Ambitious projects and investor money are chasing green hydrogen as a potential replacement for Russian oil and gas. But a large-scale pivot to the renewable energy source won’t come until a well-defined regulatory and legislative framework is in place — and early European Commission draft rules are far from promising.
Since Russia’s invasion of Ukraine in February, the European Union has moved quickly to plan its transition to renewable energy sources from Russian oil and gas. The 27-country block has approved a number of schemes to allow for a swifter energy transition and to increase targets that were previously set as part of its commitment to reach ‘Net Zero’ carbon emissions by 2050.
Several of those plans target green hydrogen as a promising fossil fuel replacement. But draft European Commission rules requiring green hydrogen plants to be fueled by newly built wind or solar farms could hamstring development of the nascent renewable energy source, according to a legal source, the CEO of energy producer RWE and Standard & Poor’s.
“Instead of accelerating the ramp-up of the hydrogen economy, the regulation puts unnecessary shackles on it,” RWE CEO Markus Krebber said in a May statement.
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