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REPowerEU
In 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.
The amendments prominently focussed on the Renewable Energy Directive (RED). The Commission proposed increasing renewable energy sources in the EU final consumption to 45% by 2030, but co-legislators settled on a 42.5% target. They agreed on temporary regulations to speed up permitting 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. By February 2023, the amendments were formally adopted, including:
- €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 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 aims to boost Europe's industrial competitiveness and tech leadership. It predicts energy efficiency, fuel substitution, electrification, and greater use of renewable hydrogen, biogas, and biomethane could save up to 35 bcm of natural gas by 2030, in addition to goals from the 'Fit for 55' package. The Commission proposed measures to promote hydrogen and electrification in industry.
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. The Delegated Acts have since entered into force, in June 2023.
- Finalising the assessment of the first IPCEIs on hydrogen by Summer 2022. Since then the Commission published four waves of IPCEIs..
- 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 industries and transport.
The Plan identified three main hydrogen import corridors: the Mediterranean, North Sea area, and Ukraine. It provided platforms for industry players to connect and work towards the import targets. Additionally, the Commission proposed the Global European Hydrogen Facility to act as a Europe-wide version of Germany's H2Global initiative under the Hydrogen Bank framework.
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 to bring 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 Legislation and additional information:
