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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 10th 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.
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.
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 !
Reference : In the revised Directive on Renewable Energy (RED) proposal in 2021, 6th 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
