Draft rules proposed by the European Commission propose postponing until 1 July 2028 a decision on whether nuclear energy-derived hydrogen can be eligible for the ‘low-carbon’ label.
Nuclear energy advocates are pushing for the European Commission to label nuclear-derived hydrogen as ‘low-carbon’, but several industry sources told Euractiv that would prefer the decision is brought forward to 2026 instead of the scheduled 2028.
In late September, the European Commission released for consultation a draft legal text, or ‘delegated act’, setting out criteria to determine whether hydrogen can be officially labeled as ‘low carbon’.
This move drew the wrath of nuclear defenders, as the draft text proposed postponing a decision on whether hydrogen produced exclusively with nuclear energy can be eligible for the low-carbon label until 1 July 2028.
Hydrogen produced exclusively with nuclear energy would entail a hydrogen producer signing a power purchase agreement, known as a ‘nuclear PPA’ with a nuclear energy provider.
The nuclear industry wants a decision made much sooner.
‘We strongly advocate for the recognition of nuclear PPAs before 2028. The inclusion of nuclear PPAs would enhance predictability, mobilising private financing for new net zero technologies needed to meet EU climate goals,” a spokesperson for Fortum, the largest Finnish energy producer, told Euractiv.
In its response to the Commission’s public consultation, Fortum called for an earlier recognition of nuclear PPA and said that the Commission should accelerate work by initiating a study in early 2025.
Bring forward to 2026
Four corroborating sources from European industry and decision-makers suggest that the industry could be satisfied if the review date was brought forward from 2028 to early 2026.
Industry sources argued that the move is necessary to meet Europe’s 2030 hydrogen production targets.
“This would avoid delaying certain investment decisions in industrial projects requiring low-carbon hydrogen,” one source told Euractiv.
In France, for example, Gravithy, which wants to produce ‘carbon-free’ iron, “expresses serious concerns about the proposal to postpone in [sic] 4 years the potential inclusion of nuclear PPAs,” it said in its submission to the Commission’s consultation.
With the text, “We can now say that Europe will be a long way from achieving its target of installing 40 GW of electrolysis capacity by 2030,” French electrolyser producer McPhy argued in its feedback.
Antoine Bizet, Deputy Director of European Affairs at EDF, suggests that rather than waiting for the 2028 deadline, this period should be used to establish a so-called in Brussels ‘regulatory sandbox’, i.e. allowing experimenting with nuclear PPAs and then take stock of their contribution, he tells Euractiv.
An energy industry source in Brussels argued that another approach would be for the EU Commission “to retain its approach for this delegated act, but to ensure that it comes back to (i.e. endorses) nuclear PPPs in 2025 or 2026, through another legislative vehicle such as a hydrogen strategy or the Clean Industrial Deal.”
Other problems
The text poses problems on other points, particularly regarding legal certainty, through the possibility given to the European Commission’s Directorate-General for Competition (DG COMP) of imposing additional criteria to qualify or not hydrogen is low-carbon to benefit from state aid.
“This legal uncertainty is highly detrimental to the entire industrial sector at a time when the conditions should be in place to encourage its growth,” Bizet said.
Next deadline
Having completed the consultation process, the EU Commission will return to the delegated act as soon as the College of Commissioners is in place, according to Mechthild Wörsdörfer, Deputy Director-General of the European Commission’s energy services. Wörsdörfer was speaking the EU Hydrogen Week in Brussels on 19 November.
This could happen as soon as 1 December, after the European Parliament’s expected vote of confidence on 27 November.
Industry sources do not expect any announcements from the Commission before the beginning of 2025.
Source: Euractiv
