New EU fuel directive has large implications for hydrogen

In December, negotiators from the European Parliament and EU nationwide governments reached a deal on a brand new EU fuel directive, establishing frequent EU guidelines for renewable and low-carbon gases together with hydrogen. The aim is to facilitate their penetration into the power system and their use of present pure fuel infrastructure.

The new directive, which should nonetheless be rubber-stamped by full votes of the EU Parliament and Council in Q1 2024, would require nations to create nationwide community improvement plans based mostly on joint situations for electrical energy, fuel and hydrogen, aligned with Nationwide Vitality and Local weather Plans and an EU-wide Ten Yr Community Growth Plan. Hydrogen and fuel community operators should embrace data on infrastructure that may be decommissioned or repurposed. To handle considerations that new fuel infrastructure is being constructed on the again of hydrogen hype that can by no means materialise, nations should draw up particular hydrogen community improvement plans based mostly on “lifelike” demand projections.

Spanish Vitality Minister Theresa Ribera, who led negotiations on behalf of the EU Council’s nationwide governments, stated in an announcement: “[The new rules] will increase the deployment of the rising hydrogen sector and the transition of the fuel sector in direction of renewable power, and it additionally units guidelines for shopper safety and strengthens safety of provide.”

Austrian Liberal MEP Claudia Gamon, who participated in negotiations on behalf of the parliament, stated MEPs wished to ensure hydrogen is channelled in direction of the fitting preliminary purposes as a result of “demand for hydrogen will likely be very excessive and for a very long time we will be unable to satisfy the demand with made-in-the-EU hydrogen. That is why we should always begin by prioritising hard-to-abate sectors to ensure provide for our business. Wherever there are options to [natural] fuel [such as hydrogen], we ought to be utilizing them.”

The European Fee put out its hydrogen and fuel proposals two years in the past as a part of the ‘Match for 55’ Bundle, which aimed to align EU local weather and power legal guidelines with the EU’s goal to cut back greenhouse fuel emissions by at the very least 55% by 2030 and obtain local weather neutrality by 2050. The proposals included each a brand new directive and a regulation. Though negotiations on the directive have concluded, the regulation nonetheless must be agreed. The regulation offers with extra technical issues, which have wanted extra enter from nationwide regulators, whereas the directive is much less proscriptive and is supposed to set a route for nationwide governments.

EU fuel directive: a heyday for hydrogen?

December’s settlement on the EU fuel directive was welcomed by hydrogen advocates who’ve been calling for such clear guidelines because the publication of the EU’s Hydrogen Technique in 2020. “We’re delighted with the choice, because the directive supplies the pliability that can permit a progressive transition into hydrogen actions, and the creation of a devoted physique focusing solely on hydrogen places it at an equal stage with electrical energy and fuel carriers, highlighting its elementary position within the power transition,” stated Daniel Fraile, chief coverage officer of business affiliation Hydrogen Europe, in an announcement.

Specifically, Fraile welcomed the differentiation between hydrogen transmission and distribution networks, which he stated will permit for an inexpensive and environment friendly unbundling regime to be utilized to new infrastructure. He additionally welcomed the introduction of the European Community of Community Operators for Hydrogen (ENNOH) as a brand new, impartial entity. It would exist alongside the European Community of Transmission System Operators for Gasoline (ENTSOG) for pure fuel transmission and the European Community of Transmission System Operators for Electrical energy for electrical energy transmission networks.

Local weather campaigners, who fear that the promise of hydrogen could also be used as an excuse to construct extra fuel infrastructure, additionally welcomed the brand new impartial physique. “The fossil fuel business won’t be handed management of a future European hydrogen community,” stated Greenpeace EU local weather and power campaigner Silvia Pastorelli in a press launch. The difficulty of who ought to plan and handle the brand new hydrogen grid was the final sticking level within the negotiations; MEPs insisted that ENTSOG shouldn’t be in cost.

“Hydrogen should be handled as a gasoline of final resort, actually just for the industries that we are able to’t decarbonise in any other case,” Pastorelli stated. “Letting the fuel business plan and run the grid would have been a transparent battle of curiosity, and have led to a like-for-like substitute of hydrogen for fuel.”

The Worldwide Oil and Gasoline Producers business affiliation had opposed the creation of ENNOH, saying actions ought to be coordinated by the prevailing ENTSOG. “Creating ENNOH as a 3rd silo, subsequent to ENTSOG and ENTSOE, will likely be detrimental to environment friendly cooperation and coordination,” it stated in an announcement again in September.

One key provision that can facilitate hydrogen improvement has been delayed. A delegated act defining “low carbon hydrogen” is just not due till a yr after the brand new directive enters power following its adoption; this was foreseen to be six months below the unique proposal. Legislators determined extra time was wanted to find out what might represent inexperienced hydrogen. Whereas inexperienced hydrogen has been partially outlined in different laws, defining it within the context of this directive has been extra controversial. Hydrogen Europe stated that is regrettable “as a result of the sector urgently wants readability with a purpose to obtain the Match for 55 targets”.

New starting for biogas?

Together with hydrogen, the brand new EU fuel directive additionally has important implications for biogas. Nevertheless, not like hydrogen stakeholders, the biogas sector is disenchanted with the ultimate textual content.

“This can be a missed probability for a transparent driver for biomethane development as sought initially by the European Parliament,” stated Giulia Laura Cancian, secretary-general of the European Biogass Affiliation, in an announcement. The ultimate textual content doesn’t set an EU biomethane use goal, which “would have been a big political sign for the biomethane business, but additionally for gasoline suppliers and industries searching for options to fossil fuels”, she stated.

Nationwide governments within the EU Council had been cautious of setting new bioeconomy targets after the bruising expertise of biofuels within the 2010s, when an preliminary EU goal was later rescinded after it was discovered to be driving oblique land use change. Nationwide governments additionally rejected the parliament’s try to provide precedence entry to biomethane for injection into fuel networks. “Such a measure would contribute to environment friendly power planning at native and regional stage,” stated Cancian, including that she hopes this could but be explored within the regulation that’s nonetheless to be finalised.

The ultimate directive textual content does exempt biomethane injection from community tariffs. Cancian stated nationwide regulators ought to go additional by exploring cost-sharing mechanisms for constructing grid connections, which entail main monetary value for mission builders. These prices could possibly be shared between producers, customers and governments, she suggests.

The brand new legislative framework may even facilitate entry to the prevailing fuel grid for renewable and low-carbon gases, and permit member states to supply reductions to cross-border and injection tariffs for these gases. A certification system for low-carbon gases, together with hydrogen, will likely be established based mostly on the certification of renewable gases and hydrogen foreseen within the EU’s revised renewable power directive, agreed in October.

Extra shopper energy

The brand new EU fuel directive additionally accommodates new measures to provide shoppers extra energy over their fuel (and hydrogen) suppliers, mirroring provisions already in place within the EU electrical energy market. The provisions goal to let shoppers change suppliers extra simply; use efficient worth comparability instruments; get correct, honest and clear billing data; and have higher entry to knowledge and new good applied sciences. “Shoppers ought to be capable of simply select renewable and low carbon gases over fossil fuels,” the laws states.

Monique Goyens, secretary-general of the European Shopper Organisation, welcomed the brand new protections. “It would give shoppers a clearer thought about what they’re paying for and make it simpler to change suppliers in the event that they’re not comfortable,” she stated in an announcement. “Almost a 3rd of power used immediately by European households nonetheless comes from fuel,” she added. Switching to greener options has been made troublesome for shoppers by their power suppliers. “Till now… they haven’t had the identical protections from their fuel as from their electrical energy provider. It was excessive time to repair this.”

A provision within the Fee’s authentic proposal which outlined ‘citizen power communities’ was deleted from the ultimate textual content by the lawmakers. This was welcomed by the European Group Energy Coalition – a community facilitated by Associates of the Earth Europe in Brussels – which had warned it might imply communities had been “hijacked by incumbent fuel firms, and that biomethane and hydrogen can be focused in direction of residents though it’s largely acknowledged that biomethane and hydrogen usually are not cost-effective or sustainable methods to warmth households within the power transition”.

The Coalition additionally warned that together with a definition of power communities within the EU Gasoline Directive would create confusion with present definitions within the Renewables and Electrical energy Market Directives.

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