European Commission clarifies low-carbon hydrogen methodology in delegated act

The delegated act, which was adopted in July, supplements the 2024 Hydrogen and Gas Market Directive by establishing a harmonised framework for calculating GHG emissions savings from low-carbon hydrogen. This complements existing methodologies for renewable hydrogen and renewable fuels of non-biological origin (RFNBOs), completing the EU’s regulatory architecture for hydrogen-based energy.

As secondary legislation that supplements or amends certain non-essential elements of a parent legislative act of general application, the delegated act will enter into force if the European Parliament and Council do not object to its contents. Once approved, it will not need to be ‘adopted’ or transposed into the national laws of EU member states, as it will be directly applicable.

The European Parliament is due to vote on whether to accept or reject the delegated act next week ahead of a final deadline of 8 November, according to MLex.

Garrett Monaghan and Shani Stallard, energy experts at Pinsent Masons, welcomed the publication of the legislation.

Stallard said: “The act sets out what will and what will not be considered to be green hydrogen, providing a clear regulatory framework about how European green hydrogen production and consumption sectors can be built up. Firms, investors and regulators planning to develop green hydrogen or who want to use their renewable assets to develop green hydrogen should note and understand the new legislation.”

To qualify as ‘low carbon’ under the regulations, hydrogen must achieve at least a 70% reduction in GHG emissions compared to unabated fossil fuels. This threshold applies across the full life cycle of production, including upstream methane emissions and emissions from energy inputs. The methodology allows for a range of production pathways, including hydrogen made from natural gas with carbon capture, utilisation and storage (CCUS), and from low carbon electricity sources.

The Commission emphasised that the framework is designed to be both flexible and pragmatic, recognising the diversity of energy mixes across member states. It does not, however, define the share of renewable electricity that can be counted toward hydrogen production – a matter governed by the Renewable Energy Directive, which uses an annual average approach.

The delegated act is intended to provide a clear framework for developers which aims to accelerate the deployment of clean hydrogen technologies in hard to decarbonise sectors such as aviation, shipping and heavy industry. The regulation also aligns with the EU’s broader Clean Industrial Deal, which seeks to maintain Europe’s industrial competitiveness while achieving climate neutrality by 2050.