Renewable hydrogen criteria key for investment

Having definitive criteria for renewable hydrogen is key to making investment decisions to launch EU initiatives that can support the growth of the industry, the European Parliamentary Research Service (EPRS) said.

EPRS notes that renewable hydrogen has the potential to play a significant role in the energy system as a versatile energy carrier and feedstock that can help decarbonise a variety of applications in heavy industry, chemical manufacturing, transportation, electricity generation and storage.

“Hydrogen can be produced through the electrolysis of water with renewable electricity, using different setups that vary in cost, impact on the electricity system and carbon emissions,” EPRS said.

Today, renewable hydrogen makes up a small fraction of total hydrogen production. Most hydrogen is produced from fossil fuels; although cheaper, it causes carbon emissions.

Demand for renewable hydrogen is expected to grow quickly as the need for climate-friendly solutions increases.

“While the falling cost of renewable electricity certainly plays a role in boosting this demand, sustaining it still requires support measures aimed at growing the market and bringing down the cost of electrolysers”.

The EPRS believes that to avoid renewable electricity for hydrogen production being diverted from other uses, it is important to ensure additionality, i.e. additional renewable electricity capacity for renewable hydrogen production.

In February, the EU Commission adopted two delegated regulations: one defining rules on renewable hydrogen production and clarifying the additionality criteria for renewable electricity and setting out a methodology to calculate lifecycle GHG emissions.

The European Parliament and the EU Council have four months to approve or reject the rules, but they cannot amend them.