EC publishes draft delegated act on low-carbon hydrogen methodology

The European Commission has published a draft delegated act setting out the detailed methodology for calculating emissions savings from low-carbon hydrogen, and opened a four-week consultation.

The delegated act is part of the revised EU hydrogen and gas market legislation that entered into force over the summer, defining low-carbon hydrogen fuels as generating CO2 emissions savings of at least 70% compared with fossil fuels.

The EC said the draft text, published Sept. 27, complements the renewable hydrogen rules already established, and adopts a life-cycle assessment for total greenhouse gas emissions savings.

“The greenhouse gas emissions accounting methodology for low-carbon fuels should take into account the full life-cycle emissions and indirect emissions resulting from the diversion of rigid inputs for producing low-carbon fuels as well as methane upstream emissions and actual carbon capture rates,” the EC said in the draft delegated act.

The Hydrogen and Gas Market Directive sets out a certification framework for low-carbon fuels, complementing the Renewable Energy Directive rules for renewable fuels, the EC said.

The EC also noted it could include rules on hydrogen emissions in the future.

“The global warming potential of hydrogen has not yet been determined with the level of precision required to be included in the methodology for calculating greenhouse gas emissions,” it said. However, “relevant values for the global warming potential of hydrogen should be added as soon as scientific evidence has sufficiently matured and is applied to measuring the impact of hydrogen leakage over the whole supply chain.”

Once finalized, the delegated act will be passed to the European Parliament and Council of Ministers for consideration for a two-month period. If they do not raise objections, the act will then be published in the official journal and enter into force.

"We are very happy that at last the consultation is out, so that we can now formally engage with the Commission to best design these rules which are vital for the market uptake of low-carbon fuels," Industry body Hydrogen Europe told S&P Global Commodity Insights by email Sept. 30.

Hydrogen Europe said the EC should maintain the same GHG reference of 94 gCO2/MJ for calculating the 70% emissions savings threshold in transport and industry to ensure consistency with rules for Renewable Fuels of Non-Biological Origin (RFNBO).

It should also allow for the same power sourcing strategies for both RFNBOs and low-carbon hydrogen producers, and have the same rules for allocating GHG emissions to hydrogen and other co-products.

The EC proposesto recognize capture and storage of CO2 emissions as a reduction of emissions where these are permanently stored, including outside the EU.

Hydrogen Europe called for equal recognition of all CO2 removal technologies to bring the approach in line with the carbon removals certification framework.

Blue hydrogen hesitancy

Blue hydrogen, while cheaper to produce than green hydrogen via renewables-powered electrolysis, has not received as much policy support in the EU, with its primary focus on renewable hydrogen to decarbonize hard-to-abate sectors.

Platts, part of Commodity Insights, assessed the cost of producing hydrogen via alkaline electrolysis in Europe at Eur6.06/kg ($6.78/kg) Sept. 27 (Netherlands, including capex), based on month-ahead power prices. Blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur2.78/kg.

Earlier in September, Shell and Equinor both scrapped blue hydrogen projects in Norway that were targeting exports to the EU via a proposed pipeline.