EU Green Deal in Action: Critical choices ahead for the EU Low-carbon Hydrogen Definition

Image credit: © European Union, 2024

By Anna Lóránt and Léa Pilsner

The EU is finalising its Delegated Act on Low Carbon Fuels, a critical piece of its hydrogen policy. This is more than just a low-stakes technical step. If done right, it could significantly advance the EU’s decarbonisation agenda, showing the ‘Green Deal in action’. The details matter because this act will lay the foundation for Europe’s hydrogen industry and shape how effectively the EU meets its climate goals.

It is in this context that the consultation on the Delegated Act on Low Carbon Fuels will be published imminently, providing an opportunity to all interested stakeholders to share their technical input with the Commission to ensure that the DA will hold economic and climate promises when adopted mid-2025.

Many still believe that hydrogen is always clean compared to today’s fossil fuels. That can be true — if its climate risks are identified and mitigated. At the same time, it also has the potential to be very dirty (today, 99% of hydrogen is made from unabated fossil fuels, which results in substantial carbon emissions). And it can be anywhere in between depending on the emissions it creates and emits along the value chain. To deliver meaningful climate wins, the DA needs to be based on the latest science and data, comprehensive climate accounting methods and robust monitoring and verification.

A solid methodology that accounts for all climate warming emissions from the very start  

At stake in this DA is the methodology for calculating greenhouse gas emissions associated with the production of low-carbon hydrogen, which must be at least 70% lower compared to the fossil fuels they are replacing.

To make sure low carbon hydrogen is better for the climate, the DA needs to first define the main pathways for hydrogen production, assessing full lifecycle emissions for these pathways based on accurate data.

The methodology must, of course, include the usual greenhouse gas suspects, such as carbon dioxide. But it also needs to address upstream methane and hydrogen emissions. Crucially, all climate warming emissions must be included in the calculation from the very start. The Commission can prevent a problem before it risks undermining the green credentials of entire sectors of this nascent industry if this had to be retrofitted later. President Von der Leyen has been elected on the promise of delivering industrial and climate benefits hand in hand. This DA is the opportunity to prove this, making sure that industry-building legislation like this one will also respect EU climate commitments.

Methane, often used in hydrogen production, is a potent greenhouse gas with a global warming potential over 80 times greater than carbon dioxide over a 20-year period. In the past, it was often overlooked because we tended to focus on the 100-year climate impact of GHGs; but because methane stays in the atmosphere for a shorter period, reductions today can act as an emergency brake for global warming.

Meanwhile, hydrogen itself has been identified, including by the International Energy Agency and the Intergovernmental Panel on Climate Change, as an indirect GHG and short-lived climate pollutant, which, like methane, also has a big impact in the first 20 years of release into the atmosphere (almost 40x greater than CO2). While precise data on exact emissions may be lacking today, the science on hydrogen’s warming effects is robust enough to be included in policy decisions.

If we want an accurate view of how low-carbon hydrogen will actually deliver on EU climate goals, these gases must be correctly factored into the accounting — based on their warming potential over the near- (20-year) and long-term (100-year) timescales. We know that both methane and hydrogen are being released into the atmosphere (routinely and unintentionally), which can cause real damage. By completely excluding certain climate-warming emissions (hydrogen) or relying on a single default value for these emissions (methane), we risk significantly underestimating the real impact of hydrogen deployment on the climate.

The emissions data revolution

With the rapid evolution of sensor technologies able to detect emissions with unprecedented precision, using outdated assumptions becomes increasingly difficult to justify. MethaneSAT, one of the latest additions to the ecosystem of GHG-tracking satellites, will deliver a full picture of methane emissions from the oil and gas sector in 2025, providing policy-relevant, actionable data to the public. This, along with information on the origin of the fuel, allows for the use of more accurate national and regional default values. In line with the recently adopted Methane Regulation, by 2027, only verified, measurement-based methane emission data should be used in the formula for calculating GHG savings from low-carbon hydrogen.

We also need new advanced sensors to detect hydrogen emissions. Efforts are already underway to provide much needed empirical evidence to be able to quantify these emissions. Later this year, Environmental Defense Fund will test a sensor that can measure hydrogen emissions at the speed and sensitivity needed to provide this missing data in the next couple of years.

Policymakers need to be forward-thinking to avoid having to backtrack when more data becomes available soon. Taking interim measures, setting a clear plan for assessing hydrogen leakage under the gas market package, and consistently incorporating these emissions into calculations are essential steps.

A grounded view on Carbon Capture and Storage

Finally, the approach to Carbon Capture and Storage credits in the DA needs to be more realistic. A significant portion of the EU’s hydrogen production is expected to be blue hydrogen, made from fossil fuels using CCS to reduce its carbon footprint. But there are significant challenges still to overcome. To be effective, CCS technologies need to operate with high capture rates (greater than 98%) and ensure long-term storage integrity (over 1,000 years). However, the reality today is that average capture rates, which is far from today’s reality.

This discrepancy occurs because facilities often operate below maximum capacity, or may not run CCS continuously. or control emissions from all processes. Current CCS technologies also struggle to achieve consistently high capture rates across various applications. Therefore, estimates for CCS-related emissions should be based on actual capture rates not the more optimistic maximum capacity values.

In summary, thoroughly examining the crucial details of this Delegated Act, while also understanding the broader context, is essential for making the EU’s hydrogen policies and future economy both best-in-class and world-leading in terms of climate action and economic growth. Continuing with the status quo on industrial emissions is not an option, as it would lead to greater insecurity for Europeans, with more frequent and severe heatwaves, floods, droughts and wildfires. However, reducing climate-warming emissions by getting hydrogen policy right is entirely possible.