Hydrogen is cornerstone of EU’s Renewable Energy Directive

Hydrogen is cornerstone of EU’s Renewable Energy Directive

The European Parliament, Council and Commission reached a final agreement on the review of the renewable energy directive (RED3) after two years of intense negotiations, following the reviewed directive presented by the Commissions in July 2021 as part of the FIT for 55 package.

Renewable hydrogen will have a central role in meeting the EU binding target of 42.5% renewable energy by 2030. Industry must procure at least 42% of its hydrogen from renewable fuels of non-biological origin (RFNBOS) by 2030, though countries that can achieve a fossil-free hydrogen mix of at least 77% by 2030 can see that target reduced by 20%. This provision provides flexibility to countries aiming to develop a strong nuclear hydrogen policy and serves as an incentive to move from fossil-based to clean electrolytic-based hydrogen production.

In transport, fuel suppliers must achieve either a 14.5% reduction in greenhouse gas (GHG) emissions associated with their fuels or achieve at least a 29% renewables share in the fuel supply. In addition, at least 5.5% of the fuel mix must be composed of advanced biofuels and RFNBOs (combined binding target). Fuel suppliers will be free to choose their preferred fuel, but they must guarantee at least 1% is sourced from RFNBOs – which will lead to approximately one million tons of RFNBO demand.

“We finally have clear investment signals through binding targets for renewable hydrogen in both industry and transport,” celebrates Jorgo Chatzimarkakis, CEO of Hydrogen Europe.

“Hydrogen Europe welcomes the adoption of this key piece of legislation, which forms the foundation for a solid clean hydrogen economy in Europe. This directive solves one of the largest pieces of the hydrogen puzzle, setting a predictable market volume for renewable hydrogen,” he added.

“The flexibility on the ambitious industry target is much appreciated because the very restrictive rules on RFNBOs (adopted in February) will make it challenging for industry to meet their obligations, especially those located in countries with limited access to renewable energy. On the transport sector, we welcome the binding character of the RFNBO obligation although we would have preferred a higher target, while the introduction of a review clause of the RFNBO Delegated Act will be pivotal once the hydrogen market gets going.” explained Daniel Fraile, Chief Policy Officer at Hydrogen Europe.

For more information:

• Council press release: Council and Parliament reach provisional deal on renewable energy directive