Halt in EU Renewables Law due to Stalemate over Hydrogen Policies
The European Parliament, the European Commission, and the Council of the European Union were set to engage in talks over the revised Renewable Energy Directive, a key component of the EU's Green Deal Industrial Plan. However, these talks have been cancelled due to a significant stumbling block: the European Commission's failure to present a key piece of hydrogen legislation, specifically, the Delegated Act on hydrogen additionality.
Markus Pieper, a centre-right MEP from Germany leading the negotiations, has taken a firm stance on the issue. He has cancelled the talks, citing the Commission's lack of an updated version of the Delegated Act as the reason. This act is crucial for defining how much "additional" renewable electricity is needed for synthetic hydrogen to qualify as "green" under the revised directive.
The hydrogen industry, including Jorgo Chatzimarkakis, CEO of Hydrogen Europe, has urged for the delegated act on hydrogen additionality. Chatzimarkakis stated that both the Delegated Act and the Renewable Energy Directive are critical for the hydrogen sector, and a crucial part of the EU's Green Deal Industrial Plan.
The Delegated Act and the Renewable Energy Directive are closely interlinked. The Renewable Energy Directive defines the share of renewable energy that has to be reached in the transport sector, including hydrogen among so-called Renewable Fuels of Non-Biologic Origin (RFNBOs). The Delegated Act, on the other hand, provides the specifics for what constitutes "green" hydrogen under the revised directive.
The European Commission was tasked in 2018 to create a rulebook to ensure electrolysers producing green hydrogen use only "additional" wind or solar power, and do not deprive other sectors from scarce renewable electricity. However, the Commission's progress on this matter has been slow, leading to the cancellation of the talks.
The US, meanwhile, is charging ahead with its own Inflation Reduction Act, which creates favorable investment conditions for hydrogen producers. This could potentially put the EU at a disadvantage if the Delegated Act and the Renewable Energy Directive are not finalised in a timely manner.
The responsible European Commission official for preparing the delegated act on hydrogen additionality is not explicitly named in the available search results. However, European Commission President Ursula von der Leyen has taken ownership of the matter, making the hydrogen ruleset her priority and aligning it with her Green Deal industrial plan and the upcoming Net-Zero Industry Act.
Not everyone is happy with Pieper's unilateral action. Nicolás González Casares, the socialists' representative, and Christophe Grudler, representing the centris Renew group, have criticised Pieper for cancelling the talks. They argue that the Commission should be given more time to present its additionality ruleset, which was initially expected in December 2021.
In September 2022, Pieper tabled an amendment to the Renewable Energy Directive that would have opened the door to widespread hydrogen production, regardless of the electricity source. This amendment, if passed, would have curtailed the Commission's ability to regulate hydrogen via the additionality rules.
As the EU strives to double the amount of renewables and target a 40-45% share by 2030, the delay in finalising the Delegated Act and the Renewable Energy Directive could prove to be a significant hurdle. The EU executive will need to address this issue promptly to ensure the success of its Green Deal Industrial Plan and maintain its competitive edge in the global hydrogen market.
