The production of the hydrogen/fuel must meet spatial correlation requirements, i.e., the renewable electricity installations under the PPA must either be (i) located in the same bidding zone (or in an adjacent offshore bidding zone) as the hydrogen/fuel production facility, or (ii) in a neighbouring bidding zone where electricity prices are equal or higher than in the production facility bidding zone.
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Those rules will never be applicable to hydrogen/fuel production facilities that come into operation before 2027.
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To fall under this setup, the renewable electricity installation must (mainly) have been commissioned at most 36 months before the hydrogen/fuel production facility. The “direct line” setup, where the hydrogen/fuel production facility is connected directly to a new renewable electricity installation and does not use grid electricity.Under the current proposal, the hydrogen/fuel produced can be counted as fully renewable in the following two situations: The Additionality Delegated Act extends the scope of when hydrogen can qualify as renewable when produced using electricity. However, in many other Member States with a lower share of renewable electricity on the grid, this is unlikely to be the case. In EU Member States with a very high share of renewable electricity on the grid (such as Austria or Sweden), this default rule may be sufficient to ensure the viability of the business model of producers of renewable hydrogen or RFNBOs simply using electricity taken from the grid. Under the existing legislation (i.e., the REDII), where a production facility produces hydrogen/fuel from electricity, the share of RFNBOs produced is equal to the average share of renewable electricity on the electricity network of the country in which the hydrogen/fuel production facility is located. This act is hugely important because it specifies the conditions under which hydrogen or fuel produced from electricity - within or outside the EU - can qualify as renewable.
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The first act is in relation to the so-called additionality requirements applicable to the electricity-based production of RFNBOs (“Additionality Delegated Act”). Two draft Delegated Acts that will have a significant impact on the hydrogen market have been published for public consultation under the Renewable Energy Directive recast (REDII, Directive (EU) 2018/2001). When can electricity-based hydrogen be deemed ‘Renewable’ and ‘Sustainable’ and why do the labels matter?įollowing the launch of the RePowerEU package, the European Commission continues to develop the regulatory framework applicable to renewable fuels of non-biological origin (RFNBO, mainly renewable hydrogen).