RFNBO and their importance in European decarbonation strategy

October 4, 2024

Lhyfe Renewable Fuels of Non-Biological Origin

The European Union is currently defining the regulatory framework to create a new clean Hydrogen economy in Europe. Since 2020, the European Commission proposed many ambitious measures to support Renewable Hydrogen. Indeed, true renewable hydrogen (produced through electrolysis only with renewable electricity) is identified as one of the key lever to achieve European goals in terms of CO2 reduction. And the challenge is big : the EU even increased the target of renewables in our energy mix from 32% to 43%, because we need to act for climate.

On the 10^th of February 2023, the European Commission proposed new rules to define how to produce renewable hydrogen and its derivatives (as Renewable Fuels of Non-Biological Origin (soon well known RFNBO). As the text received positive feedback from the European Parliament and Council, it should be very soon adopted in its final version.

Let’s explain them as simply as possible, thanks to Alice Ruczinski, working as European Funding Manager for Lhyfe.

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How to define RFNBO?

Renewable Fuels of Non-Biological Origin (RFNBO) refers to the renewable fuels that are produced using non-biological sources. The term may designate renewable hydrogen itself but also its derivatives, i.e. advanced fuels based on renewable hydrogen. To be called this way, RFNBOs producers have to respect some rules to be sure that the final product that will be used in the transport sector or in the industry really has the lowest CO2 footprint possible.

To put it in a nutshell, RFNBO is green renewable hydrogen but also what is produced with green hydrogen such as SAF (sustainable Aviation Fuel), green ammonia, green methanol.

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What are the main rules proposed by the EU to produce RFNBO?

As you might know (and if not, please refer to this article) to produce RFNBO (aka renewable hydrogen and its derivatives if you follow me) it requires a lot, but really a lot, of renewable electricity.

This new European rule determines clearly which electricity to use and how to use it: There will be two types of possible connection between an electricity plant and a hydrogen plant :

Direct connection : the hydrogen production asset will be directly connected to the electricity production asset. For example this is how the hydrogen is produced in Lhyfe’s pilot plant of Bouin

Grid connection : the hydrogen production asset is connected to the grid and use electricity purchased through PPAs (Power purchase Agreement) with renewable electricity producers and that is :

renewable
additional. That is to say using renewable electricity production plant that were built less than 36 months before the start of the RFNBO production plant *
generated at the same time than the production of hydrogen. To be precise, it will have to be electricity produced the same month before 2030 and even the same hour after 2030.
generated in the same country than the production site of hydrogen **

In the meantime, what happens with other types of hydrogen?

Grey hydrogen, which still represents today the majority of the hydrogen available will have to go low-carbon and find certificates to do so. Different types of certificates will exist per country and depending on the scope of the methodology used to calculate CO2 emission.

For RFNBOs, the major part of the lifecycle of the final product will be taken into account. It will be possible to trade those certificates, in a similar way as the carbon quotas today.

Remember that for now, it is just a proposal and final adoption will come soon, we will keep you posted !

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Reference : In the revised Directive on Renewable Energy (RED) proposal in 2021, 6^th IPCC Report on the state of knowledge of climate change, its widespread impacts and risks, and climate change mitigation and adaptation

* this rules doesn’t apply in countries where the electricity from the grid has a carbon content lower than 18g CO2e/ MJ)

**except for Sweden which is divided in 4 zones

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Other articles:

What is RFNBO and its significance in green energy?

June 10, 2024

The drive for sustainable energy solutions has brought forward innovative ideas to combat climate change. One standout is Renewable Fuels of Non-Biological Origin (RFNBO). But what exactly is RFNBO, and why is it so significant?

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Understanding RFNBO

RFNBO refers to fuels produced using renewable electricity rather than biomass, such as creating green hydrogen through water electrolysis. This sets RFNBO apart from traditional biofuels, which rely on biological materials. By leveraging renewable sources like wind, solar, and hydro, RFNBO significantly reduces the carbon footprint of energy production.

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Why is RFNBO important for energy transition?

RFNBO offers two major benefits:

· Integrating renewable energy: It helps incorporate renewable energy into sectors traditionally dominated by fossil fuels.

· Decarbonising challenging industries: It aids in reducing emissions in heavy industries and sectors like aviation and maritime transport, which are tough to transition to green alternatives.

By using renewable electricity for fuel production, RFNBO can drastically cut greenhouse gas emissions across various industries.

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Expanding the role of RFNBO

1. Driving Economic Growth

As countries invest in renewable energy infrastructure and RFNBO production facilities, there will be a surge in job creation, from R&D to manufacturing and operations.

2. Fostering technological innovation

The push for RFNBO is driving innovations in renewable energy production and storage, making processes like electrolysis more efficient and cost-effective.

3. The environmental and social impact

RFNBO improves air quality and public health. Additionally, the shift to a green energy economy provides opportunities for social inclusion and economic development.

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What role do regulations play in RFNBO's success?

Supportive policies, such as carbon pricing and renewable energy targets, are crucial for accelerating RFNBO adoption. The regulatory landscape will significantly impact the success of RFNBO. For more insights on RFNBO's role in Europe's decarbonization strategy, check out our interview with Alice Ruczinski, European Funding Manager for Lhyfe.

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Read article

TIRUERT scheme in France's renewable energy strategy

July 3, 2024

The TIRUERT, or “Taxe Incitative Relative à l'Utilisation d'Énergie Renouvelable dans les Transports” (Incentive tax on the use of renewable energy in transport) aims to promote the use of renewable energy in transport by enabling developers of electric vehicle charging stations and renewable hydrogen refuelling stations to issue renewable energy certificates. These certificates can then be sold to oil operators, enabling them to meet their renewable energy obligations and avoid paying additional tax.

This is not a new mechanism, as it has existed for some twenty years (under the name TIRIB, then TGAP).

The French Finance Act of 2022 made developers of electric vehicle charging stations and hydrogen mobility players eligible for the scheme.

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Key mechanism of the TIRUERT

How does the TIRUERT work?

Today, all fuel distributors in mainland France are subject to the TIRUERT. If they achieve a biofuel incorporation rate of 9.9% for petrol and 9.2% for diesel, then the incentive tax becomes zero.

The legislation allows these distributors to purchase electricity or hydrogen certificates used in the transport sector. This economic alternative enables them to avoid paying the incentive tax. It can also replace the obligation to physically incorporate biofuels into fuels, depending on market conditions.

Renewable energy certificates are issued by developers of charging stations or hydrogen refuelling stations open to the public, thus improving the economic competitiveness of their projects: they receive income from the sale of these certificates. This income is proportional to the electricity or hydrogen consumed at the charging points or hydrogen refuelling stations.

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Eligibility and conditions

For a network of electric charging stations (IRVE) to be eligible for the TIRUERT scheme, it must meet several conditions:

1. Regulatory compliance: The IRVE must comply with the general provisions on quality of service and interoperability, as well as the requirements for submitting data on the transport.data.gouv platform.

2. Registration : Charge points must be registered on the Carbure platform managed by the Direction Générale de l'Energie et du Climat (DGEC).

3. Audit and control: The administration may require an audit by a COFRAC-accredited body to verify the existence and compliance of chargepoints.

AZOR ENERGY offers support at every stage of the project, from registration on the Carbure platform to the sale of certificates to oil operators.

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For a hydrogen fuelling infrastructure network to be eligible for the TIRUERT scheme, it must also meet a number of conditions:

1. Regulatory compliance: Hydrogen refuelling stations must comply with current safety and quality standards. Hydrogen must be produced by electrolysis and used in mobility.

2. Registration: Stations must be registered with the Direction Générale de l'Énergie et du Climat (DGEC) in the Carbure platform.

3. Certification of consumption: Hydrogen consumption must be certified by approved meters and read regularly.

AZOR ENERGY offers support at every stage of the project.

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Impact and benefits

The TIRUERT system is an incentive system that provides additional income to support the deployment of public electric charging and hydrogen distribution networks in France. By facilitating a win-win scenario between fuel distributors and recharging infrastructure operators, it encourages investment in renewable energy projects and supports the national decarbonisation strategy.

Certification and reporting

IRVE operators must declare the amount of renewable electricity consumed each quarter per charge point. The amount of energy supplied is based on certified meter readings, and the renewable share of electricity used is calculated on the average of the French energy mix over the last two years. In 2023, this rate was 26.02%, and it is not yet known for 2024.

For hydrogen filling station operators, the implementing decrees are in the process of being published.

Future prospects

TIRUERT's market potential is significant, with an estimated 80 to 120 GWh of renewable electricity expected to be marketed in 2024 (representing volumes from 2022 to 2024). This market is helping local authorities and investors to reduce their selling prices in a context of rising energy costs, thus contributing to the wider adoption of renewable energy solutions in the transport sector.

For hydrogen, although the volumes involved are not yet known, the Tiruert principle is expected by station operators already committed to renewable hydrogen, to accelerate the adoption of this new fuel by rewarding the customer in the pump price.

Conclusion

The TIRUERT scheme is an essential tool in France's renewable energy strategy, promoting the growth of a greener transport sector. As the market evolves, the role of the TIRUERT tends to expand, supporting the wider adoption of renewable electricity and renewable hydrogen in transport.

(For more detailed information and assistance on how to participate in the TIRUERT mechanism, you can contact AZOR ENERGY).

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