A Call for Pragmatic and Enabling Rules for RFNBO Hydrogen in the Upcoming Omnibus Regulation
Dear President von der Leyen,
As executives in Europe’s electrolysis industry, we fully support the European Union’s vision of RFNBO hydrogen as a cornerstone of the Clean Industrial Deal and a pillar of long-term energy sovereignty. To realize this ambition, scale up the European electrolyzer industry, and deploy projects across Europe, we urgently need a regulatory shift – one that simplifies overly rigid frameworks while keeping RFNBO hydrogen at the heart of efforts to build a more resilient energy system.
With the upcoming Omnibus Regulation scheduled for this fall and DG Energy’s study assessing the effectiveness of the RFNBO framework, the European Commission has a timely and strategic opportunity to adjust the regulatory landscape and introduce necessary flexibility to the rules governing RFNBO hydrogen. From the evolving geopolitical and economic landscape to the exponential increase in competition for renewable PPAs driven by AI/data centers and growing demand for electrification, a policy adjustment is needed if Europe is serious about scaling electrolysis deployment and meeting its RFNBO targets.
The reality today: Europe has failed to hit its target for 6 GW of installed electrolysis by 2024. The electrolyzer industry has deployed less than 1 GW in installed projects, even though we have delivered on our commitment to increase manufacturing capacity tenfold—from 1 GW to 10 GW per year.
Meanwhile, projects are close to making final decisions – not for investment, but for cancellation. More than 50 projects have been cancelled in the last 18 months, at least 80% of which were early-stage RFNBO projects. Demand is critical, but it relies on enabling policy. Without it, factories will remain idle, and Europe runs the risk of losing another critical tech industry to global competitors.
While we acknowledge the European Commission’s plan to assess the effectiveness of the RFNBO Delegated Act through a study, urgent amendments are required to specific provisions that are putting the very survival of the RFNBO sector at immediate risk. We therefore urge the European Commission to ensure that the Omnibus Regulation:
• Keeps RFNBO hydrogen central to Europe’s clean industrial strategy
• Enables a targeted revision of the RFNBO DA and the additionality principle
• Counts subsidized renewable assets as additional
• Extends exemptions on additionality until 2035,
while maintaining the grandfathering clause.
In addition, the European Commission’s study on the effectiveness of the RFNBO DA should:
• Conduct a thorough, data-driven assessment of the liquidity in the renewable PPA market and its ability to offer competitive PPAs to future RFNBO producers before transitioning to more granular time-matching requirements.
• Consider adopting weekly, monthly, or daily matching instead of strictly hourly matching.
If RFNBO hydrogen is to reach meaningful scale, the stringent rules around additionality, spatial, and temporal correlation must be simplified. If these rules remain unchanged, only a handful of small projects will reach final investment decision (FID).
The three pillars of the RFNBO Delegated Act are especially challenging for larger projects, which are vital for achieving sufficient scale and driving down the levelized cost of hydrogen.
With the current framework, the emerging hydrogen and electrolyzer industry – and RFNBO hydrogen pricing – carry the burden of renewable energy build-out and grid stability services
without being adequately compensated for these indirect benefits.
Europe cannot afford a regulatory structure that looks good on paper but fails to enable real-world deployment. Our companies have already invested and are ready to scale up further, but
we need legislation that empowers, rather than impedes, the realization of the Clean Industrial Deal and our resilience and decarbonization goals.
It’s equally crucial to stimulate demand for RFNBO hydrogen within the EU, particularly by fully incorporating RED III into national law.
The Omnibus Regulation and DG Energy’s study are the right tools, at the right time, to move Europe from ambition to action and to advance the changes needed to achieve the scale required to meet our climate targets.
Sincerely, Håkon Volldal President & CEO Nel Hydrogen, Anne-Laure de Chammard Member of the Executive Board, Siemens Energy AG, Nils Aldag CEO Sunfire,Kim Hedegaard, CEO PtX
TOPSOE
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Source https://tinyurl.com/ysvvdtzw
