Thread by @anunezjimenez

Yesterday, the EU Council and Parliament reached a provisional agreement on the renewable energy directive.

Here's what it could mean for #hydrogen

The agreement sets a target of 42.5% renewable energy in the EU's overall energy mix by 2030.

The agreement also includes sector-specific targets where the role of #hydrogen becomes more prominent.

This quick analysis is based on the press release: consilium.europa.eu/en/press/press…

For reference, these are the shares of #renewables across sectors in the EU in 2021:

21.8% overall renewables

37.5% renewables in electricity

22.9% renewables in heating and cooling

9.1% renewables in transport

Eurostat: ec.europa.eu/eurostat/cache…

🚗Transport
EU states can choose between two binding targets for 2030:
▶️-14.5% GHG intensity
▶️29% renewables
There is an additional binding sub-target:
▶️5.5% of biofuels + renewable #hydrogen
With a minimum requirement of:
▶️1% renewable #hydrogen
Map: % RE in transport 2021

🚗Transport
The EU consumed nearly 3,200 TWh for transport in 2021.
Focusing on the sub-targets and assuming no biofuels, the preliminary agreement translates to a demand for renewable #hydrogen of roughly between 1 and 5.3 Mt H2 by 2030.

Industry

EU states aim to increase renewable energy in industry by 1.6% p.a. until 2030.

Big targets for renewable #hydrogen:
42% by 2030
60% by 2035

But countries can cut these goals by -20% if they meet their RE target and fossil-based hydrogen is <23% by 2030 & <20% by 2035

Sidenote:
Some may sell it as a win for team low-carbon H2. But I am not sure reaching 77% of non-fossil hydrogen by 2030 and 80% by 2035 while reaching their overall renewable energy target is much easier than 42% of renewable #hydrogen by 2030 and 60% by 2035.

Industry

In 2021, EU-27 countries consumed 3.9 Mt H2 in industry (excl. refining). Therefore, a first approximation demand for renewable #hydrogen in industry would be:

- 0.9-1.6 Mt H2 by 2030
- 1.5-2.3 Mt H2 by 2035

Other elements of the agreement (buildings, biomass, permitting) do not include specific targets for #hydrogen (or, at least, they are not mentioned in the press release).

Overall, the provisional agreement on the Renewables Energy Directive would imply targets for renewable #hydrogen demand of roughly:

- 2-7 Mt H2 by 2030
- 3-8 Mt H2 by 2035

*Note that targets for transportation are only mentioned until 2030 in the press release.

My first impression: these targets for renewable #hydrogen look realistic, compared to the 20 Mt H2 by 2030 in the #REPowerEU package, and rather modest.
At the lower end, ReH2 would cover ~25% current EU hydrogen demand (less because the deal expects new demand from transport).

Having a target is better than not having it. However, this agreement looks over-complicated, with targets and sub-targets and ways of getting out of obligations, and too open. A target range of 2-7 Mt H2 still leaves a lot of uncertainty about where EU H2 demand will be in 2030.

But given the huge uncertainty that the #hydrogen industry has had to live with for the past couple of years, having targets for hydrogen is an improvement.

Now, if the Directive is approved and the DA finally enters into force, let's hope deployment of ReH2 accelerates./fin