Industry is at loggerheads over whether to scrap the EU’s strict green hydrogen rules in the face of a flagging market ramp-up.
Last year, Europe fell significantly short of its target to produce 6 million tonnes of green hydrogen. Industry holds out little hope of meeting a lofty EU target of producing 10 million tonnes by 2030.
At the same time, the EU has the world’s strictest ruleset for producing the clean-burning fuel. To be considered renewable, hydrogen production must occur at the same time as when newly installed and nearby solar panels and wind turbines are generating electricity.
The rules, put in place to prevent electrolysers running on coal power producing ‘green’ hydrogen, are increasingly coming under fire.
A coalition of fuel lobby groups called for a “more pragmatic” approach to hydrogen rules, which one insider frankly put as “getting rid” of the bloc’s restrictive renewable hydrogen framework, last week.
Striking a similar tone, Berlin pushed for a rule relaxation late last year. “The requirements often do not allow the economic realisation of electrolysis projects in Germany,” said Vice-Chancellor Robert Habeck in a letter sent to Brussels.
On the other side, the pro-renewables hydrogen coalition, featuring industry players and renewable equipment producers, says guaranteed demand for the cleanest hydrogen is needed, not changing the rules, according to a letter from today seen by Euractiv sent by three industry associations.
They are being tentatively supported by many of the bloc’s bureaucrats. The rules were created “to ensure that the development of electrolysers goes hand in hand with the expansion of renewable energies” the Commission said in its response to Berlin, seen by Euractiv.
“Let’s see how long they can hold the line,” mused a source familiar with the issue.
The Commission has until July 2028 to decide on whether its stringent rules hamper the market ramp-up, but has said “reliable indicators” may change its mind before then.
A first flashpoint for both sides will be the final adoption of the EU’s legal definition of what Brussels calls ‘low-carbon’ hydrogen, which will be cheaper than green hydrogen, but not as clean.
After an initial draft was slammed by the nuclear lobby for being too restrictive on nuclear-made hydrogen, other voices are now making themselves heard.
“We see a very ideological and prescriptive approach here,” said German MEP Christian Ehler, who negotiates energy laws for the centre-right European People’s Party.
It’s time to make some changes, he suggests. “That is not going to work in the face of the lacking ramp-up of the hydrogen market in Europe,” Ehler said.
The Commission has until 6 August to make its final proposal.
One thing both sides of the argument can agree on, however: Brussels must force manufacturers to take hydrogen, be it green or clean, off their hands, and potentially subsidise large-scale purchases, as part of its expected ‘lead market‘ policy to help get them off the ground.
[DC/OM]
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