Carbon-Free Europe (CFE) welcomes the European Commission’s continued work on developing a robust methodology for assessing greenhouse gas (GHG) emissions savings from low-carbon fuels. However, excluding key low-carbon energy sources from this process risks diminishing the role hydrogen can play in the energy transition, and more broadly slowing the transition overall . To fully realise the true potential of low-carbon hydrogen production, it is critical that the methodology takes into account the role of these key low-carbon energy sources in hydrogen electrolysis, such as nuclear power, particularly through Power Purchase Agreements (PPAs) and Contracts for Differences (CfDs).
One of the key issues with the current draft is the reliance on the bidding region/national average emissions intensities when calculating the GHG emissions associated with electricity used for hydrogen production. This approach risks distorting the actual environmental impact of hydrogen production by failing to reflect the specific energy mix used in real-time. In particular, averaging emissions at the country level can obscure the contributions of clean energy sources like nuclear power, which may supply low-carbon electricity during times when renewable generation is unavailable or insufficient. Such a distortion toward a resource with significantly growing demand in the coming decades could significantly impact its supply and thus any energy transition opportunities related to it.
CFE’s energy systems modelling shows that clean hydrogen demand will grow 50x, with 4-5% of total final energy consumption by 2050 (see Figure 1). With that contribution, clean hydrogen has the potential to play a transformative role in decarbonising hard-to-abate sectors such as heavy industry and long-haul transport. However, the type of hydrogen supply—whether through steam reforming (grey hydrogen) or electrolysis (green/clean hydrogen)—makes a critical difference for emissions purposes. Our model foresees the use of grey hydrogen until 2045 (see Figure 2), and with that GHG emissions in the production of hydrogen. But to accelerate the transition to hydrogen produced via electrolysis, we must ensure the availability of sufficient clean electricity. This requires a commitment to supporting diverse low-carbon electricity sources, including nuclear, through mechanisms like PPAs. Electricity demand is growing everywhere and at a rapid pace, as the need to decarbonise our economy accelerates. Hence, the regulatory framework should reflect a pragmatic approach where all viable low-carbon energy sources are at our disposal. Doing otherwise significantly increases delivery risk as the EU prepares for a tripling of electricity demand across all sources (see Figure 3).
Additionally, excluding nuclear PPAs from the Delegated Act risks underestimating the contribution that nuclear power can make to the energy system. Nuclear energy provides a low-emissions, stable electricity source that can complement renewable generation, especially during periods of low renewable output. The current methodology misrepresents the true emissions reductions that nuclear power can achieve in low-carbon hydrogen production. To prevent an unfair penalty toward low-carbon hydrogen producers, and to fully account for the actual source of electricity, and secure the energy system, nuclear PPAs should be included in the low-carbon hydrogen definition before 2028.
Finally, to ensure that the EU’s hydrogen strategy is both effective and equitable, it is essential that the methodology for assessing GHG emissions savings represents a truly technology neutral approach that relies on all viable technologies. The EU’s climate targets and its broader decarbonisation strategy will require the scaling of multiple clean energy technologies in tandem (see Figure 2), and focusing solely on renewables for low-carbon fuels narrows the path to decarbonisation. By including nuclear PPAs in the low-carbon hydrogen definition and the emissions calculation framework, the EU can better support scaling of low-carbon fuels and ensure a competitive, secure, and cost-effective transition to net-zero.
Given the urgent need to meet the EU’s decarbonisation objectives, there is no time to delay the inclusion of nuclear PPAs in the current methodology. Long-term planning and significant investments are needed for nuclear facilities, so the sooner these PPAs are in place, the more effectively the EU can scale up hydrogen production. By acting now, the EU can ensure that the infrastructure and energy sources needed for hydrogen production are aligned with its long-term climate and energy security goals.
Recommendations for Adjusting the Delegated Act
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Explicit Inclusion of Nuclear PPAs: The Delegated Act should explicitly include nuclear PPAs for low-carbon hydrogen production, as nuclear power provides stable, low-emissions electricity that complements renewable energy.
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Technology-Neutral Approach: Ensure that all low-carbon energy sources, including nuclear, are recognised in the emissions calculation methodology, encouraging flexibility in achieving net-zero and enhancing energy security.
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Shift to Source-Specific Emissions: Move away from using national average emissions for hydrogen production, and instead, account for the actual electricity source to provide a more accurate and fair reflection of GHG savings.
Incorporating these recommendations would reflect the full spectrum of low-carbon energy options available. CFE emphasises the importance of including nuclear PPAs and adopting a technology neutral approach. By doing so, the EU can better support electricity growth and hydrogen production while maintaining its competitiveness in the global energy transition.
