Was it coincidence that on July 14, 2021 the European Commission dropped an unprecendented package of, mostly mandatory, emission reduction targets, fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels? It seemed that libérté, égalité and fraternité was hotly debated by the involved EU Commissioners right up to the press conference, as the cost of more stringent emissions targets for vehicles and avaition fuels will fall mostly on consumers…..until in 2035 all new cars will be zero emission and are predicted to cost us less that driving a diesel fuelled car today… and we Hydrogen stations will be dotted every 150 km along European corridors in the coming decade.

For  (green) hydrogen the most important measures that were announced include:

  • Industry: A targeted 50% share for renewable fuels of non-biological origin (RFNBO), including hydrogen in energy and feedstocks by 2030, excluding production of oil products.
  • Transportation: Amendment of the regulation setting CO2 emission standards for cars and vans, known as the Renewable Energy Directive (RED). The revised RED stipulates a 2.6% target share of RFNBOs in transportation by 2030, with a preference for use in the aviation and maritime sectors. Hydrogen stations will need to be built across Europe at least every 150 km on highways for compressed hydrogen and every 450 km for liquid hydrogen by 2030.
  • Aviation: EU Emissions Trading System (ETS) is set to include a 2% target share of sustainable aviation fuel (SAF, made with hydrogen) by 2025  shipping (and, eventually, the building sector). .
  • ETS Innovation Fund: will support projects to produce and use hydrogen, however mostly in industrial settings. Through the so called Carbon Contracts for Difference (CCfDs) that would pay projects in steel-making and cement industries, and for certain basic chemicals, like ammonia, olefins, and methanol using climate neutral or ultra-low carbon technologies a premium to cover the cost gap between the CO2 price in the ETS (currently around €60) and the breakeven production cost. Not even an ETS price in the range of €100-€200 would always fully close the gap for green hydrogen without additional support.

Unfortunately the Energy Taxation Directive taxes renewables and low-carbon hydrogen at the same level through 2033 and will be not enough to close the  gap between the costs of blue and green hydrogen.

Photo: Courtesy Airbus