Industry associations call on EU to refine low-carbon fuels certification draft

Industry associations, including Methanol Institute, Europex and Hydrogen Europe, have called on the European Union (EU) to refine the Low-Carbon Fuels Delegated Act to make it “effective, inclusive and fully aligned” with Europe’s energy and climate goals.

In a joint statement, the associations called for “greater transparency, fair market practices and strong traceability systems to support renewable energy growth without creating unnecessary burdens for economic operators.”

The industry players welcomed the intention of the European Commission to define the necessary elements for the certification of low-carbon fuels in order to support a clear regulatory framework but also expressed concerns about several aspects of the Delegated Act.

Methanol Institute and others consider it necessary to include in the Delegated Act the possibility to recognize and provide adequate proof of better performance of individual projects, at each step of the production process, for all types of GHG.

“Opening the possibility to showcase actual better performance will foster innovation and encourage overall emissions reduction. The calculation of the GHG intensity of the fuel should happen as an average of monthly, or more granular, intervals,” the associations noted.

The co-signatories also stressed the importance of considering the technical maturity and availability of hydrogen leakage detection technologies, welcomed the intention to create a link with the RED Union Database and encouraged the European Commission to ensure that the traceability provisions defined for renewable gases are also applicable to low-carbon gases.

In addition, the parties underlined the need to ensure regulatory certainty and clarity for project developers whose timelines extend beyond the already foreseen 2030 review of the Delegated Act. For projects launched before this review, the co-signatories consider as essential to maintain stable regulatory requirements during their operating lifetime, which may extend beyond the review.

The establishment of collaborative stakeholders’ dialogue and forum was also encouraged, with associations stating that they stand ready to provide further input into the draft.

To note, the co-signatories of this letter represent project developers, producers, infrastructure operators, market stakeholders and users of low-carbon fuels, including low-carbon hydrogen and its derivatives.

Low-carbon fuels are produced from non-renewable energy sources and are said to meet a GHG emissions reduction threshold of 70%. They include notably low-carbon hydrogen and its derivatives and can be produced from various energy inputs and via different production pathways such as low-carbon electricity or natural gas with CCUS.

The European Commission launched a call for feedback on the certification draft which clarifies the methodology for evaluating the emission savings of low-carbon hydrogen and fuels in September 2024.

At that time, it also published the final terms and conditions (T&Cs) for its second auction for the production of renewable hydrogen (IF24 Auction), via the Innovation Fund. This auction, a key pillar of the European Hydrogen Bank (EHB), provides financial support to producers of hydrogen categorized as a renewable fuel of non-biological origin (RFNBO).