Draft EU Council conclusions on a hydrogen market in Europe

On Tuesday 27 October, the Energy Working Party of the EU Council of the European Union, which brings together experts from the national energy delegations, will discuss the draft conclusions of the German Presidency of the EU Council on the establishment of a hydrogen market in Europe. 

The German document, obtained by EUROPE, highlights in particular the need to “design innovative financing instruments, such as carbon contracts for difference (CCfDs)”, in order to develop the hydrogen market in the EU. 

These are contracts in which a government or institution agrees with an agent a fixed price for CO₂ over a given period of time, with the aim of minimising the risk associated with investments in innovative low-carbon industrial technologies.

Under this mechanism, if the price of CO₂ in the EU Emissions Trading Scheme (ETS) is lower than the price set in the contract, the agent receives the difference. On the contrary, if the market price is higher, the agent must pay the additional revenue to the government.

Such an option is also mentioned in the EU Hydrogen Strategy presented by the European Commission on Wednesday 8 July (see EUROPE 12523/1).

Berlin also stresses the importance of actively developing the EU’s potential for renewable hydrogen, with particular reference to offshore wind energy.

The Presidency further suggests that national delegations call on the Commission to “develop a comprehensive classification and certification framework for gaseous energy carriers, including for hydrogen and its derivatives, (…), that includes information on sustainability as well as CO₂ and greenhouse-gas footprints across the whole life cycle”. The institution is also exploring this avenue.

For Berlin, the Commission should also work on the introduction of technical norms and standards to ensure that natural gas and hydrogen transport systems, including cross-border systems, are interoperable in terms of their physical properties.

See the draft conclusions: https://bit.ly/2HuX26C (Original version in French by Damien Genicot)