International producers of green hydrogen will not want to export their projects to European markets because of the EU’s strict regulations on what constitutes renewable H2, the head of the continent’s biggest hydrogen trade association has warned.
Speaking at the Reuters Hydrogen 2023 conference in Amsterdam on Wednesday, Jorgo Chatzimarkakis, chief executive of Hydrogen Europe, excoriated the European Commission’s (EC’s) proposed Delegated Act (DA) defining green hydrogen, finally published last month, which mandated monthly matching of electrolyser operation with power supply from additional renewable energy capacity.
The rules will push up the cost of producing hydrogen, he said, making Europe a less attractive market for green H2 producers around the world, he said.
At the same conference, David Edmondson, the CEO of the Neom Green Hydrogen Company, which is building a 2.2GW renewable H2 project in Saudi Arabia, said it may be easier to sell some of its output to other parts of the world if the EU rules become too onerous.
Chatzimarkakis singled out Brazil and Egypt as countries where developers are actively questioning the European approach, based on conversations he has had with industry contacts there.
“We heard this from Brazil, after they saw the Delegated Act,” he told the Amsterdam audience. “They said, ‘we are new kids on the block in Brazil, and Europe is not a destination for us. Why should we go there?’”
“When I was in Egypt, I saw anger during the Sharm el-Sheikh [COP 27] conference,” he added. “Anger of Egyptian project bosses, who say ‘we built this all up and where is the offtake now? The US is much more attractive’.”
The US Inflation Reduction Act (IRA) has acted as a “wake up call” for European legislators, which gives him some optimism, he said.
The EU wants to import ten million tonnes of green hydrogen by 2030, which would all have to meet the same rules as renewable H2 produced in Europe.
But Chatzimarkakis also attacked the complexity of the rules, which he claimed even EU officials did not fully understand, as well as the uncertainty caused by the scheduled review in 2028, in which the European Commission would decide whether or not to proceed with tightening the rules even further in 2030 to mandate hourly matching, rather than monthly.
He also complained about the lack of “grandfathering” in which first mover projects would be protected from subsequent rule changes.
“It’s worse for the guys producing hydrogen in Europe,” he noted, comparing the DA to a “straightjacket” and lamenting that electric cars, which can use grid electricity produced from fossil fuels, are classed as green.
“It’s unfair to just single out one sector which is a very, very important sector for the industrial development of Europe to just single it out and punch it,” he said. “But the narrative has been built into a bubble in Brussels where lots of NGOs are running around and telling everyone if we do it, the fossil industry will win.
“This is a bad, restrictive definition. Please don’t adopt [it] in the rest of the world.”
He added that introducing similar rules in the US would drive up the cost of green hydrogen there by 170%.
The EU Delegated Act has been cleared by the European Parliament, although it still needs to be formally adopted, and it will also need to be approved the European Council of member state ministers.