The European hydrogen quota has been raised, and the green hydrogen market is about to explode

Recently, the European Union stipulated that the proportion of renewable hydrogen in industrial hydrogen demand by 2030 should reach 42%, and the total renewable hydrogen required to meet the EU quota is 2.1 million to 4.2 million tons. In order to tap into the EU's huge renewable hydrogen demand market, green hydrogen suppliers must not only consider market competition, but also meet EU renewable hydrogen production rules.

In February 2023, the European Union adopted two enabling acts required by the Renewable Energy Directive (RED II) and proposed detailed rules to define what constitutes renewable hydrogen in the EU. The European Commission has proposed three criteria to determine green hydrogen, one is the hydrogen produced by the electrolytic cell directly connected to the new renewable energy power generation facility; The second is to use hydrogen produced by the grid in areas where the proportion of renewable energy exceeds 90%; The third is hydrogen produced by grid power supply after signing renewable energy power purchase agreements in areas with low CO2 emission limits.

In the case of electrolytic cells directly connected to renewable energy generation facilities, the two should be in the same plant, or directly connected between the two by line. If the renewable energy generation facility is connected to the grid at the same time, it must be proved by smart meters that no electricity is being extracted from the grid for electrolytic hydrogen production. In addition, renewable energy generation facilities should be put into operation no earlier than 36 months before the electrolytic cell. The new rules require that renewable hydrogen be produced using electricity from new renewable power plants - the "additionality" criterion. This guideline aims to ensure that the increase in renewable electricity installed on the grid is incentivized through renewable hydrogen production projects.

For areas where the average share of renewable electricity in the grid exceeds 90% in the previous year (assuming that it exceeds 90% in the next five years), hydrogen produced by electrolysis from grid electricity is renewable hydrogen when both the electrolyzer and the renewable energy plant are located there.

For areas with electricity emission intensity below 18gCO2eq/MJ(64.8CO2e/kWh), the enterprise has signed a renewable energy power purchase agreement with the operator of renewable energy power, and when the corresponding time and regional correlation is met, the hydrogen generated by electrolytic hydrogen production from grid power is also renewable hydrogen.

According to the time-dependent principle, from 2030 onwards, electrolytic hydrogen production should be hourly matched with the renewable electricity used. As a transitional provision, until December 31, 2029, if a monthly match is achieved, the time correlation requirement is deemed to have been met. The principle of geographical relevance requires that the electrolytic cell and the renewable energy generation facility must be located in the same region at least at the time of operation.

According to the European Commission's strategic policy paper titled "European Hydrogen Bank" published in March this year, 30% of global hydrogen investment is currently concentrated in the EU. In June, the Spanish government announced that it would allocate 100 million euros to seven large-scale green hydrogen projects to accelerate the layout of the green hydrogen industry and create a continental supply center. Coincidentally, the German government recently adopted a new version of the National Hydrogen Energy Strategy, which once again emphasized the priority development status of "green hydrogen".