European Hydrogen Quota Increases, The Green Hydrogen Market Is About To Explode

Recently, the European Union issued new regulations, requiring that by 2030, the proportion of renewable hydrogen in industrial hydrogen demand will reach 42%. In order to meet the EU quota, the total production of renewable hydrogen will be between 2.1 million and 4.2 million tons. This regulation has aroused widespread concern in the industry. Green hydrogen suppliers not only need to deal with fierce market competition but also meet the renewable hydrogen production rules formulated by the European Union.

As early as February 2023, the EU passed the Renewable Energy Directive (RED II) and proposed detailed rules, clarifying the composition of renewable hydrogen in the EU. Among them, the European Commission proposed three standards to determine the eligibility of green hydrogen. Firstly, hydrogen is produced by direct connection of new renewable energy generation facilities through electrolyzers; secondly, hydrogen is produced by grid-supplied electricity in regions with a renewable energy ratio of more than 90%; Hydrogen is produced using grid-supplied electricity after a power purchase agreement.

According to regulations, when the electrolyzer and the renewable energy plant are located in the same area, and the renewable energy power generation facility is put into operation no earlier than 36 months before the electrolyzer is put into production, it can be directly connected to the renewable energy power generation facility for electrolytic hydrogen production. For regions where the average renewable electricity share in the grid exceeded 90% in the previous year, the hydrogen produced by electrolytic hydrogen production through grid electricity is also recognized as renewable hydrogen.

The new regulations also emphasize that renewable hydrogen should be produced using electricity generated by newly built renewable energy power plants to ensure that the installed capacity of renewable electricity in the grid increases and promotes sustainable development.

In addition, EU member states have also promoted the development of the green hydrogen industry. According to the strategic policy document issued by the European Commission in March this year, 30% of the global hydrogen energy investment has been concentrated in the EU. Recently, the Spanish government announced that it will allocate 100 million euros to accelerate the development of seven large-scale green hydrogen projects, striving to become a European green hydrogen supply center. At the same time, the German government also adopted a new version of the "National Hydrogen Energy Strategy", which once again emphasized the priority development of "green hydrogen".

The new regulations of the European Union have brought new opportunities for the renewable hydrogen industry, which will help promote the innovation and application of green hydrogen technology and make an important contribution to sustainable development.