On June 13th PIA hosted a “Fireside Chat with Didier Holleaux” focused on “the real history of gas and lessons for the energy transition”. Watch the full recording here.

The discussion sparked a question from Ines Bouzidi, Project Director at PlugPower, delving into the complexities surrounding the evolution of EU regulations on green hydrogen.

📌 Key Discussion Points: Ines highlighted the multifaceted challenges facing green hydrogen projects, particularly with the upcoming 2030 regulations on hourly temporality for green hydrogen certification.

In response, Didier Holleaux argued that the European Commission should consider extending the application date. This extension would provide the green hydrogen value chain the necessary time to develop and mature, fostering investment and innovation without imposing undue risks on early-stage projects.

🔍 Background: On June 20, 2023, the European Commission published two delegated acts detailing the EU definition of renewable hydrogen. To be classified as a Renewable Fuel of Non-Biological Origin (RFNBO), renewable hydrogen must adhere to the principles of additionality and temporal correlation. According to Article 6 of Directive (EU) 2018/2001, starting January 1, 2030, hydrogen must be produced in the same one-hour period as the renewable electricity sourced.

The mismatch between variable renewable energy (VRE) sources and the need for a consistent hydrogen supply poses a significant challenge. During periods when VRE is not available, hydrogen production might have to rely on the national grid, which may be using conventional power generation with high CO2 content. While these regulations are essential for ensuring the authenticity of green hydrogen, they also introduce several difficulties, including the need for additional power and hydrogen storage solutions. Such complexities drive up costs and perceived investment risks, potentially making projects financially unviable.

Cost Implications: Implementing these technologies increases the overall costs of green hydrogen projects. The need for advanced storage systems and adaptable electrolyzers requires substantial investment, driving up project expenses.

Investment Risks: The heightened complexity and cost of meeting the 2030 requirements elevate the perceived risks for investors. The uncertainty surrounding technological readiness and market acceptance can lead to a reluctance to finance these projects. Even investors committed to the energy transition might find the risks too high, potentially stalling progress in the green hydrogen sector.

Didier Holleaux emphasized that to foster the growth of green hydrogen projects, the European Commission should consider a more flexible timeline for these regulations. By doing so, they can avoid hindering the sector’s development and ensure that green hydrogen becomes a viable component of the EU’s strategy for net-zero carbon emissions by 2050.

🛠️ Looking Ahead: Balancing regulatory ambitions with technological readiness and investment feasibility is crucial. Industry leaders advocate for extended timelines and supportive policies to encourage the development and adoption of green hydrogen technologies.