What is RFNBO and its significance in green energy?

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 : 

1. renewable 
2. 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 *
3. 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.
4. 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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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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When we talk about hydrogen, public actors have a central role to play in driving and supporting the process. We are talking about it today with Amaury Vaussanvin, co-founder of Synops Conseil, which helps communities begin their energy transition.

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Lhyfe Heroes: “You provide local authorities with advice on decarbonizing mobility. Can we say that hydrogen is automatic? Is this still the right solution?"

Amaury:"No, it's not that simple. There are currently three valid alternatives with advantages and disadvantages:

1. Bio methane:

•Advantages: it has a good overall carbon footprint

•Disadvantages: it remains a fossil fuel, which emits greenhouse gases. It is considered that these gases have been avoided upstream and therefore that theoverall footprint is lower. But you should know that a vehicle running on biomethane still locally rejects the same particles and emissions as a thermal vehicle. Moreover, it will not be possible to produce biomethane on a massive scale because that would mean transforming agricultural land to produce this fuel. And even if we did, France does not have enough land to absorb all the necessary production.

2.Electric:

•Advantages: there are no emissions released when the vehicle is in motion,which is clearly what urban areas are looking for

•Disadvantages: currently the electric does not respond to intensive or heavyuse, it is rather an excellent alternative for light use, city dwellers. In addition, there is an infrastructure problem with electricity: it is not sufficient for all these small uses. We need to multiply the charging stationsand we are not able to do it everywhere. And finally, we must not overlook the complexity of recycling batteries that use rare earths.

3.Renewable hydrogen:

•Advantages: hydrogen, due to its energy intensity, takes over from electricityfor heavy and intensive uses, such as 44-tonne trucks, public transport orwhich require power, such as tractors for example . What is also interestingcompared to electric is the very short charging time and autonomy which, beyondthe comfort of the driver, have an interesting impact on the design of theinfrastructure in a city. From an infrastructure point of view, what isinteresting is that hydrogen makes it possible to build local ecosystems: weproduce and consume on the same territory, which is a major change in ourenergy paradigm.

•Disadvantages: to make hydrogen, you need electricity and therefore the overall efficiency is a little worse than that of electricity. And, to date, the technologies are still in their infancy so there is complexity in operating these vehicles or stations, but that's normal, it was also the case with electric vehicles.

L.H.: “You talk about hydrogen ecosystems: can you describe how it works?"

A: An ecosystem is, in a given territory, the addition of:

- A renewable hydrogen production plant

- A semi-centralized distribution station

- Hydrogen end-users

Beyond the local design of the system, there is a very interesting change in the energy paradigm: we produce what we need. We reason by rationalizing energy and we goback to questioning our uses; it is in total opposition to the current system of abundance and it raises the question of sobriety.

L.H.: “How do we manage sobriety in transport?"

A: We haven't talked about it in the solutions previously, but sobriety is still thebest way to reduce the CO2 emitted. And we will be forced to do so because weare not able to replace all thermal vehicles with clean vehicles. To encourage sobriety, cities can take concrete actions:

- Give back a prominent place to active mobility with more cycle paths, more pedestrian areas. Today, our cities were designed for the car. Residential areas are far from commercial and tertiary activity areas, which does not always encourage such mobility.

- Propose are liable and dense public transport network. There are two interesting strategies today:

o Free networks to encourage the use of public transport

o Networks that continue to pay to finance the transition of their vehicles

- Implement regulatory constraints, such as Low Emission Zones. If they start with good attention, these constraints can exclude some from the energy transition.Today, unfortunately, not everyone can afford to make this transition and we must support as much as possible rather than imposing the transition by leaving it aside.

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L.H.: “Do you have any ideas for making the transition to carbon-free mobility affordable?"

A: Helping with the purchase of vehicles, consolidating uses and distribution in a given area and above all ensuring that local authorities drive the approach. By ordering a few buses, a few hydrogen household waste dumpsters, they can launch an ecosystem that will then benefit small local economic players and even Mr.Everybody.

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L.H.: “And then, what prevents communities from doing it?"

A: There are financial brakes, it requires significant investments that are not easy those days… and then it requires technical and technological skills that are still not very widespread in institutions.

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L.H.: “In a perfect world, how can we move the energy transition forward more quickly?

A: I find it interesting to link the public and the private. On the public side there isthis long time, these strategic decisions... and on the private side there is acapacity for investment and technological innovation that will make it possible, I am sure!

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L.H. :“Finally, which hydrogen innovation do you like and give you hope?"

A: “The retrofit! I find it great and it allows you to switch from thermal vehicles tohydrogen for very different uses, not necessarily urban like agricultural tractors for example.

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picture : guilherme-stecanella