Hydrogen Europe CEO: “We Need Legal Certainty Now”

By September 27, 2022 9   min read  (1668 words)

September 27, 2022 |

Fuel Cells Works, Hydrogen Europe CEO: “We Need Legal Certainty Now”.

Despite the recent change of direction in the EU Parliament, the hydrogen industry continues to insist on a delegated act on so-called additionality. In addition, hydrogen cars will soon become a reality, Jorgo Chatzimarkakis told EURACTIV.

Jorgo Chatzimarkakis is the CEO of Hydrogen Europe, an association representing the interests of the hydrogen economy in Brussels. Previously, he sat from 2004 to 2014 for the FDP in the EU Parliament.

The conversation with Chatzimarkakais followed a controversial amendment to EU law that turned the rules for classifying hydrogen upside down.

Actually, Brussels wanted to assume the so-called “additionality”. Accordingly, hydrogen would only be classified as “green” if it is produced by additional renewable energy carriers. However, the EU Parliament had voted to override this approach.

Mr Chatzimarkakis, as far as the legal framework for hydrogen is concerned, these have been eventful weeks. Most recently, the EU Parliament presented a new definition for green hydrogen, which was actually the job of the EU Commission?

Jorgo Chatzimarkakis CEO said:

Yes, that was Amendment No 13 in the Renewable Energy Directive.

The Commission is now confused because it says: ‘Okay, Parliament is now assigning us the job, so to speak, of translating its proposal into law and abandoning the delegated act on additionality’.

Do you agree with that?

That would leave us in limbo for two more years before the provisions of the directive have been transposed into national legislation; however, legal certainty is needed as quickly as possible for the hydrogen ramp-up. We urgently need the legal act that regulates additionality, additionality.

That is why MEPs, including the responsible rapporteur Pieper, will now meet – across political groups and also across committees. All those who have something to do with hydrogen. You want to write down a few key points in the near future and discuss them with the Czech Presidency. Fortunately, the latter has also agreed to participate in this.

On the basis of this new paper, the Commission will then present a revised delegated act.

The reins of action now lie somewhere with Parliament and the Council to give the Commission guidance.

How much time do you give yourself for this and will the Commission participate in this at all?

It will. I’m pretty sure of that. Because time is of the essence and Europe has now waited long enough. And the internal discussions within the Commission must now come to an end.

What the Commission approved for consultation in spring 2022 is not feasible globally. With this proposal, Europe is “shooting itself down”.

The timetable will be set by the upcoming trialogue. When the trialogue starts, the proposal must be on the table, i.e. by the end of September.

What is the exact goal?

The goal remains the same. However, the methods adapt to a global hydrogen situation that has suddenly changed fundamentally.

Here, the US Inflation Reduction Act has imposed completely new conditions. And renewable hydrogen produced in the US will be much more competitive than the European one.

To what extent are Germany and France, the two largest member states, involved here?

Both large member states, the german-French axis, have a certain credibility problem with their respective national energy policies: Germany with its one-sided focus on gas and Russia and France with its focus on nuclear power and opposition to the import of hydrogen.

On the other hand, Germany intervened in December 2021. At that time, State Secretary Patrick Graichen, together with a colleague in the Ministry of the Environment, sent a letter to the Commission criticising the Commission’s approach.

Did that change anything?

The German intervention is also ultimately the nucleus of the European Commission’s latest leak on delegated acts, which contains elements of the German proposal. In this respect, I have to say that I find Germany very constructive.

France has now insisted on not pursuing an import strategy (hydrogen) and, incidentally, not ultimately freeing up its country for the flow of hydrogen, for example from Spain to Germany, because they are against the construction of a pipeline (the MidCat project).

Just a few years ago, blue hydrogen, which is produced with the help of natural gas, was on everyone’s lips, what about it at the moment?

Blue hydrogen is not competitive at the moment. We see that, of course, all sources, as long as they are climate-compatible, must optionally be kept open.

Let me give you the example of AdBlue. For this you need ammonia. Ammonia is made from hydrogen and nitrogen. And if producers could now only buy blue hydrogen in the short term because the renewable infrastructure is not there yet, the electrolysers are not there yet, then they have to do so, because otherwise they would interrupt the supply chains.

But ammonia also has a broader role?

We are currently working with the chemical industry to create very fast ways to get ammonia (North Africa) and possibly also to use decommissioned pipelines to bring ammonia to the chemical industry, which needs it, as quickly as possible. Everything that is renewable works like this.

What I’m saying is that the blue option is just way too costly right now. If I park my car at a hydrogen filling station where there is blue hydrogen, I pay 15 € per kilo. Where there is green hydrogen, I pay ten euros. I can see the difference right here today.

While we’re on the subject: Where are all the hydrogen cars, are they still coming?

You have to fence the horse properly. With the Alternative Fuel Infrastructure Regulation (AFIR), we now get an effective instrument. It will be an instrument that provides a great deal of charging infrastructure to create hydrogen solutions.

What exactly comes next?

Every 100 kilometres there will be a hydrogen filling station along the European TEN-T transport network.

This is a huge investment in hydrogen. We could cover half of it through private funds, and the other half would then have to be publicly funded.

Once this infrastructure is there, it will of course be used primarily for the trucks, i.e. for the trucks. But once the filling stations are there, manufacturers and customers will also demand hydrogen cars.

I used to be the only one at hydrogen filling stations. Now there is usually someone who also wants to refuel the hydrogen car. Currently, hydrogen cars benefit from the chip shortage, in the future the question of raw materials will be important.

Is the fascination with the hydrogen car a purely German phenomenon?

I was at a European congress yesterday and I was approached by Spaniards as well as by Italians and by a Finn. In Germany, of course, there is a big discussion here.

In India, hydrogen cars are particularly popular; there it is part of the rivalry with China.

Now Commission President Ursula von der Leyen has also announced a new hydrogen bank, but she has so far failed to provide details. Investments should be stimulated, what can we expect? The Federal Government has already made the beginning with the H2-Global Foundation.

H2-Global would be a very good role model if it were based on a European foundation model. Ultimately, this bank will essentially be an agency that will have to make a political decision. The €3 billion it is to be endowed with is not enough to buy the 10 million tonnes of hydrogen [the EU’s overall target for 2030].

The €3 billion is the capital, which is ultimately the subsidy that makes up the difference. In total, we will need about €20 billion to buy these 10 million tonnes of hydrogen.

The bank buys the 10 million tons and then sells them for a lower price. The difference could be the 3 billion. We are now starting to carry out the “fine tuning”, i.e. the calculation. But that, in essence, is the model. Then it is the agency within this bank that then decides who gets the hydrogen.

More than half of it will certainly go to fuel manufacturers due to the EU’s fuel supplier targets. For the rest, a political decision is pending: Are fertilizer manufacturers more important than car manufacturers? When does steel come into play? The steel industry is indeed a customer, but not immediately.

The chemical industry, on the other hand, can immediately switch to green hydrogen. Finally, if a customer like BASF fails, then their hydrogen quota goes to the next customer.

But in order to secure the necessary production, does it need legal certainty?

We now need legal certainty through various legal acts. Not only the additionality is in the room, but also the methodology to calculate the CO2 footprint.

In the spring, the Commission proposed a draft law to calculate the CO2 footprint of hydrogen.

But no one understands this piece of legislation. I have not yet found anyone who could explain this to me in simple words. And that is why this is the next important step: that the Commission basically rethinks this proposal completely and takes the “better regulation” approach seriously.

We don’t have the time anymore. We must now have clear, easy-to-understand rules that allow, for example, an investor from India to invest $100 billion.

Interview highlights:

  • Hydrogen Europe nevertheless absolutely wants the delegated act on additionality.
  • Internal coordination is currently underway between Parliament and the Council Presidency for a compromise proposal.
  • In December 2021, shortly after taking office, the German government intervened with the EU Commission in favour of the hydrogen economy.
  • The Biden administration’s Inflation Reduction Act has permanently changed the hydrogen playing field.
  • Blue hydrogen produced using natural gas and carbon capture is no longer competitive.
  • Hydrogen cars are not a purely German phenomenon, the hydrogen economy is hoping for the new rules from Brussels.
  • The EU’s hydrogen bank will be a political agency that decides who will receive the relatively rare hydrogen in the medium term, e.g. the steel or fertilizer manufacturers.

Source: Hydrogen CEO: “We need legal certainty now

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