There is a wide variety of hydrogen definitions, many of which include a form of "colour coding." The spectrum starts with "green hydrogen" and reaches all the way from "blue" and "turquoise hydrogen", to "grey" and even "pink hydrogen". In particular, the German Hydrogen Strategy includes such a colour-coding concept. The EU Hydrogen Strategy and the French Hydrogen Strategy, on the other hand, do not. They rely on terminology that is more descriptive, e.g., "Fossil-based Hydrogen."
Why does this matter? Even though the strategies themselves are not legally binding, the definitions used in them are likely to be referenced by legislators, for instance when issuing subsidies or permits. It is therefore important to look at the context of the respective hydrogen definition and what it does in the respective regulatory framework.
The European Union has not yet adopted an EU-wide set of legally binding definitions.
This has not prevented France from moving forward with its own definitions under the Ordinance of February 17, 2021, the first attempt in Europe at building a unified set of regulations for clean hydrogen (including a support scheme and a traceability system). More specifically, it defines three categories of hydrogen: (i) Renewable Hydrogen, produced by using electricity generated exclusively from renewable energy sources and without emitting a certain threshold of CO2/kg, which shall be set by ministerial order, (ii) Low-carbon Hydrogen, which has to meet the same CO2 emission threshold as renewable hydrogen but is not required to be produced using renewable energy sources and (iii) Carbonaceous Hydrogen, which refers to hydrogen that is neither renewable nor low carbon.
The most relevant difference between the French categories of hydrogen is that Renewable Hydrogen and Low-Carbon Hydrogen can use the French traceability system (cf. Section 2 below) and can benefit from French support payments (cf. Section 3 below). However, a ministerial order still needs to set the CO2 threshold for Renewable and Low Carbon Hydrogen.
The German Hydrogen strategy introduced a variety of hydrogen colours: (i) "green hydrogen" is derived from water electrolysis and using electricity from renewable sources, (ii) "blue hydrogen" is produced using carbon capture and storage technologies, (iii) "turquoise hydrogen" is produced via methane pyrolysis and (iv) "grey hydrogen" is based on the use of fossil hydrocarbons. However, so far, only "green hydrogen" found its way into German law. Due to an amendment in December 2020, the German Renewable Energy Act exempts Green Hydrogen production from certain surcharges (cf. Section 3 below). However, the law delegates the difficult task of precisely defining the criteria for Green Hydrogen back to the government. An ordinance published on May 19, 2021 sets out rather strict criteria. In essence, green hydrogen needs to be produced from renewable energy sources that are mostly located in Germany and that do not receive any subsidies. Furthermore, the electricity used for hydrogen production needs to be delivered via the same utility as the guarantees of origin for the renewable energy or, in case of delivery via a direct line, be consumed in the same 15-minute interval in which the renewable energy source produced the electricity. However, the German ordinance stresses that this is merely an interim solution, which is to be immediately aligned with requirements that might soon be set by the European Union. Furthermore, this strict and interim definition of "green hydrogen" so far only applies in the context of the German surcharge exemption (cf. Section 3 below), i.e., only in the context of one of possibly several German support schemes for hydrogen.
The German government already announced that it intends to use the time to coordinate its efforts with the EU and align the interim solutions that are already put in place. Both Governments may already take into account the CO2 thresholds for sustainable hydrogen recently published in the context of the so-called "EU taxonomy" regulation. This major EU initiative established a list of "environmentally sustainable" economic activities. It aims to provide appropriate definitions to investors, companies and policymakers on economic activities that can be considered environmentally sustainable.
In addition, a revision is ongoing in Brussels of the directive setting objectives and tools for renewable energy (so-called "RED II" directive). It will be key to determine what "renewable electricity" means for hydrogen producers. For instance, the latest proposals would require renewable (e.g. wind and solar) plants to meet strict conditions: They should be recent (less than 12 months old) and they may not benefit from State support. Many stakeholders are concerned the proposed definition will result in insufficient amounts of renewable electricity available for the development of clean hydrogen.
Therefore, there is currently a window for France and Germany to each decide on the technologies they want to support. It would be unrealistic to expect France and Germany to suddenly align their national energy strategies. That said, it should be possible to work towards common hydrogen terminologies so that France, Germany and the EU can use the same standardized wording. Aligning the definitions could facilitate a rapid ramp-up of sustainable hydrogen production. That way, companies on the ground and financial markets providing the necessary capital can easily understand what projects may be eligible for support payments and labelled as sustainable investments. For cross-border projects, such alignment may even be necessary.
In any case, definitions should remain consistent with the overall clean hydrogen production objectives, which are very ambitious. Being too strict may end up being counterproductive by excluding many projects and technologies. Realism and willingness to compromise will thus be needed.
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