欧洲氢能市场现状报告2024 State of the European Hydrogen Market Report

June2024

2024StateoftheEuropeanHydrogenMarketReport

OIESENERGYCOMMENT

MartinLambert,AlexBarnes,AndreiMarcu,OlivierImbaultAdithyaBhashyam,MartinTengler,ChiaraCavallera,GabrieleRomeo

2

Thecontentsofthispaperaretheauthors’soleresponsibility.Theydonotnecessarilyrepresenttheviews

oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.

KeyTakeaways

•Developingahydrogeneconomyisoneofthecriticalrequirementsfortheachievementofthe2050NetZerotargetaswellasintheconsiderationoftheinterim2040target.

•LikemanyoftheEUclimatepolicies,hydrogenpolicyiscurrentlyoverlyregulatoryinnature,ratherthanamoremarketdrivenapproachwithtechnologicalneutrality.

•In2023,importantprogresshasbeenmadeincompletingtheregulatoryframeworkonthelow-carbonhydrogenmarketintheEUandUK.However,someimportantpartsofthepoliciesarestillmissing,particularlyintheEU.

•TheEUandUKregulatoryapproachesaredifferent:(1)theUKistechnologyneutral,aslongasitissustainable,thatis,aslongasthehydrogen’scarbonintensityislowerthan20gCO2e/MJ,whiletheEUrequirestechnologytobeonlyrenewable(inaccordancewithREDIIdefinition);(2)theUKframeworkincludesasetofimplementingactsandaproductionsupportapproach,whiletheEUreliesonMemberStatedecisions,inparticularonimplementationoftargetsandquotas.

•However,itistooearlytosaywhichisthewinningapproach,astheEUandtheUKhavenotmadesignificantprogressonthelow-carbonhydrogenmarketdeploymentin2023anditismostunlikelythattheEUandUKtargetsfor2030,intermsoflow-carbonhydrogenproduction,willbeachieved.

•ThelagginggrowthoftheEUandUKlow-carbonhydrogenmarkethasanegativeimpactontheenvironmentaldeliverywhichremainsmainlydependentonchangestocurrenthydrogenproductionandincreasedefficiency.Thisisdemonstratedbytheverylowlevelofcommittedsupplycomparedtobothannouncedprojectsandambitioustargetswhichhavebeenset.

•Europeangovernmentshavemadelowtomoderateprogressonninekeyperformanceindicators(KPIs)forlow-carbonhydrogen.MoreambitiouspolicyimplementationisneededtokickstartaEuropeanhydrogenmarket.

•Governmentfundingandlocalcontentrequirementsinhydrogenprojectshaveshownthemostprogress.Europehasannouncedoneofthelargestbudgetsforlow-carbonhydrogenwhichissettoleadtomorefinalinvestmentdecisionsoncefundingisallocated.However,furtherworkisrequiredtotranslatethatwillingnessintoactualprojectcommitments.DomesticelectrolysermanufacturerscurrentlydominatesalestoEuropeanhydrogenprojects,accountingfor80-90%ofsalessince2022,farexceedingtheNetZeroIndustryActtargetof40%.However,thefundingseemsconcentratedinlimitednumberofcountriesinEU.

•Moreprogressisneededonimplementingquotasforhydrogenuseandexpandingdomesticelectrolysermanufacturing.EUquotasforhydrogenusecouldcreate2-3.8millionmetrictons(Mt)ofdemandby2030,farbelowtheREPowerEUtargettouse20Mt.Theslowimplementationofquotasonanationalleveliscreatingfurtheruncertaintyforprojectdevelopers,leadingtodelaysininvestments.

•Progressonraisingdomesticsupplyanddemandislackingasmostprojectsarefailingtomakeitoutofplanningstages.Just3.6%ofsupplyplannedforcommissioningby2030ispastfinalinvestmentdecisionoroperational.Only4.5%ofsupplyneededtomeettheREPowerEUdemandtargethassignedabindingofftakeagreement.Thereisnotyetsufficientincentiveforpotentialofftakerstocommittopurchasequantitiesoflow-carbonhydrogentosupportthetargets.Theenduseformuchproposedhydrogensupplyisunclear.

•Overthenext12months,keythingstolookforwhichcouldindicatesignificantprogress:(a)howmanyoftheprojectswhichwonthefirstEuropeanHydrogenBankauctionactuallyprogresstoFIDandstartconstruction,(b)whethersignificantFIDsaretakenonUKlow-carbonhydrogenprojects

(c)howmanyfirmofftakeagreementsaresignedbetweencustomersandsuppliers.

1.Background

TheStateoftheEUHydrogenReportisanindependentinitiativethatisnotintendedtoduplicateorreplacemandatedworkundertakenbytheEUorotherinstitutions.

Thereportisintendedasa‘snapshot’,providingpolicymakersandstakeholderswithanoverviewofhowtheEuropeanhydrogenmarketisprogressingeachyear,basedonthepreviousyear’sdata.Despitethelimitationsimposedbytheavailabilityofpubliclyaccessibledata,theReportanalysesrelevantkeyperformanceindicators(KPIs)toassessthestatusandthedevelopmentoftheEUhydrogenmarket.

ThisreporthasbeenthesubjectofstakeholderconsultationsorganisedbytheauthorsandfeedbackhasbeenprovidedbydifferentstakeholdersincludingNGOs,thinktanks,academia,policymakers,marketparticipants,andindustryrepresentatives.

Theviewsexpressedinthisreportaresolelythoseoftheauthorsintheirpersonalcapacityanddonotreflecttheopinionsofanyassociatedinstitutions.

2.Introductiontohydrogen

Ascontextfortherestofthereport,thissectionintroducesthetopicofhydrogenaspartofadecarbonised

energysystem,highlighting(a)thedemanddriversforlow-carbonhydrogen,(b)thepotentialproductionroutesand(c)theinfrastructurerequirements.Itconsiderssomeofthekeychallengesandpossiblepathsforwardwhichwillhelptointerpretthedatapresentedinsubsequentsections.FurtherdetailsonmanyoftheissuesraisedinthissectioncanbefoundinarecentOIESpublication“CleanHydrogenRoadmap

”1.

Demanddriversforlow-carbonhydrogen

Inthisreport,wedefinelow-carbonhydrogenashydrogen,regardlessofproductionprocess,withasignificantlylowercarbonfootprintthantraditionalfossilfuelderivedhydrogen.

Theunderlyingandmostimportantobservationisthatatthistime,thedriverforlow-carbonhydrogendemandisgovernmentdecarbonisationpolicy.Thevastmajorityofhydrogencurrentlyusedisinoilrefining,ammonia-basedfertilisersandotherpetrochemicals.Nearlyallofthathydrogenis“high-carbon”fossil-fuelderivedhydrogen(whenproducedfromnaturalgas,1tonneofhydrogenproducesaround10tonnesofCO2),andoncurrentprojections,anyformoflowercarbonhydrogenwillbeatsignificantlyhighercost.

Similarly,potentialnovelusesofhydrogen(e.g.reductionofironore,decarbonisationofaviationandinternationalshipping)arealsohighercostthancurrentalternatives.Thus,intheabsenceofgovernmentpolicy,significantdemandforlow-carbonhydrogenwouldnotexistascustomerswouldtendtochoosethelowercostalternatives.Forthisreason,thisreportcontainssectionsontheregulatoryandpolicyframeworksupportinghydrogendevelopmentintheEUandtheUK.

Assumingthattheunderlyingdecarbonisationpolicydriverisinplace,hydrogenisnotauniversalsolutionforallsectorsanditssuitabilityvariesbyenduse.Theseprioritiesmayevolveovertimeastechnologydevelopswhichmayimpacthydrogen’scompetitivenesscomparedtootherdecarbonisationalternatives.Anunderlyingprinciplewhichappearsunlikelytochangeisthat,whereverfeasible,directelectrificationislikelytobemoreefficient,lowercostandhencepreferabletouseofhydrogen.

Hydrogenwill,however,benecessaryinsomeapplications.Firstly,thereisaneedtodecarbonisethecurrenthigh-carbonhydrogenuseasafeedstockinrefineries,ammoniaandpetrochemicals,asreferredtoabove.Currentglobalhydrogendemandisestimatedat95milliontonnesofwhicharound8milliontonnesisinEurop

e2.

Lessthan1milliontonnesofcurrentglobalhydrogendemandisfromlow-carbonsources.

1/publications/clean-hydrogen-roadmap-is-greater-realism-leading-to-more-credible-paths-forward/

2IEAGlobalHydrogenReview2023

/reports/global-hydrogen-review-2023

3

Thecontentsofthispaperaretheauthors’soleresponsibility.Theydonotnecessarilyrepresenttheviews

oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.

Hydrogenshouldalsobeusedforthedecarbonisationofsomeotherindustrialapplications,particularlyintheironandsteelindustry.Withaneedtomoveawayfromuseofcoalinblastfurnaces,oneofthemostpromisinglow-carbonalternativesisuseofhydrogeninthedirectreductionofiron(DRI)process.Somesignificantdemonstrationprojectsareunderconstruction,notablyin

Sweden3.

OtherEuropeansteelmakersarealsodevelopingplansforintroductionofDRIintotheirprocesses.Oneuncertaintywhichwillbeimportanttotrackoverthecomingyearsistheextenttowhichthetransitiontolow-carbonhydrogenmayresultinsomeindustrialrelocation:therecouldbealogicforDRIprocessestobecarriedoutinregionsoftheworldwiththelowestcostrenewablepowerandsuitableironore(e.g.Australia,SouthAmerica)ratherthanimportinglow-carbonhydrogenforaDRIprocessinEurope.

Athirdareafortheuseofhydrogenwillbeinproductionofhydrogenderivativesasammoniaand“e-fuels”–synthetichydrocarbonsderivedfromrenewablehydrogencombinedwithacarbonsource(preferablybiogenicorotherwisenon-fossilcarbon).Itislikelythatovertimesomeexistingoilrefinerieswillevolveintoe-fuelproductionfacilities,probablywithintegratedlow-carbonhydrogenproduction.

Inallofthesefirstthreeuses,itisnotablethathydrogenisbeingusedasafeedstocktoanindustrialprocessratherthandirectlybeingusedasanenergyvector.Theremainingpotentialusesofhydrogenareasanenergyvector,butheretherewillbegreatercompetitionfromotheralternatives.

Hydrogenislikelytoplaysomeroleinlong-durationenergystorage,inordertobalancepowergridsattimeswhenthereisinsufficientwindandsolargenerationandthestoragecapacityofbatteriesandothersourcesofflexibilityhasbeenexhausted.ArecentreportconsideringthefutureGreatBritainelectricitysystemconcludedthattherecouldbeaneedforbetween60and100TWh(2to3milliontonnes)ofhydrogenstorageinundergroundsaltcaverns–oraboutdoubletheenergystoragecapacityofthecurrentnaturalgasstoragecapacityintheUK–toprovidesecurityofsupplyforperiodsoflowwindandlowsun

.4

Finally,hydrogenmayplaysomeroletosupportdirectelectrificationinareaslikeroadandrailtransport,spaceheatingandindustrialheat.Inrecentyears,however,asbatteryandheatpumptechnologyhasdevelopedandreducedincost,theroleofhydrogeninsuchareasappearstobelimitedtosmallerandsmallernicheapplications(forexampleglassmanufacturingandverylong-distanceroadtransportwheredirectelectrificationisparticularlychallenging).

Low-carbonhydrogenproductionroutes

Thetwoleadingcontendersforlow-carbonhydrogenproductionare(a)electrolytichydrogenusingzero-carbonelectricitysuchasrenewablesornuclear(called“green”hydrogenifrenewablesareused)and(b)hydrogenfromnaturalgaswithcarboncaptureandstorage(CCS)(sometimescalled“blue”hydrogen).Bothrouteshavedistinctadvantagesandchallenges.

Electrolytichydrogenhastheadvantageofbeingpotentiallyzero-carbonbutrequiressignificantamountsofpowergenerationinadditiontothatrequiredforimmediateelectricitydemand.Forexample,theREPowerEUtarge

t5

of10milliontonnesrenewablehydrogenproductionwithinEUby2030wouldrequire500TWhofadditionalpowergeneration–or18percentofEU’selectricityproductionin202

16

–andover

125GWofelectrolysercapacity,soisveryunlikelytobeachievable.

InsomepartsofEurope,nuclearpowerisanalternativesourceoflow-carbonelectricitytopowerelectrolysers:bothwillbeconsideredinouranalysis.Inadditiontothescalechallenge,electrolytichydrogenisalsoestimatedtobeconsiderablymoreexpensivethanexistinghighcarbonhydrogen.Whileactualcostsvaryfromcasetocase,indicativedatasuggeststhatcurrenthydrogencostsareintherange1to3€/kg,electrolytichydrogenislikelytobewellinexcessof5€/kg.

3Hybrit

https://www.hybritdevelopment.se/en/

andH2GreenSteel

/

4

/-/media/policy/projects/large-scale-electricity-storage/large-scale-electricity-storage-report.pdf

5

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52022SC0230

6https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_production,_consumption_and_market_overview

4

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oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.

CCS-enabledhydrogenhashadamixedreceptionindifferentEuropeancountries.TheUKhasincludeditinitslow-carbonhydrogenpoliciesfromtheoutset,andtheNetherlandshasdevelopedplansforCCS(includingthePorthosprojectwhichhastakenthefinalinvestmentdecisio

n7)

.Originally,EuropeanUnionpolicyfocusedalmostexclusivelyonelectrolytichydrogen,butduring2023,severalpolicyannouncementsindicatedagrowingacceptancethatCCSwouldplayasignificantroleindecarbonisation

.8

WhileCCS-enabledhydrogenislikelytobelowercostthanelectrolytichydrogen,developmentoftherequiredinfrastructureatsufficientscalewillremainchallenging.

ThisreportwilltrackthestatusofbothelectrolyticandCCS-enabledhydrogen.

Midstreaminfrastructurerequirements

Forhydrogentoreachitscustomersitisimportanttoconsiderthewholesupplychain,andmidstreaminfrastructureisavitalpartofthatchain.

Mosthydrogentodayisusedveryclosetoitspointofproduction,recognisingthattransportofhydrogenaddssignificantadditionalcosts.Tobalancedemand,however,sometransportwillberequired,althoughtheextentofthisisdifficulttopredictatthisearlystageinthedevelopmentoftheindustry.Pipelinesarelikelytobethemostcost-effectivewaytotransporthydrogenoverdistancesuptoaround

2000km9,

sufficientformostintra-Europeanrequirements.Adifficultdilemmaisthelinkingofinvestmentinpipelineinfrastructurewiththetimingofproductionanddemandtomakeuseoftheinfrastructure.Iflargepipelinecapacityisbuiltwellinadvanceoflikelydemand,thereisariskthattheinvestmentmaybecomearegretandthepipelineastrandedasset.Atthisstage,itislikelythatinitialhydrogentransportwilltakeplacewithinindustrialclusters,withsubsequentlinksbetweensuchclusters.

Anotherkeypartofmidstreaminfrastructureisthedevelopmentofsufficienthydrogenstoragecapacity.Withpotentiallyintermittentproduction(linkedtorenewablepowergeneration)andmoresteady-statecustomerdemand(forexampleinanindustrialprocess),storagewillplayavitalrole.Asnotedearlier,useofhydrogenforbalancingpowergridsattimesoflowrenewablegenerationcouldalsorequiresignificantstorage.LargescalehydrogenstoragehasbeendemonstratedinundergroundsaltcavernsinUKandUSA,andfurtherprojectsareunderdevelopmentintheNetherlandsandtheUSA

.10

Storagewillbeparticularlychallenginginlocationswithoutsuitablegeologicalstoragestructures–mostcruciallysaltdepositssuitableforthedevelopmentofsaltcaverns.

Athirdpartofmid-streaminfrastructure,perhapsinthelongerterm,islikelytobedevelopmentofimportterminalsforlow-carbonhydrogenderivativeslikemethanolandammonia.Thesederivativescouldbeusedasfinalproducts(forexampleinthechemicalindustry),ortheterminalscouldbecombinedwithammoniacrackingormethanolreformingfacilitiestorecoverthehydrogen.Eachadditionalprocessstepincreasescostandcomplexityandreducesefficiencyoftheoverallsupplychain,sothecompetitivelandscapewillbeanimportantdeterminantofthespeedofdevelopmentofthesefacilities.

KeyChallengesandpathforward

Astheabovediscussionshows,allaspectsofthehydrogensupplychainhavechallenges,particularlyaroundcreatingabusinesscasetojustifyinvestments.Commercialstructures,policysupportandregulatoryframeworksareallimportanttohelpcreatethatbusinesscase.Subsidyauctions(likethoseofH2GlobalandtheEuropeanHydrogenBank)willbekeyenablerstoprovidetherequiredsupport,sothisreportwilltrackprogressofthesemeasuresand,overtime,itshouldbecomeclearerwhichpolicymeasuresaremosteffectiveatachievingresults.

7https://www.porthosco2.nl/en/

8Seeforexample,CommissionerSimson’sspeechtotheEUCCUSforuminDenmarkinNovember2023:

https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_23_6086

9IEAGlobalHydrogenReview2023

/reports/global-hydrogen-review-2023

10

https://www.hystock.nl/en/about-hystock/the-project,

/hubs/

5

Thecontentsofthispaperaretheauthors’soleresponsibility.Theydonotnecessarilyrepresenttheviews

oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.

3.Regulatorydevelopments

ThegoalofthischapteristoofferanoverviewofthehydrogenregulatoryframeworkintheEUandintheUK.Sincethereportisa‘snapshot’of2023,thedevelopmentswhichoccurredinthatyeararespecified.AfterdiscussingtheEUandtheUKrespectiveframeworks,acomparisonofthetwohasbeenmadetohighlighttheirsimilaritiesanddifferences.Finally,inordertoprovideaglancetotherestoftheworld,USandChinahydrogenmarketsarementioned.

3.1.EURegulatoryDevelopments

3.1.1OverviewofEUPoliciesConcerningHydrogen&Financing

Thissubchapterfocusesontwotopics.Thefirstpart(3.1.1)identifiesandprovidesanoverviewofthepoliciescontainingprovisionsonhydrogen,specifyingwhichaspectsofhydrogentheyaddress,andhowtheyimpactthecomponents(supply,demand,infrastructure)oftheEUhydrogenmarket.Thesecondpart(3.1.2)offersaninsightinthefinancingoftheEUhydrogenframework,categorizingtheinstrumentsavailableaccordingtothetypeofsupporttheyprovide,theirdeploymentstage,thetechnologiestheycover,andwhethertheyareopentoapplicationsfromallEUMemberStates.

OverviewofEUPoliciesConcerningHydrogen

TheTablebelowclassifiesthepolicieswhichcontainprovisionsonhydrogenaccordingtowhethertheyareimpactingthesupply,demandand/orinfrastructure.

Table1:ComponentsoftheEUH2regulations

ComponentsofH2Market

Policies(communications,directives,regulations,delegatedacts)

Supply

EUHydrogenStrategy,REDIIDelegatedActs,HydrogenandDecarbonisedGasMarketpackage,EUTaxonomy,NetZeroIndustryAct,REPowerEUPlan,RefuelEU

Aviation,CriticalRawMaterialsAct

IndustrialandTransportDemand

EUHydrogenStrategy,recastRenewableEnergy

Directive(REDIII),REPowerEUPlan,CarbonBorderAdjustmentMechanism(CBAM),FuelEUMaritime,

RefuelEUAviation,EUETS

Infrastructure

EUHydrogenStrategy,HydrogenandDecarbonisedGasMarketpackage,Net-ZeroIndustryAct,AlternativeFuelsInfrastructureRegulation(AFIR),Trans-European

TransportNetwork(TEN-T),Trans-EuropeanNetworksforEnergy(TEN-E),CriticalRawMaterialsAct

EUHydrogenStrateg

y11

ObjectivesoftheEUHydrogenStrategy:theHydrogenStrategyservesasaninitiallong-termpolicydeclarationbyproposingastrategicroadmapforhydrogenuptakeintheEUeconomy.Assuch,itelaboratesonthetechnologicaldeploymentphases,supportingpolicyframework,marketandinfrastructuredevelopment,researchandinnovationopportunities,andinternationaldimension.

11

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0301

6

Thecontentsofthispaperaretheauthors’soleresponsibility.Theydonotnecessarilyrepresenttheviews

oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.

Itsetanintermediate2030objectiveofupto10milliontonnesofrenewablehydrogen(seeChapter4,KPI3)producedintheEUtoreachcarbonneutralityin

205012.

Low-carbonhydrogenisconsideredasatransitionalenergysource.

Onhydrogendemand,theStrategyenvisagestheneedfordedicateddemand-sidepoliciesforindustrialdemandtograduallyincludenewapplications,includingsteelmaking,refineries,chemicalapplicationsandtransportapplications.Onthesupplyside,theimportanceofdevelopingandscalinguphydrogensupplychainismentioned.Finally,theStrategyrecognizedtheneedforanEU-widelogisticalinfrastructurewhichiskeytotransporthydrogenfromtheareaswhereitisproducedtotheareaswhereitisneeded,linkingproducersandconsumers.

EUTaxonom

y13

•ObjectivesoftheEUTaxonomy:establishingaclassificationsystemthatidentifieswhicheconomicactivitiescanbeconsideredenvironmentallysustainable,withintheframeworkoftheEuropeanGreenDeal.Inparticular,theEUTaxonomyaimstohelpcompaniesinmakinginformedsustainableinvestmentdecisions,beeligibleforgreenbonds,andlimittheriskof“greenwashing”.Thisisincontrasttoamarket-basedapproachthatwouldbefocusedonemissionsintensityonly.

•Hydrogenprovisions:theproductionofhydrogenandotherhydrogen-basedfuelscanbeconsideredsustainableundertheEUTaxonomyeveniftheenergyusedisnotrenewable,aslongastheproductachievesa70percentreductioninlifecycleGHGemissionscomparedtothefossilfuelcomparatorof94g

CO2e/MJ14(28.2

gCO2e/MJ).Byprovidingalistofenvironmentallysustainableeconomicactivities,theEUtaxonomywillhaveanimpactoninvestments,redirectingthemtothoseactivitiesthatareincludedinthescopeoftheregulation.

Fitfor55package

TheFitfor55packagedoesnothaveaspecificdirective/regulationonhydrogen.TheEUhydrogenregulatoryframeworkisscatteredacrossthebuildingblocksoftheFitfor55.Theregulationsthatdirectlyconcernhydrogenare:

a)HydrogenandDecarbonisedGasMarketpackagerevisio

n15

•ObjectivesoftheHydrogenandDecarbonisedGasMarketpackage:enablingthemarkettodecarbonisegasconsumption,ensuringenergysecurity,facilitatingtheestablishmentofoptimalandspecializedinfrastructureforhydrogentoensureamoreintegratednetworkplanningbetweenelectricity,gas,andhydrogennetwork

s16.

•Hydrogenprovisions:theHydrogenandDecarbonisedGasMarketpackageestablishesasystemofterminologyandcertificationoflow-carbonhydrogenandlow-carbonfuels.Tobedeemedassuch,low-carbonhydrogenshallmeetaGHGemissionreductionthresholdof70percentvsthefossilfuelcomparator.However,thisdefinitionisincompleteuntiltheDelegatedAct(DA)thatwillspecifythemethodologytoassesstheGHGemissionssavingsfromlow-carbonfuelsispublished(see3.3Policygapsparagraph).Whenitispublished,producerswillhavetocomplywiththeemissionsthresholdsstatedintheHydrogenandDecarbonisedGasMarketpackage.

12

ibidem

13

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32021R2139

14asoutlinedinSection3.10ofAnnexIoftheClimateDelegatedActundertheTaxonomyRegulation

https://eur-

lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32021R2139

15

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2021%3A804%3AFIN&qid=1640001545187

16ibidem

7

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oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.

8

Thecontentsofthispaperaretheauthors’soleresponsibility.Theydonotnecessarilyrepresenttheviews

oftheOxfordInstituteforEnergyStudiesoranyofitsMembers.

b)RenewableEnergyDirective

•ObjectivesoftheRenewableEnergyDirective:settingalegalframeworkforthedevelopmentofcleanenergyacrossallsectorsoftheEUeconomy.

•Hydrogenprovisions:

b.1)REDIIdelegatedAct

s17

(thesetwoDelegatedActsfocusonthedefinitionofwhatisrenewablehydrogenintheEU):

oThefirstDelegatedAct

18

(namely‘DelegatedActestablishingaminimumthresholdforgreenhousegas(GHG)emissionssavingsofrecycledcarbonfuels’)definesunderwhichconditionshydrogen,hydrogen-basedfuelsorotherenergycarrierscanbeconsideredasRenewableLiquidandGaseousFuelsofNon-BiologicalOrigin(RFNBOs).Inparticular,therulesaimtoensurethatRNFBOsareonlysourcedfrom"additional"renewableelectricit

y19

andcomplywithtempora

l20

andgeographicalcorrelatio

n21

criteria.

oThesecondDelegatedAc

t22

(namely‘DelegatedActonamethodologyforrenewablefuelsonnon-biologicalorigin’)providesamethodologyforcalculatinglifecycleGHGemissionsforRFNBOs.Thismethodologyconsidersthewholelifecycleofthefuelstocalculatetheemissionsandtheassociatedsavings.Inparticular,usingrecycled-carbonfuelsshouldleadtoaminimum70percentdecreaseinGHGemissionscomparedtothefuelstheyreplace.

TheseDelegatedActswillimpactthesupplyofhydrogen.ProducerswillhavetocomplywiththecriteriastatedintheREDIIDelegatedActstoensurethatthehydrogentheyproducecanbeclassifiedasRNFBOs. b.2)RecastRenewableEnergyDirective(REDIII

)23:

•ObjectivesofREDIII:theDirectivemandatesthattheEU’senergymixbecomposedofatleast42.5percentrenewableenergyby2030,withanindicativegoalof45percentrenewableenergy.TheobligationisonMemberStates.

•Sectoraltargets:REDIIIsetstargetsforRFNBOsinindustryandtransportasdetailedbelow.

RFNBOsinindustry(Article22a):REDIIIsetanannualtargetofa1.6percentagepointsincreaseintheuseofrenewableenergyby2030.Additionally,atleast42percentofthehydrogenusedinindustryshouldcomefromRFNBOsby2030increasingto60percentby2035.However,theMemberStateshavethepossibilityto‘discount’theshareofRFNBOby20percentin2030iftheymeetthesetwoconditions(Article22b):

-First,thecountrymustbeontracktomeetitsnationalcontributiontotheEU’soveralltargetfor42.5percentrenewab