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REPowerEU
On 18th May 2022, the Commission presented the REPowerEU Plan as a response to the energy market disruptions caused by the invasion of Ukraine; and seeks to rapidly reduce the EU's dependence on Russian fossil fuels.
Under the plan, the Commission proposed a series of amendments to increase the ambition of several files being revised under the Fit for 55 package. These amendments are to the Renewable Energy Directive, Energy Performance of Buildings Directive (EPBD), and the Energy Efficiency Directive.
Most of the amendments were focused on the Renewable Energy Directive (RED), where the Commission proposed an increase of the renewable energy sources in the EU final consumption to 45% by 2030 (5% higher than the Fit for 55 proposal). At the end the co-legislators settled on a 42.5% target by 2030 during the RED revision process. The Commission also proposed to accelerate permitting for renewable energy power plants, such as ‘renewable go-to areas’, in turn the co-legislators agreed on temporary emergency regulation to speed up permit-granting procedures for renewable projects and facilitate power purchase agreements.
On the Energy Performance of Buildings Directive, the communication proposed an obligation on Member States to ensure solar readiness on specific building stock by the years 2027-2030. For the Energy Efficiency Directive, the amendment is to target an EU reduction of energy consumption of at least 13% by 2030, as compared to the 2020 Reference Scenario. The co-legislators agreed on a 11.7% reduction by 2030
As part of the plan, the Commission proposed amendments to the Recovery and Resilience Facility Regulation to allow for Member States to integrate REPowerEU chapters in their RRF plans to finance investments and reforms targeted at achieving the REPowerEU objectives. On the 21st February 2023, the amendments were formally adopted with the main elements being:
- €20 billion in new grants to finance measures to be included in national REPowerEU chapters from the frontload sale of ETS allowances and from the Innovation Fund;
- €5.4 billion of funds from the Brexit Adjustment Reserve that Member States will be able to voluntarily transfer to the RRF to finance REPowerEU measures, on top of the existing transfer possibilities of 5% from the Cohesion policy funds (up to €17.9 billion).
Member States will have the possibility to request pre-financing of up to 20% of funds allocated to REPowerEU chapters, payable in a maximum of two tranches.
The REPowerEU strategy also highlighted the need to strengthen Europe’s industrial competitiveness and support international technology leadership. It estimates that energy efficiency, fuel substitution, electrification, and an enhanced uptake of renewable hydrogen, biogas and biomethane by the industry could save up to 35 bcm of natural gas by 2030 on top of what is already foreseen under the ‘Fit for 55’ package. As such, the Commission outlined measures to support both the adoption of hydrogen and electrification in the industrial sectors.
What’s in it for hydrogen?
Hydrogen is identified as one of the six components to increase the resilience, security and sustainability of the EU’s energy system, apart from energy savings, diversification of energy sources, acceleration of the clean energy transition and smart investments.
Within the section devoted to the hydrogen sector of the REPowerEU Plan, the Commission set the key, indicative target of 10 million tonnes of domestic hydrogen production and 10 million tonnes of imported renewable hydrogen by 2030.
To achieve this, the plan outlined six key measures:
- Call for action to the European Parliament and the Council to align the sub-targets for RFNBOs in industry and transport in the revised Renewable Energy Directive with the REPowerEU ambitions, by proposing raising the target for industry from 50% to 75% and for transport from 2.6% to 5%. It also called on the institutions to rapidly conclude the revision of the Hydrogen and Decarbonised Gas Market package, which they did in December 2023;
- Top-up of Horizon Europe investments in the Clean Hydrogen Partnership with €200 million to double the number of Hydrogen Valleys;
- Opening of public consultations on the two Delegated Acts on the definition of RFNBOs and on the methodology for accounting their GHG emissions. Since then the delegated acts were published on 13th February 2023 and adopted on the 20th June 2023.
- Finalising the assessment of the first IPCEIs on hydrogen by Summer 2022. Since then the Commission published three waves of IPCEIs between 2022 July and 2024 March).
- Call for action to industry to accelerate the work on missing hydrogen standards, in particular for hydrogen production, infrastructure and end-use appliances;
- Commitment to regularly report on hydrogen uptake and the use of renewable hydrogen in hard-to-abate appliances in industry and transport.
For hydrogen import infrastructure, the Plan identified three major import corridors (Mediterranean, North Sea area and, as soon as conditions allow, Ukraine) and provided industry with dedicated platforms where major players within these corridors can connect, partner up and work towards the import target set. In a similar vein, the Commission proposed to establish the Global European Hydrogen Facility, a European counterpart of the German H2Global initiative. This initiative will likely form part of the Hydrogen Bank framework, collaborating strongly with the German H2Global setting.
Finally, in the context of the REPowerEU efforts, the Electrolyser Partnership was created at the Electrolyser Summit in May 2022. The Partnership is a dedicated platform under the European Clean Hydrogen Alliance, that brings together electrolyser manufacturers and suppliers of components and materials within the Alliance structure, with annual high-level meetings and year-round topical discussions. With the support from the Commission in removing regulatory, financial, and supply-chain roadblocks, electrolyser manufacturers aim at achieving 17.5 GW of combined annual electrolyser manufacturing capacity by 2025.
Links to the original document and additional information:
Press Release on Electrolyser Partnership
