The European Commission proposed rules on Monday, Feb 13th, that make it more clear what types of hydrogen from its extensive rainbow will count towards its renewables target.
The new rules say that hydrogen produced from nuclear power could be considered green and included in the EU renewable energy goals. As hydrogen has turned into a central alternative energy source for Europe to support its plans to replace Russian oil and gas, and decarbonize the economy, the rules aim to incentivize investors and industries to shift from hydrogen produced from fossil fuels to hydrogen produced from renewable electricity.
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There have been heated disputes in recent months about what the European Union would count as “renewable”. France has been supporting the inclusion of hydrogen produced from nuclear power to be considered green as the country could utilize its nuclear power resources. Countries such as Germany, however, have been opposing that view.
After delays due to lobbying from capitals, Brussels has now set out three types of hydrogen that will count towards the renewable targets.
The first one includes hydrogen from production facilities directly connected to a new renewable electricity generator. Counted is also energy taken from the grid power if the local electricity zone had more than an average of 90% share of renewable power in the last year.
The rules require hydrogen producers to either directly use newly installed renewable power or sign a PPA to support new local renewable energy projects. The measure aims to stop hydrogen producers from sucking up existing renewable electricity capacity, which could risk driving up fossil fuel generation to meet overall energy demand.
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According to Hydrogen Europe CEO Jorgo Chatzimarkakis, the proposed rules are crucial towards determining compliance with the EU’s Renewable Energy Directive targets. However, they could also end up making hydrogen and other 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… 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,” he explained.