have a problem’
Europe is still a major player in electrolyser manufacture and hydrogen investment, but risks losing competitiveness on the global stage to the US, which recently legislated for a maximum $3/kg tax credit for green hydrogen producers, as well as to other ambitious countries such as Egypt and India.
Part of the problem is the relatively slow progress of EU-led initiatives, some of which occur only as a response to initiatives launched in the US or elsewhere.
The Hydrogen Bank, for example, was announced unexpectedly by the EC this month, but almost no details are publicly available. For instance, it is still not clear whether the $3bn figure given by the Commission relates to a total or annual budget.
Europe’s green hydrogen industry needs the bank to be properly capitalised and implemented quickly, Chatzimarkakis believes.
“If this Hydrogen Bank is not up and running by spring next year, we have a problem,” he told the Hamburg audience.
The other problem is money, especially when big players are throwing cash at the sector in other regions, the Hydrogen Europe boss added, citing Adani’s recent $50bn splurge on green hydrogen projects in India.
“I visited India with European Commissioner [Kadri] Simson a fortnight ago and I was amazed by the private investment,” he said. “$50bn. And we come with $3bn private investment with the Hydrogen Bank.”
A video recording of the Recharge Hydrogen Summit, including Collins’ interview with Chatzimarkakis, can be watched for free by clicking here.