European Commission Finalises Definition of Low-Carbon Hydrogen
The European Commission has published its long-awaited Delegated Act that sets clear criteria for what qualifies as “low-carbon hydrogen” and its derivatives in the EU, a move designed to bring much-needed certainty to Europe’s developing hydrogen sector.
What Does the Delegated Act Define?
The new rules specify that for hydrogen to be considered low-carbon, it must demonstrate at least a 70% reduction in greenhouse gas (GHG) emissions across its life cycle compared to the fossil-based equivalent. This threshold aligns with and even goes beyond comparable standards in other global jurisdictions such as South Korea and Japan.
Key Provisions
- Scope: The regulation covers hydrogen produced by electrolysis that doesn’t meet the strict requirements for “renewable fuel of non-biological origin” (RFNBO), as well as so-called “blue” hydrogen, which is made from natural gas with carbon capture and storage (CCS).
- Eligibility: Hydrogen made from natural gas with high rates of upstream methane leakage will not be considered “low-carbon,” addressing concerns about the full climate impact of such production routes.
Methodology and Enforcement
The Act introduces a detailed, harmonized methodology that requires hydrogen producers to account for all greenhouse gas emissions throughout the production process, including:
- Emissions from supplying inputs (e.g., natural gas or electricity)
- Processing, transport, and distribution of hydrogen
- Methane emissions associated with natural gas extraction and supply
These requirements will apply both to EU hydrogen producers and to overseas producers who want to export hydrogen to the EU, ensuring a level playing field.
Adapting the Rules by 2028
Recognizing Europe’s diverse energy landscape, the Commission has specified that the rules could be revisited by July 2028. Adjustments would account for factors such as the integration of nuclear power purchase agreements (PPAs) and verifiable regional or country-specific methane leakage data, ensuring the rules remain robust and adaptable as technologies and measurement techniques evolve.
Industry Reaction
The Commission’s move provides long-awaited legal certainty for hydrogen project developers and is expected to accelerate investment in clean hydrogen infrastructure. However, environmental advocates caution that the reduced default values for CO₂ and the handling of methane emissions could risk greenwashing if not properly enforced and transparently monitored.
Next Steps
The Delegated Act now enters a scrutiny period in which the European Parliament and Council may object but cannot amend the Act. If there is no objection within the designated period, the Act will come into force, setting a new standard for low-carbon hydrogen production in Europe[2].
This comprehensive legislative move completes the EU’s regulatory framework for hydrogen, laying a foundation to scale up clean hydrogen production, reduce carbon emissions, and position the EU as a global leader in the hydrogen economy.
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