A key piece of EU regulation governing green hydrogen is unlikely to come into force until June 2023, two months later than originally envisaged, so the European Parliament can scrutinise it further.
The delay to the Delegated Act (DA) — which contains key definitions of what counts as “renewable hydrogen”, such as when and how it can be produced (see below for details) — is likely to frustrate hydrogen developers and investors, who had been waiting for many months for clear rules on how their European projects would be regulated and subsidised.
Published by the European Commission (EC) in February as an appendix to the Renewable Energy Directive II (RED II) overhaul, the DA was originally earmarked to come into force in April this year, two months after being passed to the European Parliament for scrutiny.
But Parliament has decided to exercise its right to take four months to scrutinise the regulations instead of two — without giving a reason why.
The EC stressed however that Parliament will not be able to change the final version, although MEPS (Members of the European Parliament) can lodge objections with the Commission.
If no objections are raised after the four-month scrutiny period, the DA will come into force on the 20th day of the month after it is ratified by Parliament — most likely to be 20 June 2023 under the present schedule.
The publication of the DA was fraught with difficulty, with many different environmental and hydrogen interest groups lobbying the EC over the “additionality” principle, which mandates the use of new renewable energy capacity only for green hydrogen production, and temporal correlation, which governs the use of grid electricity at times of low renewable energy generation.
A draft version of the DA leaked in December, mandating quarterly matching of grid power and renewable energy generation, leading to an even more furious outbreak of lobbying.
Environmental groups feared that allowing green H2 producers to use grid electricity would “cannibalise” renewable electricity supply and incentivise fossil fuel generation. But hydrogen interest groups such as Hydrogen Europe warned that stringent regulation would make green H2 prohibitively expensive.
When the DA did not materialise in December or January, key legislators in the European Parliament threatened to bring talks over the RED II overhaul to a halt.
The final version appears to have taken a compromise position on temporal correlation, allowing green hydrogen producers to use grid electricity at times of low renewable energy generation as long as they can supply the grid with equivalent amounts of electricity within a month.
This rule will apply until 2030, after which green H2 producers will likely need to match their own renewable generation to grid supply on an hourly basis.
And the EC has stood firm on additionality, mandating that green hydrogen producers can only sign power purchase agreements with projects that are less than three years older than the green H2 project.