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On 20 May 2022, the Commission published for feedback two draft delegated acts under RED II as part of REPowerEU, the Commission’s plan to speed up the energy transition and reduce dependency on Russian fossil fuels. The first delegated act was issued under Article 27(3) RED II and establishes a Union methodology for setting out detailed rules for the production of renewable liquid and gaseous transport fuels of non-biological origin, or so-called ‘RFNBOs’ (the ‘RFNBOs DA’). The second delegated act was issued under Articles 25(2) and 28(5) RED II and establishes a minimum threshold for greenhouse gas emissions savings of recycled carbon fuels, and specifies a methodology for assessing greenhouse gas emissions savings from RFNBOs and recycled carbon fuels (the ‘GHG Methodologies DA’). One core purpose of the draft delegated acts is to ensure that hydrogen production leads to net decarbonisation.
Hydrogen can either play a key role in or present a significant obstacle to the EU’s energy transition. To ensure hydrogen contributes to achieving the EU’s climate objectives and Paris Agreement commitments, its production must be targeted. Hydrogen must be produced entirely from additional renewable electricity and directed only towards hard-to-abate industrial and transport sectors where other interventions such as electrification, efficiency, or sufficiency are not possible. If the principle of additionality is not adhered to, and if hydrogen is widely used outside hard-to-abate sectors, the production of hydrogen will instead cannibalise existing renewable electricity that is needed to decarbonise other sectors. This would place the EU significantly off-track of meeting its 55% reduction target by 2030 and climate neutrality by 2050.
Civil society has demonstrated how the proposed delegated acts, if adopted, will significantly impede the energy transition by promoting the over-production and consumption of hydrogen, and how they will establish an uneven playing field between Member States. On 15 June, these organisations sent a letter to President von der Leyen stressing their concerns. As demonstrated by those organisations, the more harmful effects of the proposed legislation can be mitigated through better adhering to a strict principle of additionality and by removing the grandfathering clause (Art. 8 RFNBO DA) and the ability to double-count renewable electricity (e.g., Annex Arts. A.6, A.7 GHG Methodologies DA) from the proposals.
This briefing supplements that analysis and the comments submitted by civil society in connection with this feedback period, by demonstrating that the proposed delegated acts are not only bad policy, they are unlawful. They fail to abide by RED II’s plain language on additionality and, if adopted, will breach core principles of EU climate, energy, and environmental law. The following is a concise overview of the main legal problems of the proposed delegated acts, which must be remedied to ensure the acts are lawful.