European Parliament pushes for life-cycle analysis backed standard for hydrogen and ammonia
BRUSSELS – Today, the European Parliament Committee on Industry, Research and Energy (ITRE) voted its position on the Directive on Common rules for the internal markets in renewable and natural gases and in hydrogen. Led by rapporteur Jens Geier (S&D, DE), ITRE adopted changes which, if confirmed following trilogue negotiations, could spur the international trade of hydrogen while ensuring that it is actually beneficial for the climate.
“Defining the standards that fuels like hydrogen and ammonia must achieve to truly be climate beneficial has been somewhat overlooked amongst all the discussion around how or where such fuels will be used,” said Magnolia Tovar, CATF’s Global Director, Zero-Carbon Fuels. “It is good to see Parliament addressing this oversight. Producers and consumers currently using unabated fossil fuels require clarity around how emissions from the production and transport of these new low-carbon fuels will be quantified before they make the switch – and ITRE’s position puts us on track to establish that clarity.”
The ITRE Committee decided to stress that all the emissions of low carbon fuels should be integrated in the lifecycle assessment methodology, something that CATF has been advocating for in the past 12 months. The position adopted today clarifies that, at least, “upstream emissions from extraction of the fossil fuel, feedstock production and transportation, emissions from LCF production and processing, and emissions from transportation and distribution of LCF as well end-use emissions, considering methane leakages all along the value chain,” should be included in the lifecycle assessment methodology for certification.
ITRE explicitly mentioned the need to include methane emissions. Methane leaks are indeed one of the most important risks of emissions of low-carbon hydrogen. Given its global warming potential, not addressing methane leak would prevent any low-carbon hydrogen to be beneficial for the climate. Even at very high carbon capture rates, high upstream methane leak rates could dominate total lifecycle emissions, making it critical to include methane upstream emissions for low-carbon GHG LCA, as the Parliament did today, sending a clear signal to partners considering exporting to Europe.
The Parliament is also calling to advance the certification and the methodology delegated act, initially planned by the Commission for end of 2024. There is a pressing need for the implementation of an EU and internationally aligned hydrogen certification system which provides transparency in hydrogen products GHG emissions reduction and creates an environment suitable for investment in these technologies.
Last year, CATF covered the importance of complete life-cycle analyses of hydrogen and ammonia as well as various design options for such standards.
“It’s important to remember that, right now, the low-carbon fuels under discussion are produced on a very small scale, and most are consumed where they are produced. In short, there is no real hydrogen market today – but there will be in a decarbonised global energy system,” continued Tovar. “Without commonly agreed standards, the potential climate benefits of a new global market for zero-carbon fuels are limited. European leadership on this issue could therefore have positive impacts on a global scale.”
Member states such as the Netherlands and Germany have announced Memoranda of Understandings (MoU) to import renewable and low-carbon hydrogen and hydrogen carriers from regions rich in natural resources. With the timeline proposed initially, there would be a risk to have low-carbon hydrogen traded in Europe before a methodology assessing that they are actually low-carbon is developed and implemented. The decision of the Parliament to advance the timeline of the Delegated Act to 6 months from the date of entry into force of the Directive is also welcome.
While Parliament voted today on its position, the Council hasn’t adopted yet its general approach. Only after trilogues will we know if these important elements in the Gas Package will make it into the legislation.
Electrification will be fundamental to decarbonise our economies, as electricity is expected to make up 50% of Europe’s energy share by 2050. However, projections suggest that fuels will be needed to decarbonise difficult to electrify sectors such as industrial process heating, ironmaking, maritime and long-haul transport, and aviation.
In RePowerEU, the European Commission set targets to increase hydrogen consumption from about 8.3 Mt per year to approximately 20 Mt per year by 2030, while the bloc is still in the process of decarbonising its electricity grid. While 100% green hydrogen is considered the end goal in Europe’s Hydrogen Strategy, it is not expected to be sufficient in the near future to replace existing grey hydrogen production and satisfy the expected demand for hard-to-abate sectors. Renewable and low-carbon hydrogen imports are therefore expected to play an important role in the future to supply decarbonised gas to key sectors of the economy, mainly through imports of low-carbon hydrogen to Europe.
However, to ensure climate benefits, it would be crucial that low-carbon gases are low-carbon in practice, cutting emissions on the full value chain. The Gas Package Directive will have a key role in enabling the international trade of hydrogen while at the same time ensuring that it is actually beneficial for the climate trough a strict definition of low-carbon hydrogen. This legislation will adopt a definition of low carbon and clarify which emissions should be covered when assessing the emissions of low-carbon hydrogen, with the details of the methodology being defined later on by Delegated Act.
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About Clean Air Task Force
Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With 25 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf.
