Questions and answers on the Delegated Act defining low-carbon hydrogen and fuels

Why is the Commission proposing a Delegated Act for low-carbon hydrogen and fuels?

As the EU move towards climate neutrality by 2050 with a clear view to foster a competitive and sustainable economy, hydrogen is a strategic sector. Hydrogen has a central role to play in decarbonising our energy system, in particular in hard to abate sectors where electrification is not yet a viable option. Investors need regulatory clarity and certainty to scale up production and thereby lower costs.

Low-carbon fuels have an important role to play in the clean energy transition, especially in industrial process and heavy transport. The Hydrogen and Gas Market Directive already provides the definition for low-carbon hydrogen and fuels. Article 9(5) of the directive requires the Commission to adopt a methodology that will make the definition operational. This methodology must be aligned with the approach established for renewable fuels of non-biological origin (RFNBOs) and recycled carbon fuels (RCF). The Delegated Act completes the EU regulatory framework for hydrogen. 

How can hydrogen be qualified as "low-carbon"?

Low-carbon fuels include recycled carbon fuels, produced from non-recyclable fossil-based waste and unavoidable off-gases from industrial installations, low-carbon hydrogen, and synthetic gaseous and liquid fuels derived from low-carbon hydrogen, that achieve greenhouse gas emissions savings of 70%.

Low-carbon hydrogen comprises hydrogen produced from non-renewable energy sources that achieve greenhouse gas emissions savings of 70% compared to unabated fossil fuels. One approach of producing low-carbon hydrogen includes reforming natural gas if applying carbon capture, utilisation, and storage (CCUS) to prevent the CO2 stemming from the process from being released into the atmosphere. This is achieved by either chemically binding the captured CO2 in long-lasting products or by permanently storing it in deep underground geological formations.

The other main alternative is to produce low-carbon hydrogen from low-carbon electricity via electrolysis.

The methodology in the Delegated Act applies a lifecycle approach that takes into account all emissions related to its production and use, including emissions from the extraction of raw materials, manufacturing, transport and use of the fuel. The methodology also takes into account methane emissions and actual carbon capture rates. Crucially, it takes into account the variety of energy mixes across the Union, allowing different pathways for the production of low-carbon hydrogen. The delegated act does not establish the share of renewable energy that can be accounted for hydrogen produced from electricity. This aspect is set out in the Renewable Energy Directive taking an annual average approach. The Commission is ready to address this approach when reviewing the Renewable Energy Directive. At the same time, the Commission is stepping up its efforts to facilitate a pragmatic implementation of the Methane Regulation, with a focus on practical solutions that are simple and achieve the objectives of tackling methane emissions. 

Will these rules apply to imports as well?

The rules on low-carbon fuels in the Delegated Act will apply to both domestic and non-EU producers that want to export hydrogen to the EU. For certification, producers can rely on the well-established system of certification by third parties, known as Voluntary Schemes. These are international companies with more than a decade of experience in certifying renewable fuels worldwide.

When will these rules start to apply? 

Following today's adoption, the Delegated Act will be submitted to the European Parliament and the Council. They will have a two-month period, extendable by another two months if requested by the co-legislators, to either approve or object to the Delegated Act.  If the Act passes the scrutiny of the European Parliament and the Council, it will enter into force and apply 20 days after its publication in the Official Journal of the European Union.

How will the Commission monitor progress of the hydrogen market? 

The Commission will continue to closely monitor the ramp-up of the hydrogen industry across the EU. Earlier this year, the Commission launched a study on the effectiveness of EU's framework on hydrogen to identify the possible barriers to the ramp-up of the renewable hydrogen market and assess the need for an adjustment of the Delegated Act on renewable fuels of non-biological origin.

Both the Commission's monitoring and the study will ensure a continuous, thorough, analysis of market conditions and the impacts of the legal framework.

For More Information

Press release - Clarity to hydrogen sector with new EU methodology for low-carbon hydrogen and fuels