News
13 August 2025

Low Carbon Hydrogen

The European Commission has now formally adopted its long-awaited Delegated Act laying out the methodology for assessing greenhouse gas (GHG) savings from low-carbon fuels. The text was published on 8 July, kickstarting the co-legislator’s scrutiny process in the Parliament and Council. Importantly, these rules complete the EU’s regulatory framework for hydrogen.

The final rules come after months of debate around leaked drafts and intense pressure from Member States, Members of the European Parliament and NGOs and industry alike.

The text introduces several material clarifications and adjustments compared to the previous draft, particularly regarding methane emissions, differentiation of pipeline and LNG, and electricity-related accounting.

 

KEY ELEMENTS

Overall, Low-carbon Hydrogen is defined as that which achieves a 70% GHG emission reduction against a fossil fuel comparator set at 94gCO2e/MJ (as with the RFNBO rules). Low-carbon hydrogen should therefore not result in greater than 65.8gCO2e/MJ across the full production lifecycle.

 Nuclear electricity:

  • Recognition of nuclear-based hydrogen remains unchanged in the final text, since the previous draft introduced a concession to the nuclear lobby.
  • As Article 3 outlines that by 1 July 2028 the Commission will have assessed how to recognise low-carbon electricity from nuclear (PPAs), the final text retains a Recital from the previous draft offering that by 30 June 2026 the Commission should open a public consultation on a draft methodology for this.

Methane emissions:

  • Until the methodology for calculating methane intensity at the production level is made available by the Commission (by 5 August 2027), producers will be able to report emissions based on actual data (in accordance with methodologies such as OGMP 2.0) or using default emission values.
  • Previous drafts introduced a penalty for producers where (eventually when actual values are being used) no reported values for upstream methane emissions are made available. The penalty in this case would have amounted to the previous default values +40%.
  • The final text, however, removes this penalty.
  • Default emission values have been slightly adjusted for natural gas in this text (from 5.4 to 4.9 gCO₂eq/MJ for CO₂, while slightly increasing the CH4 value), encouraging reporting of actual project values. Although, a distinction is now made between pipeline and LNG (assigning additional and higher values to LNG to reflect emissions from liquefaction, transport and regasification).
  • On the other hand, the default value for natural gas has been increased in this text, pushing low carbon hydrogen producers to report actual values and avoid an increased default value +40%.

Electricity emissions:

  • Grid-based emission intensity values in Member States have been updated in the final text to include a range from 2019-2023 figures (while the previous draft included only 2022 figures).
    • Based on the Commission’s data provided in Annex, 6 Member States’ grids would facilitate low carbon hydrogen production: Denmark, Finland, France, Lithuania, Portugal and Sweden.
  • The three existing options for calculating GHG intensity of electricity used in LCF production (default average, full-load hours, or marginal unit) remain.
  • As first introduced in a previous draft, the final text formalizes the possibility of a fourth method: using hourly average grid emissions based on the day-ahead market.
  • Net trade of electricity: when calculating carbon intensity of national electricity production, net yearly imports from other countries will need to be taken into account. This can be an advantage for countries who import large volumes of renewable electricity, thus reducing their default carbon intensity.
  • Additionally, by 1 July 2028, the Commission will assess whether to introduce country or region-specific default emission values for gas to produce blue hydrogen.

 CCUS:

  • The final text clarifies that as regards CO2, emissions are not counted if they are " permanently chemically bound in long-lasting products". This list of products has been defined in an ETS Delegated Act:
  • Mineral carbonates used in the following construction products:
    • carbonated aggregates used unbound or bound in mineral based construction products
    • carbonated constituents of cement, lime, or other hydraulic binders used in construction products
    • carbonated concrete, including precast blocks, pavers or aerated concrete
    • carbonated bricks, tiles, or other masonry units

 

NEXT STEPS

  • The Delegated Act was adopted by the Commission on 8 July 2025.
  • This kickstarted a two-month scrutiny period in the European Parliament and Council (extendable by an additional two months upon request).
  • However, the European Parliament has requested and been granted a 2-month extension to scrutinize the Low Carbon Fuels Delegated Act. The Parliament deemed the standard 2-month scrutiny period too short to reach a position, and will therefore have until 10 November to formally object to the Act before it enters into force.
  • If no objections are raised by either institution, the Regulation will enter into force 20 days following its publication in the Official Journal.
  • The Regulation will then apply directly in all Member States.
  • As with the RFNBO framework, it will then be up to the Commission to recognize certain voluntary certification schemes.

If either the Council or Parliament object before the scrutiny period lapses, the Delegated Act will not enter into force. It remains rare for this to happen (historically-speaking), and the majority thresholds to object to Delegated Acts are higher. In the Parliament, an absolute majority is required to object (361 votes), while in the Council, a reinforced majority is required (representing 72% of Member States and 65% of the EU population).