European Parliament vote marks historic day for Europe’s hydrogen sector

The European Parliament has voted through a key amendment to the Renewable Energy Directive II (RED II), which removes “additionality” requirements and sets binding targets for the use of renewable hydrogen in transport and industry.

Under the new RED II, targets for renewable fuels of non-biological origin (RFNBOs) such as green hydrogen and green ammonia are now set at 5.7% of all fuels by 2030, including 1.2% in maritime fuels. Furthermore, 50% of industrial fuel use will have to transition to RFNBOs by 2030, rising to 75% by 2035. This will require annual production of nine to ten million tonnes of green hydrogen, according to trade body Hydrogen Europe.

The European Parliament voted through Amendment 13, effectively scrapping EU-wide additionality regulations — requiring all renewable hydrogen producers to source electricity from dedicated green-energy projects, with grid-sourced electricity allowed only when it could be offset with dedicated supply within the hour.

Instead, renewable hydrogen producers will now be allowed to source electricity from the grid, provided they can verify it as green electricity by securing power-purchase agreements (PPA) from renewables installations for the equivalent amount.

Hydrogen Europe had lobbied hard in favour of the amendment, arguing that the additionality rules would hold back the development of green hydrogen, with Europe risking a “mass exodus” to the US, especially in the wake of new US hydrogen tax credits that offer up to $3/kg of subsidies for green hydrogen.

“[The passing of Amendment 13] will ease the implementation of the additionality principle for renewable hydrogen. MEPs have listened to the sector’s concerns that overly strict regulations would hinder the development of this crucial market,” said Hydrogen Europe in a statement.

“Hydrogen Europe fully recognises the importance, and supports, the principle of additionality but has expressed concerns regarding the practical implementation of the proposed criteria, not the principle itself. The task at hand is to find a balance between ensuring green hydrogen is produced from new renewable energy capacity and avoiding excessive constraints on a nascent market.”

Hydrogen Europe chief executive Jorgo Chatzimarkakis added, “This is yet another historical day for the hydrogen sector in Europe and globally.

“These binding targets on renewable hydrogen, and the creation of a simpler framework, are strong signals from the EU institutions to ensure the scale up of a hydrogen economy and reduce our dependency on fossil fuels. We need to bring production and demand into a right balance, and the new European Hydrogen Bank is the right instrument under which to do so.”