A leaked European Commission draft suggests low-carbon electrolytic hydrogen could count towards a new EU-wide hydrogen target, as Brussels considers replacing binding national green hydrogen mandates with an indicative bloc-wide goal.
The leaked draft impact assessment for the post-2030 renewable energy framework proposes replacing national Renewable Fuels of Non-Biological Origin (RFNBO) targets with an indicative EU-wide hydrogen target covering energy and non-energy use in industry and refineries.
It would overhaul current RFNBO quotas under the Renewable Energy Directive (RED) III, which requires all member states to set consumption mandates across transport and industry.
The proposed EU-wide target is set at eight million tonnes per annum (mtpa) of hydrogen consumption, which the assessment describes as the average optimal level by 2040.
The 8 mtpa consumption goal would fall far below the scale envisaged under REPowerEU, which targeted 10 mtpa of domestic renewable hydrogen production and 10 mtpa of imports by 2030.
Under the Commission’s preferred “L2” policy option, that framework could include “certain flexibilities,” including considering low-carbon electrolytic hydrogen as compliant.
The document later says broadening the scope to low-carbon electrolytic hydrogen is expected to reduce compliance costs and energy system costs in some member states.
Brussels argues the approach would allow production to concentrate in regions with greater clean-electricity potential, where hydrogen can be produced more cheaply.
Alongside the target overhaul, Brussels is considering extending its transport fuel credit mechanism to renewable hydrogen supplied into industry and refineries, allowing producers to sell credits to fuel suppliers to help them meet RED obligations.
The document said the additional revenue could help narrow the cost gap with fossil hydrogen, with multipliers potentially used to steer supply towards refining and hydrogen derivatives for aviation and shipping.
While implementation of RED III has proved challenging across member states, hydrogen industry players have reacted with concern to the leak.
Posting on LinkedIn, Chief Strategy Officer of lobby group eFuel Alliance, Tobias Block said the development was “highly concerning.”
“This development is highly concerning. We finally have ambitious and binding RFNBO with REDIII in place, with a demand of more than 30 TWh in 2030. Germany, Belgium, and Spain have set targets between 8.5% and 11% until 2040,” he said.
“A shift towards indicative targets after 2030 would undermine this development and could put planned investments at risk.”
Others warned the proposed changes could damage investor visibility.
It also comes as the European Commission plans to propose changes to its RFNBO rules. Originally expected at the end of Q2 this year, no proposals have been tabled, further increasing uncertainty for industry players.
The move could also have implications that expand further than Europe. The Hydrogen Council’s recent report estimated that Europe could create demand for more than 50% of its projected 11 mtpa of global 2030 clean hydrogen demand.
