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EC set to decide hydrogen taxonomy emissions threshold by April 21: RHC

Highlights

Renewable Hydrogen Coalition calls to maintain draft proposal

Higher 3 mt CO2e/ mt H2 call would open low-carbon pathways

Hydrogen Europe sees CertifHy threshold as starting point

London — The European Commission (EC) is expected to adopt by April 21 so-called EU taxonomy rules on sustainable hydrogen production pathways with emissions thresholds of particular importance, a spokesman for the Renewable Hydrogen Coalition told S&P Global Platts.

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EU Taxonomy is a key tool to accelerate the energy transition and allow Europe to meet its climate neutrality goal by 2050 with the delegated act set to establish a classification of "sustainable investments."

"Weakening the EU taxonomy criteria comes down to undermining the Green deal itself," Francois Paquet, impact director at Renewable Hydrogen Coalition, said April 2 in an email.

Delegated acts are technical with little opportunity for EU members states to have a real say, which explains why such a technical file has become so strategic and political, Paquet said.

Renewable Hydrogen Coalition, which represents wind and solar generators and associations, called in a open letter to the EC to maintain the original threshold of 2.256 mt CO2e/mt of hydrogen to allow for only the most sustainable hydrogen to qualify as "green," including wind or solar based-hydrogen.

Concerns that solar would not meet the threshold are baseless, Paquet said adding that recent studies show solar-based hydrogen electrolysis ranging from 1.32 to 2.5 mt CO2e/mt of hydrogen.

The methodology refers to life-cycle greenhouse gas emissions and was initially set in a first draft in December 2020.

A threshold of 3 mt CO2e would potentially allow some hydrogen types produced via low-carbon electricity or hydrogen produced via steam methane reformation with carbon capture and storage (SMR with CCS) to qualify as "green/sustainable," it added.

Some countries like France or Slovakia envisage using grid-based surplus electricity for the production of low-carbon hydrogen.

Utilities including EDF, Fortum and CEZ in another open letter to the EC have called for a higher threshold.

"The upcoming delegated act... should not introduce disproportionate constraints to hydrogen production," the letter dated March 11 said.

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Hydrogen produced via electrolysis powered by French or Nordic grid-based electricity has a carbon footprint of less than 3 mt CO2e/mt of hydrogen, but the proposed criteria of the draft delegated act would not qualify such hydrogen as taxonomy aligned, the utilities said in the letter.

The draft proposal may even rule out some solar-based hydrogen production pathways, it added.

Sector association Hydrogen Europe said April 7 that clear definitions and clear thresholds were essential within that context.

"The threshold should be aligned with the taxonomy in order to have consistency throughout different pieces of legislation," it said in a paper.

Hydrogen Europe urged the EC to consider other types of low carbon hydrogen as highlighted in the EU Hydrogen Strategy and EU Council Conclusions.

"Given the urgent need to begin decarbonizing existing hydrogen production, the retrofitting of existing hydrogen production facilities (SMR with CCS) needs careful consideration. If these projects can become feasible and prove commercial viability, they can offer an immediate contribution to decarbonization and a subsequent increase in hydrogen volumes available," it said.

Renewable Hydrogen Coalition underlined that the EU Taxonomy aims to be guide investment in the most sustainable solutions, but "investors will still be able to invest in what's not part of the guide."

Hydrogen Europe also focused on the CertifHy threshold of 4.37 mt CO2/mt H2 as a starting point for a low carbon hydrogen emissions threshold.

The EU's RED II directive methodology also allows slightly higher hydrogen emissions thresholds for the transport sector, it said.

S&P Global Platts assessed the price of renewable hydrogen (Netherlands, PEM electrolysis including capex) at Eur4.32/kg on April 6.

For low-carbon natural gas-based hydrogen (Netherlands, SMR with CCS including capex and carbon), the comparable cost-based assessment was Eur1.87/kg.