France Hydrogène’s position on the use of industrial CO2 to produce e-fuels – DA28(5)
France Hydrogène welcomes warmly the adoption of both DA on RFNBOs, as regulatory certainty is crucial to unlock the final investment decisions in the sector. Nonetheless, in the Delegated Act from Article 28(5) of the Renewable Energy Directive 2018/2001, adopted on February 10, 2023, the European Commission prohibits, from 2041 onwards, to use CO2 stemming from industrial sources for the production of RFNBOS.
We warn that this provision will block many planned projects and will be counterproductive in climate terms, harming severely the decarbonization strategies of whole branches of industry without offering alternative solutions. The sunset clause in 2041 is equal to block all the major e-fuels projects production, whose the entry into service is planned by 2027-2030, and which require at least a 20-year period to amortize investments. At the same time, such a provision may put at risk the balanced approach of the European Commission between hydrogen domestic production and imports.
The French hydrogen industry shares the Commission’s issue to consider CCU with caution but reminds that the adoption of such very structuring measures must follow a strict impact assessment on the concrete existence (or not) of alternatives. It should notably take into account sectoral, geographical and temporal variables.
Therefore, France Hydrogène calls for setting two distinct grandfathering clauses for the use of CO2 from industrial sources, providing that the environmental benefit of each CCU solution has been checked on a case-by-case basis:
- One for the RFNBOs projects using unavoidable industrial CO2 and put into service before January 1st, 2037.
- And another one for the RFNBOs projects using other types of industrial CO2 (except from the combustion of fuels for electricity generation) and put into service before January 1st, 2032.
In the case where the above proposal wouldn’t be considered by the EC, given that DAs have been adopted, we strongly recommend replacing the strict prohibition to use industrial CO2 after 2040 by the possibility for the stakeholder to buy an amount of credit equivalent to 50% of the industrial CO2 used in the process. These credits would be sourced in the “market of carbon removal” that should be built following the adoption of the awaited Regulation establishing a Union certification framework for carbon removals (COD 2022/0394). A quick communication by the Commission on this issue would be crucial to restore EU stakeholders’ confidence.