Our Senior Associate of Corporate Finance, Jack Colreavy, discusses the rules defining renewable hydrogen recently released by the EU. 

Given the sprouting of different hydrogen sources, major questions plaguing the industry focus on how consumers can distinguish between the colours of the hydrogen rainbow and what exactly is the definition of green hydrogen? Understanding what exactly constitutes "renewable hydrogen" can assist consumers when buying hydrogen and clear these doubts. 

Read the Conversation:

Jack Colreavy:

"There's a lot of hype around hydrogen and its potential to be a future player in the energy mix of a renewable energy economy; and a key part of this is what constitutes renewable hydrogen. Well, the EU has come out with a definition around this recently, and it's been long overdue. So renewable hydrogen to them is any hydrogen derived from an electrolyzer. So that's a device that splits water into hydrogen and oxygen. Now, the key input there is energy. So where does this energy come from?

According to the EU, there are three levels to renewable hydrogen. The first level is an electrolyzer linked directly to a renewable energy asset, such as wind or solar. The second is the establishment of a power purchase agreement, a PPA, while the electrolyzer isn't connected directly through the grid the purchase is made. And the third level is renewable hydrogen coming from a green grid. Now a green grid, according to the EU, is any grid with 18 grams per one kilowatt hour or less of greenhouse gas emissions.

Now, this third level was a key sticking point between France and Germany. Germany would like to see only a hundred percent renewable energy go into terming renewable hydrogen. But France, which has a grid which is powered majorly by nuclear power and has small amounts of greenhouse gas, wanted to put that green grid proviso in there in order to promote the renewable hydrogen economy in their country.

Regardless, at the end of the day, it's good to have these rules clearly in place now - what it does is it unlocks a lot of investment into the space, and we should start to see acceleration of projects for renewable hydrogen in the EU. To learn more about renewable hydrogen, please click the link in the description."

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