The European Commission should not allow low credibility fossil hydrogen to be classified as a low carbon fuel

With the launch of the new European Commission, we’re seeing a lot of end-of-year lobbying on the future of European hydrogen policy. Today GH2 wrote to the incoming Commissioners calling for rigorous standards and methods for GHG emission measurement for low carbon hydrogen. 

Read the letter here: Ensuring clear and rigorous standards and methods for GHG emission measurement for low-carbon hydrogen | Green Hydrogen Organisation

President Ursula von der Leyen, who has led the Commission since 2019, started a second mandate with a new college of Commissioners on 1 December 2024. A priority for the new Commission is a delegated act that will define low carbon hydrogen (see here and our previous wrap here).  

Noting recent commentary from some hydrogen industry participants (see here for example), we have written to the Commission on the importance of robust measurement, independent verification and public reporting of GHG emissions to ensure that low carbon hydrogen supports the realisation of the EU’s decarbonisation objectives.  

Our key recommendations are:  

1. The Delegated Act should require site specific emission factors for GHG emission reporting

The oil and gas industry wants the option to use project level data when they have a good story to tell. Otherwise, they want to be able to use “conservative” default values that are anything but conservative. Independent research consistently shows that these default values wildly underestimate actual greenhouse gas emissions. The Commission should require site specific emission factors for upstream and midstream GHG emission reporting for all economic operators, with genuinely conservative default values to be allowed only as a last resort and for this practice to be phased out this decade. As several organisations have noted, credible and verifiable carbon dioxide and methane loss data can be readily obtained for most relevant natural gas supply chain segments. Requiring independently verified site specific emission factors is technically feasible, cost effective, and reinforces the incentive to decarbonise the supply chain. The costs associated with achieving this are manageable and can be offset by tariff benefits for low carbon fuel designation.

2. The Delegated Act should not allow for early mover “grandfathering” where default values are fixed for the asset's lifetime 

The oil and gas industry calls for “maintain[ing] stable regulatory requirements during [project] operating lifetimes” to provide certainty for first movers. Allowing producers to lock in theoretical upstream and midstream methane and CO2 leakage values creates a perverse incentive to fast-track leaky projects before strict rules kick in. The solution for credible first movers is clear: they can achieve certainty (and remove the risks associated with default values) by adopting global best practice for robust site-specific measurement, independent verification and public reporting of GHG emissions. 

3. Ensure a level playing field for the utilisation of renewable electricity 

Finally, we note industry commentary that monthly matching should be allowed for low-carbon hydrogen. It is crucial that the utilisation of renewable electricity is treated consistently across all hydrogen production pathways. Some low carbon hydrogen production methods – especially ATR – utilise a substantial amount of electricity with substantial direct and indirect emissions. For renewable hydrogen, the RFNBO DAs establish strict criteria for when renewable electricity qualifies as zero greenhouse gas emissions. The same conditions should apply where LCH hydrogen producers wish to claim that they are utilising renewable electricity.

The European Union is a clear global leader in establishing mandates for renewable hydrogen production and utilisation. These demand side signals are playing a crucial role in stimulating green hydrogen project development in Europe and beyond. Any calls for flexible low carbon hydrogen definitions, fast tracking and grandfathering for early-stage project bring uncertainty to genuinely low carbon projects' viability. Allowing for low credibility fossil hydrogen to be classified as a low carbon fuel and incentivising these projects would deal a fatal blow to the renewable hydrogen industry and to the EU’s decarbonisation and energy security goals. 

Sam Bartlett

Director, Green Hydrogen Standard, Green Hydrogen Organisation