The different political groups in the European Parliament are struggling to agree on the approach to be taken on hydrogen. As we went to press on Tuesday 9 March, they had still not finalised the compromise amendments to the draft own-initiative report by Jens Geier (S&D, Germany) on the European Union’s hydrogen strategy.
It must be said that differences between the groups were expected in light of the debate at the end of 2020 following the presentation of Mr Geier’s draft report to the Parliament’s Committee on Industry, Research and Energy (ITRE) (see EUROPE 12613/16).
Renewable versus low carbon hydrogen
Aligning itself with the position of the European Commission (see EUROPE 12523/1), the draft report, in its initial form, noted that low-carbon hydrogen (defined by the Commission as hydrogen of fossil origin with carbon capture and hydrogen of electrical origin with significantly reduced total greenhouse gas emissions compared to existing hydrogen production) “can play a transitional role” (see EUROPE 12601/8).
According to a draft version of the compromise amendments seen by EUROPE, Mr Geier now proposes to stress “the need for investments to scale up renewable production fast enough to reach the EU’s climate targets and environmental goals for 2030 and 2050 while recognising low-carbon hydrogen as a bridging technology in the short and medium term” .
It further suggests inviting the Commission “to assess in which cases, for how long and how much low-carbon hydrogen would be needed approximately for decarbonisation purposes until solely renewable hydrogen can play this role”.
Classification
Stressing that a common legal classification of the different types of hydrogen “is of utmost importance”, the provisional compromise amendments also include a call for the Commission to conclude its work on establishing “a comprehensive, precise and science-based uniform EU-wide terminology” as soon as possible.
This classification should be determined “according to an independent, science-based assessment, stepping away from the commonly used colour-based approach” (hydrogen green, blue, grey, pink...) , add the negotiated amendments.
The text also foresees inviting the Commission to define “transparent and robust” sustainability criteria for the certification and monitoring of hydrogen in the EU, in the forthcoming revision of the Renewable Energy Directive (2018/2001), taking into account in particular the greenhouse gas footprint along the whole value chain, including transport-related emissions.
To ensure that consumers can choose sustainable solutions, guarantees of origin aligned with national registers should be considered to ensure the development of renewable hydrogen, say the MEPs.
Carbon Contracts for Differences
Another paragraph of the draft report that divides MEPs concerns the ‘Carbon Contracts for Differences’ (CCFD) envisaged by the Commission to develop renewable and low-carbon hydrogen by supporting investment.
According to the institution, a public counterpart would thus remunerate the investor by paying the difference between the strike price of CO2 and its real price in the EU Emissions Trading Scheme (ETS), thus closing the cost gap with conventional hydrogen production.
Joining the Commission, the provisional compromise amendments stress that these contracts “could be considered for a transitional period to promote decarbonisation through hydrogen where that is vital in order to preserve the competitiveness of end users”.
Finally, although the draft text notes the role that carbon dioxide capture, utilisation and storage (CCUS) “can play”, it states that priority should be given to direct emission reductions and actions to maintain and enhance natural carbon sinks and reservoirs.
The majority of the compromise amendments are expected to be supported by the S&D, Renew Europe, Greens/EFA and The Left groups. On Tuesday, the EPP Group was still trying to get some changes before giving its green light. The Greens/EFA and The Left also tabled three compromise amendments, according to a parliamentary source.
A final version of the compromise amendments could be sent to MEPs on Wednesday 10 March, according to our information.
The vote in the ITRE Committee remains set for 18 March, with a view to a vote in the European Parliament plenary session in April. (Original version in French by Damien Genicot)