France Hydrogene's contribution on the Delegated Act defining a method for assessing GHG emission savings for renewable hydrogen - June 2022

The Renewable Energy Directive (RED II) establishes rules to define renewable hydrogen as 'renewable liquid and gaseous fuels of non-biological origin' (RFNBO), with a greenhouse gas emission savings requirement of -70% compared to a fossil fuel comparator. The Delegated Act from Article 28 (5) of RED II and its Annex establish a methodology to assess GHG emission savings from RFNBOs (renewable hydrogen and its derivatives, such as renewable ammonia, methanol, e-fuels, e-methane) and have a structural impact for the EU hydrogen industry: If the methodology is currently limited to RFNBOs for the transport sector only, it is supposed to be extended to all uses of RFNBOs in the future with the ongoing revision of RED II introduced with the Fit-for-55 Package (RED III). This methodology will also apply to the EU Taxonomy on Sustainable Activities for the 'manufacture of hydrogen', with a threshold of 3.0 kgCO₂eq/kgH₂. The future methodology to assess GHG emission savings for low-carbon hydrogen and low-carbon fuels, to be defined in a Delegated Act expected by 2024 (Article 8 from Directive on gas and hydrogen), would be very likely based on same principles and approaches. France Hydrogene welcomes the initiative which has been long awaited to complete the legal definition of renewable hydrogen, provide a clear and certain framework to investors and industrials, and open the way to the certification of RFNBOs within the EU market. However, several technical details included in the Annex raise serious concerns and France Hydrogene would like to draw the attention on some provisions which could be improved to provide clearer guidance for the development of the hydrogen industry. Key Recommendations: 1. Clarify the status of emissions from transport and storage of hydrogen. It should be explicitly referred whether they are included or excluded from the scope of the carbon methodology for hydrogen as distribution is explicitly excluded, and to clarify the downstream gate to be considered. 2. Attribute correct and consistent average GHG emissions intensity to Member States' electricity mixes in table A part C of the Annex. Alternative sources of data from European or national reliable references such as TSO/DSO should be of use instead, so that the French electricity mix could be properly assessed. 3. Introduce an alternative approach to assess GHG emissions content of grid electricity, based on the hourly average carbon content. This will provide consistency with the hourly time correlation expected for PPA-contracted renewable electricity supplying electrolysers by 2027. 4. Use the average value from the three previous calendar years to assess the number of full load hours an electrolyser can operate with low-carbon electricity, based on the number of hours in which the marginal price of electricity is set by renewable or nuclear installations. 5. Streamline the carbon intensity of renewable electricity and nuclear electricity. Assumptions made in the Delegated Act favor renewable electricity by neutralizing its upstream emissions, and disfavor nuclear electricity by including upstream emissions. Both renewable and low-carbon electricity generation technologies should be treated with a level-playing field. 6. Introduce a grandfathering clause for e-fuels production projects using industrial CO₂. Installations producing methanol, e-fuels or e-methane, by combining renewable hydrogen with CO₂ captured from industrial plants, should not be obstructed after 2036, otherwise current e-fuels projects with a 15 to 20 years lifetime would be cancelled