European Commission mulls infringement action against RED III transposition laggards: DG Energy

The European Commission is prepared to launch infringement proceedings against EU member states that have failed to meet the May 2025 deadline for RED III transposition into domestic law, said Lukasz Kolinski, Director for Green Transition and Energy System Integration at the European Commission's Directorate-General for Energy.

Speaking during a webinar organised by Hydrogen Europe, Kolinski noted that as of May 21, only one EU member state had fully adopted renewable fuel laws governing renewable hydrogen use, with a further 10 member states partially transposing the revised renewable energy directive into national legislation.

When asked how the European Commission could encourage member states to comply with the regulatory requirement, Kolinski noted that the European Commission had already launched infringement proceedings against member states relating to the RED III directive. He noted that the directive included an obligation for member states to transpose permitting procedures into domestic legislation by mid-2024, ahead of the main deadline for the introduction of RFNBO targets within the directive.

"Infringement proceedings landed against member states [who did not meet the mid-2024 deadline]", Kolinski noted. "We are not shying away from the use of this tool [for RED III transposition]", he added. The European Commission would take into account the relative progress of transposition when assessing the degree of non-compliance.

RED III seen as critical for RFNBO uptake

A number of European market participants complained to Platts at the recent World Hydrogen Summit conference in Rotterdam in May 2025 that the lack of clarity around national level RED III transposition in general, and specific sub-targets for RFNBO use in the transportation and the industry end-user markets under RED III in particular, was contributing to delays in concluding long-term sales contracts in the renewable hydrogen market.

Kolinski sought to provide reassurance for project developers who are concerned that RFNBO requirements might be amended, categorically denying that the level of ambition for RFNBO targets might be watered down.

"The delay in RED III transposition targets is providing uncertainty to renewable hydrogen project developers as the level of compliance that industrial hydrogen consumers will face in 2030 has yet to be confirmed in the majority of member states," Matt Hodgkinson, senior hydrogen analyst at S&P Global Commodity Insights, said. "Likewise, the lack of clarity on potential fines/buyouts also means that fuel suppliers/industrial consumers cannot take an informed view on moving forward with projects or how much of a premium there will be on RFNBO hydrogen. It remains to be seen whether other member states follow the path of the Netherlands and Czechia and transpose targets significantly below that specified in RED III so as to not penalise their own domestic industry."

Turning to the gap between prevailing renewable hydrogen prices in the EU and the willingness to pay seen in a variety of end-user markets, Kolinski noted that the European Commission was planning to launch a mechanism to match supply and demand in September 2025.

Platts assessed the cost of green hydrogen production via alkaline electrolysis in Germany, backed by renewable power purchase agreements, at Eur8.13/kg ($9.31/kg) on June 5, down from a peak of over Eur14.50/kg in mid-December. That compares with Eur7.77/kg in the Netherlands on June 5.

When asked about specific measures that the European Commission could encourage to accelerate the uptake of RFNBOs within the European Union, Kolinski identified the duration of permitting procedures as a bottleneck. "Project preparation time simply takes too long," Kolinski said.

RED III forms only one part of an interlocking matrix of regulatory tools, including FuelEU Aviation and FuelEU Maritime, and the extension of the Emissions Trading System (ETS) to encompass the maritime and aviation sectors.

Red III transposition

As reported by Platts on June 3, RED III contains a series of key provisions to accelerate renewable energy deployment in the EU, setting an overall renewable energy target of at least 42.5% by 2030 at the EU level.

It also set binding targets for hydrogen-based renewable fuels of non-biological origin, requiring RFNBOs to account for at least 1% of total energy supplied to the transport sector by 2030, and at least 42% of hydrogen in industry, rising to 60% from 2035.

Diogo Chatzimarkakis, chief executive of Hydrogen Europe, noted that only two countries (Romania and Czechia) had transposed RED III into national legislation with quotas for both transportation and industrial use.

Consultations ahead of the transposition of RED III into domestic legislation are underway in the Netherlands and in Germany, among other EU states, as previously reported by Platts.