The implementation of the regulation has been delayed for more than a year now due to a dispute over what is defined as ‘renewable’ hydrogen.
The European Commission on Monday proposed new rules under which hydrogen produced with nuclear energy is to be considered green.
Rather than being labelled as “renewable” though, hydrogen made using nuclear electricity will be termed as “low-carbon” hydrogen.
According to EU officials, there is “no place” for nuclear energy when producing renewable hydrogen, even if this low-carbon alternative will be allowed in the mix.
The new rules are part of two delegated acts that the European Commission has implemented, after a year-long delay.
France had been pushing to include so-called red hydrogen – made using nuclear electricity – in the green rules, but there had been opposition from both Germany and Spain, with a compromise seemingly made to have the low-carbon alternative.
Kadri Simson, the European Commissioner for Energy, said the measures will allow for greater confidence in the emerging hydrogen market.
“Renewable hydrogen is a crucial component of our strategy for a cost-effective clean energy transition and to get rid of Russian fossil fuels in some industrial processes,” she said.
“Clear rules and a reliable certification system are key for this emerging market to develop and establish itself in Europe. These delegated acts provide much-needed legal certainty to investors and will further boost the EU’s industrial leadership in this green sector.”
There are no financial incentives for being labelled as either a renewable or low-carbon hydrogen, but member states can choose to give state aid to producers of either, according to EU officials.
The rules have been welcomed by the industry, with Hydrogen Europe CEO, Jorgo Chatzimarkakis, saying they are crucial towards determining compliance with the EU’s Renewable Energy Directive targets, but could end up making things more expensive.
“A far-from-perfect regulation is better than no regulation at all. At last, there is clarity for industry and investors and Europe can kick-start the renewable hydrogen market,” Chatzimarkakis said.
“This comes at a critical time, with the USA setting a very high benchmark, with their Production Tax Credits, offered under the Inflation Reduction Act, attracting more and more investments towards their clean hydrogen market.”
However, some experts disagree, including Professor Samuel Furfari, a chemical engineer at the Free University of Brussels and European Commission official for over 36 years working on hydrogen, who told Euronews that the new rules are a waste of time.
“What the European Commission has just announced is a bureaucratic aberration that should be taught in universities as an example not to be followed,” Furfari said. “It is a cannibalisation of the meagre green electricity that should be sent to the electricity grid.
“It is strange that the European Commission continues to create a bureaucracy that will cannibalise the small amount of green electricity and ultimately fund Chinese companies, as the EU buys not only solar panels and wind turbines [from China] but also electrolysers.”
The European Council and Parliament will now have two months to assess the delegated acts, after which they can either accept or reject the rules. This period can be extended by another two months upon request.