The European Parliament has voted through a key amendment to the Renewable Energy Directive II (RED II), scrapping “additionality” requirements at EU level, and passed binding targets for renewable hydrogen and its derivatives in industry and transport.
Under the new RED II, targets for renewable fuels of non-biological origin (RFNBOs) such as green hydrogen and green ammonia are now set at 5.7% of all fuels by 2030, including 1.2% in maritime fuels. Furthermore, 50% of industrial fuel use will have to transition to RFNBOs by 2030, rising to 75% by 2035. This will require nine to ten million tonnes of green hydrogen, according to trade body Hydrogen Europe.
Parliament waved through Amendment 13 to the RED II by just four votes, effectively scrapping the controversial Delegated Act that would have imposed EU-wide additionality regulations — requiring all renewable hydrogen producers to source electricity from dedicated green-energy projects, with grid-sourced electricity allowed only when it could be offset with dedicated supply within the hour.
Instead, renewable H2 producers will now be allowed to source electricity from the grid, provided they can verify it as green electricity by securing power-purchase agreements (PPA) from renewables installations for the equivalent amount.
The balance between PPA purchases and grid purchases would be accounted for on a quarterly basis until 2030, and thereafter on a monthly, quarterly or annual basis, as decided by the European Commission.
Hydrogen Europe had lobbied hard in favour of the amendment, arguing that the additionality rules — particularly the hourly component — would hold back the development of green hydrogen, with Europe risking a “mass exodus” to the US, especially in the wake of new US hydrogen tax credits that offer up to $3/kg of subsidies for green H2.
“[The passing of Amendment 13] will ease the implementation of the additionality principle for renewable hydrogen. MEPs have listened to the sector’s concerns that overly strict regulations would hinder the development of this crucial market,” said Hydrogen Europe in a statement.
“Hydrogen Europe fully recognises the importance, and supports, the principle of additionality but has expressed concerns regarding the practical implementation of the proposed criteria, not the principle itself. The task at hand is to find a balance between ensuring green hydrogen is produced from new renewable energy capacity and avoiding excessive constraints on a nascent market.”
Hydrogen Europe chief executive Jorgo Chatzimarkakis added: “This is yet another historical day for the hydrogen sector in Europe and globally.
“These binding targets on renewable hydrogen, and the creation of a simpler framework, are strong signals from the EU institutions to ensure the scale up of a hydrogen economy and reduce our dependency on fossil fuels. We need to bring production and demand into a right balance, and the new European Hydrogen Bank is the right instrument under which to do so.”
But others are not so pleased, arguing that green hydrogen production in the EU could now “cannibalise” the continent's renewable energy, which is needed to decarbonise the electricity supply.
Trade association SolarPower Europe (SPE) warned that the lack of firm regulation would actually make green hydrogen projects less bankable.
“[Scrapping the additionality rules] jeopardises the adoption of a robust legal definition, which would have ensured that electrolyser deployment does not depend on fossil fuels,” said Arthur Daemers, policy advisor on renewable hydrogen for SPE. “Right now, developers have dozens of projects in the pipeline, waiting for the clarification of the rules. The vote today only delays the acceleration that Europe needs in order to meet its climate and security goals.”
While the European Parliament vote means that the Commission can no longer mandate the additionality requirements, individual member states could still choose to enforce them.