Ahead of the publication of the European commissions draft delegated act on article 27 (3) of the renewable energy directive, leading electrolyser manufacturers from across Europe signed and sent a joint letter to the commission calling on them to ensure that the EU provides a clear and workable framework to incentivise and enable the production of and a market for renewable hydrogen.
This delegated act will define the future of renewable hydrogen developments in Europe and Europes ambition to be a leader in renewable hydrogen technology.
Dear Mr. Seibert,
Dear Mr. Samsom,
Dear Mr. Grassi,
Dear Mr. Moutarlier,
The EU’s renewable hydrogen ambition represents a once-in-a-lifetime opportunity for creating a new European industrial champion: the electrolyser industry. Electrolysis was born in Europe and still six out of the ten largest manufacturers in the world are European. After years of intense research and technological development, the industry is now ready to deliver on the promise to help make Europe the first climate-neutral continent in the world.
The undersigned companies have already frontloaded significant investments to upscale electrolyser manufacturing capacities and have all announced further massive investments to enable the ambition and targets foreseen by the EU Hydrogen Strategy. Plans for developing several electrolyser gigafactories in Europe are ready to be implemented. In total, more than 80% of future electrolyser manufacturing capacity is currently planned to be located in Europe.
The recently tabled Fit for 55 Package is well in line with this endeavour by proposing ambitious but achievable green hydrogen targets for the industrial and transport sectors. These targets will help to deliver capex cost-reductions for electrolysers by creating the necessary demand to unlock economies of scale.
Yet, the upcoming Delegated Act on Art. 27(3) of the Renewable Energy Directive (RED II) threatens to inhibit progress. It is of utmost importance that the Delegated Act is brought in line with Europe’s ambition to become a champion in renewable hydrogen production.
Mandating excessively rigid criteria (concerning additionality, temporal correlation and geographical correlation) will seriously disrupt emerging partnerships in the renewable hydrogen supply chain and hamper the scaling up of the electrolyser manufacturing capacities. Our customers point to the serious risk that the complexity of the process and the stringent requirements will undermine the feasibility and realisation of green hydrogen projects in practice. Without a strong European home market, necessary investments will be put at risk and the development of our nascent industry will be seriously impeded.
We therefore ask the European Commission to consider the following key points:
- Allow the renewable hydrogen market to develop and reach a more mature state by phasing- in the requirements of the Delegated Act once permitting bottlenecks for renewable energy are resolved.
- Enable business models by allowing renewable electricity to be sourced from existing installations which are no longer subsidised; allowing curtailed and previously stored electricity to be used on flexible terms; and starting out with a realistic temporal correlation which could in time be brought down to a daily correlation.
Electrolysers help to bring renewable energy in the form of molecules into all sectors in need of decarbonization. Disincentivizing investments in electrolysers by burdening project developers with complexity and costs means risking a lock-in of fossil hydrogen technologies and hence the opposite of what the Delegated Act aims to achieve.
We call on the European Commission to enable, rather than restrict, business models for renewable hydrogen by bringing the Delegated Act in line with the EU’s stated ambition. Renewable hydrogen will be an unprecedented industrial and environmental success story for Europe if we set the course right.
Managing Director Electrolysis
Head of Energy Policy & Government Affairs
Jon André Løkke