IOGP Europe recommendations on the Delegated Act specifying a methodology for assessing GHG emissions savings from low-carbon fuels and low-carbon hydrogen

Clear and consistent rules on assessing GHG emissions savings from low-carbon fuels and low-carbon hydrogen can help to ramp-up low-carbon hydrogen production, develop a European market for hydrogen and facilitate the integration of hydrogen from renewable sources.

IOGP Europe recommends that the methodology for assessing GHG emissions savings from low-carbon fuels and low-carbon hydrogen should:

• Reward (use of) low-carbon fuels and hydrogen for their GHG emissions savings on the basis of a life-cycle analysis. The methodology should enable and reward industry using low-carbon hydrogen as a pathway to decarbonization.

• Be consistent in the methodology to assess GHG emissions across all types of fuels.
The methodology to assess GHG emissions savings for low-carbon fuels and low-carbon hydrogen should be consistent with the methodology for biofuels laid down in Directive 2018/2001 (part C of Annex V and part B of Annex VI) and the methodology for renewable fuels of non-biological origin and recycled carbon fuels specified in Delegated Act 2023/1185.

• Recognize carbon capture and geological storage (CCS) to produce low-carbon fuels and lowcarbon hydrogen, including CCS outside of the EU.
CCS outside of the EU should be reflected in the methodology to enable import of low-carbon hydrogen as well as EU produced low-carbon hydrogen where the CO2 is stored in neighboring countries, provided that rules equivalent to Directive 2009/31/EC apply to those CO2 storages.

• Reward innovations that reduce carbon intensities in the natural gas supply chain versus the fixed carbon intensity values in the table in part B of the Annex to DA 2023/1185.
Actual carbon intensities over the whole supply chain should be used where natural gas supplies more than half of the energy to produce low-carbon hydrogen since this qualifies as an incorporated process. Where this is not the case, or when actual carbon intensities cannot be established in a qualified and certifiable manner, the carbon intensity values in the table B of the Annex to DA 2023/1185 shall be used.

• Provide investors certainty that the minimum GHG savings threshold established in the Gas Directive will continue to apply for the project lifetime.
For investors in low-carbon production technology it is important to have certainty that the minimum GHG savings threshold will remain stable once an investment decision is made. The provisionally agreed Recast Gas Directive includes a provision by which the minimum GHG saving threshold for low carbon fuels could be increased in future. The minimum GHG savings threshold to qualify for low-carbon fuels and low-carbon hydrogen should continue to apply during the project lifetime, for installations that were built under this methodology. Any changes of threshold should apply only to projects for which investments decisions are made after the adoption of the changed threshold.

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