Renewable hydrogen in the EU: a framework under pressure

Considering recent calls for action from both the Directors-General of Member States and undertakings on this topic, the question has arisen whether this energy architecture is fit for the market it was meant to create. Many of these criticisms are tied to the legal qualification of renewable hydrogen and the speed at which the framework is and can be implemented. This blog will therefore briefly describe the legal definition of ‘renewable hydrogen’, highlight the criticisms that have been raised, and review the effectiveness of the amendments to the framework proposed.

What counts as green? The RFNBO definition

Renewable hydrogen, produced by splitting water using renewable electricity, sits at the heart of the EU's decarbonisation and REPowerEU strategy. The legal definition of renewable fuels of non-biological origin (RFNBOs), of which renewable hydrogen is the principal example, is not merely a technical matter but determines market access, funding eligibility and compliance with mandatory sectoral quotas.

To provide regulatory certainty to investors, the European Commission (the Commission) adopted two delegated acts in June 2023. One of the two acts, namely the Commission Delegated Regulation (EU) 2023/1184 (the Delegated Act on Additionality), establishes the conditions under which hydrogen and its derivatives qualify as RFNBOs. The act applies equally to domestic producers and to third-country producers exporting renewable hydrogen to the EU.

Under the Delegated Act on Additionality, the question of whether hydrogen qualifies as "green" depends on whether the electricity used to produce it is genuinely renewable. This renewable electricity may be supplied by an installation that is directly connected to the installation (typically an electrolyser) or may come directly from the grid. For the latter type, Article 4 of the act establishes a tiered hierarchy of ways through which grid electricity may be counted as fully renewable: 

• Exceeding 90%: For producers in a bidding zone where the average proportion of renewable electricity exceeded 90% in the previous calendar year (Article 4(1)), grid electricity may be counted as fully renewable up to a maximum number of hours derived from that zone’s renewable share. As of 2023, only bidding zones in Sweden qualify.
• Below 18 gCO2eq/MJ: Where the 90% threshold is not met, producers in bidding zones where the emission intensity of grid electricity falls below 18 gCO2eq/MJ (Article 4(2)). In those zones, electricity may be counted as fully renewable provided the producer has concluded a power purchase agreement (PPA) with a renewable electricity producer and satisfies the conditions on temporal and geographical correlation (see below).
• Imbalance settlement period: Producers can count electricity as fully renewable where it is consumed during an imbalance settlement period in which the national transmission system operator can demonstrate that renewable installations were curtailed (redispatched downwards) and that the hydrogen production correspondingly reduced the need for that redispatching (Article 4(3)). 

Only where none of these three pathways applies does Article 4(4) require compliance with all three cumulative criteria of additionality, temporal correlation and geographical correlation: 

• Additionality: Simply said, hydrogen producers must prove that the renewable electricity used comes from "additional" sources to avoid increasing fossil fuel demand elsewhere. As part of this, hydrogen producers must conclude PPAs with new renewable electricity generation capacity. The renewable installation must also have come into operation no more than 36 months before the electrolyser and must not have received government support in the form of operating or investment aid.
• Temporal correlation: Until 31 December 2029, a monthly matching rule applies: hydrogen output must correspond to renewable generation within the same calendar month. From 1 January 2030, this tightens to hourly matching. In practice, "matching" means that for every unit of hydrogen claimed as renewable, the producer must demonstrate that a corresponding volume of renewable electricity was generated within the same time window, initially the same calendar month, and from 2030 the same hour. The shift to hourly matching is operationally significant, as it requires producers to demonstrate that hydrogen is produced at the precise moment the associated renewable power is being generated.
• Geographical correlation: The renewable electricity facility and the hydrogen production facility must be located in the same bidding zone or in directly connected zones with comparable market conditions. A bidding zone is the largest geographical area within which market participants can trade electricity without internal capacity allocation, meaning that a single wholesale price applies throughout the zone. Bidding zones often coincide with national borders, although several Member States, including Sweden, Italy and Denmark, are divided into multiple zones.

The Delegated Act on Additionality includes a significant transitional arrangement for early movers. The additionality requirements (including both the 36-month rule and the prohibition on operating aid or investment aid) do not apply until 1 January 2038 to installations that come into operation before 1 January 2028. This exemption window reduces the compliance burden for first-generation projects. The transitional phase does not, however, extend to capacity added after 1 January 2028, even where it is added to an installation otherwise within the transitional regime.

The market reality: stuck in planning, not in production

While the Delegated Act on Additionality entered into force over two years ago (in July 2023), current projections of renewable hydrogen production suggest that the EU is far from reaching the 2030 targets established in the REPowerEU Plan. Industry voices have grown increasingly vocal in response to the speed (or rather the lack thereof) of these developments.

Part of the problem is that producing renewable hydrogen is costly, and that money has to be earned back through long-term offtake; offtake at scale requires investment, which in turn requires sufficient supply at competitive prices; and the strict RFNBO criteria make competitive supply difficult to achieve in the short term. The market, in other words, is struggling to get off the ground.

Those concerns were expressed in a joint letter to the Commission signed in late March 2026 by the Directors-General of the energy ministries of Germany, Spain, the Netherlands and Austria, and the State Secretary for Climate and Environment of Poland (together, the Directors-General), drawing attention to the challenges being faced regarding implementation of the criteria laid down in the Additionality Delegated Act. They argue that the current framework does not align with the economic realities of the hydrogen market development in the EU and worldwide. The letter points to investment decisions being delayed, many projects remaining stuck in the planning phase or being cancelled, and long-term offtake agreements failing to materialise despite national and EU funding support and binding quotas. The letter also notes that the predicted cost reductions for electrolyser production and installation have not materialised and costs are in fact still rising, while the cost gap between renewable hydrogen and fossil-based alternatives has widened. This call from the Directors-General follows a similar appeal made in October 2025 by Europe's leading electrolyser original equipment manufacturers (OEMs), who in a letter addressed to the Commission President argued that overly rigid rules on additionality, spatial and temporal correlation are stalling projects, causing cancellations, and putting Europe at risk of missing its hydrogen deployment targets (see press release).

Notably, not all stakeholders share this sentiment. A coalition of non-governmental organisations (NGOs) and a number of industry signatories (including Transport & Environment and Bellona Europa, who coordinated a February 2026 joint letter) (the NGO coalition) has urged the EU to maintain the current rules, arguing that they ensure green hydrogen production does not redirect renewable electricity away from the grid, and warning that an early review could erode the trust and investment appetite of market parties already operating under the current framework. The NGO coalition's concern regarding regulatory continuity finds a partial echo in the Directors-General’ letter, which explicitly requests that any revision include legal safeguards for early investments taken, in order to ensure predictability and continued bankability for first-movers.

The Directors-General letter also calls on the Commission to bring forward its review of the Additionality Delegated Act and finalise it in 2026, rather than waiting for the scheduled 2028 assessment. It requests a focused, evidence-based revision, without amending the act in its entirety, so as to avoid prolonged regulatory uncertainty and proposes three targeted adjustments.

The proposed adjustments: the debate

1. Additionality (Article 11): extended transitional period until 2035, with grandfathering for up to ten years beyond that (until 2040).

This is the most consequential of the three requests. As mentioned above, this criterion implies that hydrogen producers are required to source electricity from new, unsubsidised renewable capacity. Extending the transitional period and thereby extending the eligibility window for entering the transitional regime (moving the cut-off date from 1 January 2028 to 1 January 2035), will allow producers to draw on a broader pool of existing renewable energy for a further seven years.

In contrast, the NGO coalition cautions that relaxing additionality risks undermining the climate benefits of the energy carrier. In addition, amending this framework generally raises the concern of legal ambiguity for projects already planned under the current rules. The Directors-General have themselves acknowledged this tension, calling for legal safeguards to ensure that the revised framework does not undermine the bankability of projects committed to on the basis of the current rules, as discussed above in the context of first-movers. 

The ten-year grandfathering window extending to 2040 would mean that installations which come into operation before the 2035 cut-off date would remain subject to the rules in force at that time, even after those rules are tightened or replaced for new entrants. This is, at face value, a significant long-term commitment, and its compatibility with the EU's broader climate trajectory warrants careful assessment.

2. Temporal correlation (Article 6(2)): monthly correlation retained until 2035 for Member States with relatively clean electricity systems, treating the EU as a single region for this purpose.

The Directors-General propose that monthly rather than hourly matching should remain available beyond 2030, with the EU treated as a single region for the purposes of assessing the 'cleanliness' of the electricity system.

Hydrogen Europe has argued that the impact of switching from monthly to hourly matching is expected to be profound, as electrolyser demand must be matched to renewable variability. In addition, opponents of the proposed extension argue that monthly matching does not provide sufficient assurance that hydrogen is produced from genuinely available renewable electricity. In this regard, extending monthly matching to 2035 means the transition to hourly matching may be further slowed or postponed.

This proposal also raises questions of legal design: it would require defining what counts as a "clean" electricity system, risks fragmenting the internal market by applying different rules to different Member States, and leaves unclear what "treating the EU as one whole region" is meant to add.

3. The general exemption threshold (Article 4(1)): an assessment by the Commission of whether lowering the 90% threshold for grids with a very high share of renewables would better serve the objectives of the Additionality Delegated Act.

In essence, this amendment concerns the gateway to the simplified regime. Under the current rules, hydrogen producers in a bidding zone qualify for the exemption from additionality, temporal and geographical correlation only if that zone's renewable electricity share exceeds 90%; a high bar that today only Sweden clears. Lowering the threshold at which a bidding zone qualifies for the general exemption would allow a greater number of Member States to benefit from the simplified regime, expanding the addressable market particularly in countries with rapidly growing renewable shares.

The Directors-Generals position is convincing, provided the revised threshold is set at a level (and accompanied by monitoring requirements) that genuinely reflects a clean electricity system. 

The permitting wall: where EU ambition intersects with national administrative law

The three proposals by the Directors-General address the rules on paper, but a parallel constraint operates on the ground. Regulatory reform at EU level will only go so far if projects cannot be built on the ground. And building takes permits.

Planning and construction of renewable electricity installations and RFNBO production facilities are regularly subject to significant delays, notwithstanding their intended simultaneous commissioning, which is precisely what the additionality requirement presupposes. In practice, permit procedures currently often exceed statutory timelines due to their complexity and the time-consuming coordination required between the competent permit authority and its advisory bodies.

This is not a challenge unique to the hydrogen sector, but it is a particularly acute one in this context, given the pressing global energy crisis. A concrete example is that the additionality requirement links the electrolyser and the renewable installation within a strict 36-month commissioning window. When permitting delays push back the commissioning of the renewable installation, even by a short period (e.g. within 37 months instead of 36), the viability of the entire project can be called into question. Tighter statutory timelines and more structured coordination between national permit authorities and advisory bodies would provide greater legal certainty for market parties in making investment decisions and meeting construction schedules. The current EU regime does not provide a tailored solution for this, for instance in the form of an exception or extension in the case of force majeure or minor delays.

What comes next

Pressure on the Commission to act has now translated into formal action. On 22 April 2026, the Commission confirmed that it will propose a targeted review in the second quarter of 2026, ahead of the 2028 review and as requested by the Directors-General in their letter. A consultation will follow, allowing industry players and other stakeholders to contribute to the re-evaluation of the criteria. This was confirmed as part of the Commission's 'AccelerateEU' Communication which presents both short term and longer-term measures to further reduce dependency on volatile fossil fuel markets and build Europe's resilience against future risks based on homegrown clean energy and electrification. 

At the national level, the Dutch government has separately taken steps through its National Agenda for Underground Hydrogen Storage (Nationale Agenda Ondergrondse Waterstofopslag), published in July 2025, which identifies unclear regulatory frameworks as a primary barrier to the development of hydrogen storage in salt caverns and depleted gas fields, and commits to revising the Mining Act (Mijnbouwwet) and accelerating the associated permit procedures. These are positive steps in the context of hydrogen storage infrastructure, though the permitting bottlenecks that arise at the level of renewable generation capacity and electrolyser may warrant more specific (and their own) investigations and measures.

Overall, the steps at national level and the EU review and consultation that will shortly take place offer an opportunity to recalibrate the framework in light of market realities without abandoning the core principle: that hydrogen classified as "renewable" should be verifiably so. How the Commission balances that principle against the commercial pressures bearing on it from multiple directions will shape the trajectory of the EU's hydrogen market through the end of the decade.