In a surprise move, the European Parliament last week voted against stringent criteria defining renewable hydrogen, which had the potential to alter the course of renewable hydrogen projects in Australia and beyond.
What’s the issue?
Europe has big plans for the production and purchasing of renewable (green) hydrogen. Indeed, it has established a green hydrogen production goal of 20 million tonnes per annum by 2030, half of which is to be sourced from international imports, meaning a major export opportunity for Australia’s clean energy superpower ambitions.
On 13 September 2022, the European Parliament beat the European Commission to the punch in finalising the rules and, in a close-run vote, pre-emptively threw out the requirements for ‘additionality’ and hourly time-matching for green hydrogen.
Instead, our understanding is that renewable hydrogen producers will simply be required to demonstrate a renewable electricity power-purchase agreement for the equivalent amount of electricity demand and to time-match on a quarterly basis up until 2030 (and thereafter, monthly, quarterly or annually).
Why did the European Parliament reject the proposed rules?
It’s not entirely clear, but the strong backlash from heavy industry and the renewable energy sector helped shift some parliamentary votes.
Why does it matter?
Prospective renewable hydrogen producers in Australia were concerned that Europe – the largest prospective export market for Australia at present – could become commercially unviable with the new rules.
There’s one (important) catch
Unfortunately, while the European Parliament’s decision bodes well for Australia, it’s not yet time to celebrate. While European MPs threw out the time-matching and additionality rules, the treatment of international imports was left in limbo, with MPs narrowly rejecting an amendment that these rules should also apply to hydrogen imports.
So what’s next?