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Freshfields Sustainability

| 3 minutes read

The "Hydrogen Accelerator" – a key element of the Commission’s "REPowerEU Plan"

The Russian invasion of Ukraine continues to have a far reaching cross-sector effect throughout Europe, with the energy sector being no exception. In view of this development, on 18 May 2022 the Commission issued its communication “REPowerEU Plan” – a plan that aims to make the EU independent from Russian fuels. The plan is based on the outline presented by the Commission in March 2022. The so-called “Hydrogen Accelerator” is a key part of the REPowerEU Plan.

The Commission’s new hydrogen targets

The Commission aims to significantly boost the import and production of renewable hydrogen. In Fit for 55 – a major legislative overhaul as part of the EU’s Green Deal initiative – an initial 5,6 million tons/anno of renewable hydrogen by 2030 were agreed upon, which are now raised by an additional 14,4 million tons/anno with the REPowerEU approach. In total, REPowerEU sets a target of 10 million tons/anno of domestic renewable hydrogen production and 10 million tons/anno of renewable hydrogen imports from third countries by 2030. The domestically produced quantities will require electrolysis capacities of 120 GW by 2030. Regarding the 10 million tons of imported hydrogen, the Commission expect these quantities to come via three major corridors, namely the Mediterranean, the North Sea area and, as soon as conditions allow, via Ukraine. According to the Commission, 4 million tons of these quantities will be imported in the form of ammonia. The Commission assumes that the additional 14,4 million tons of hydrogen will allow for the replacement of 27 billion cubic metres (bcm) of imported Russian gas.

Instruments to achieve these new targets 

To help achieving these new targets, the Commission, in particular,

  • calls for adjusting some of the sub-targets of the draft revision of the Renewable Energy Directive II (REDII). The draft that had been published on 14 July 2021 provided that hydrogen from non-biological renewable fuels must account for 50 per cent of hydrogen consumption in the industrial sector by 2030. Now the Commission wants to raise this figure to 75 per cent. Likewise, the original draft provided that the share of non-biological renewable fuels in the transport sector must be at least 2.6 per cent in 2030. Under RePowerEU the Commission calls for 5 per cent (see our blog post);
  • calls for rapidly concluding the revision of the Hydrogen and Gas Market package (see our blog post)
  • will top up Horizon Europe investments on the Hydrogen Joint Undertaking to double the number of Hydrogen Valleys from 23 to 46 by 2025;
  • intends to complete the assessment of the first Important Projects of Common European Interest (IPCEI) on hydrogen by the summer thereby assessing State aid notification for such projects as a matter of priority;
  • calls on the industry to accelerate the work on missing hydrogen standards, in particular for hydrogen production, infrastructure and end-use appliances;
  • will map preliminary hydrogen infrastructure needs by March 2023, based on the TEN-E Regulation, in a process involving Member States, national regulatory authorities, ACER, ENTSOG, project promoters and other stakeholder;
  • will mobilise EU funding under Connecting Europe Facility (CEF), the Recovery and Resilience Facility (RRF); the InvestEU Programme, the Innovation Fund, the Life Programme and programmes under shared management such as European Regional Development Fund (ERDF), including Interreg, the Cohesion Fund, Modernisation Fund and Just Transition Fund; and
  • will set up a dedicated work stream on joint renewable hydrogen purchasing under the EU Energy Platform which will also be open to Ukraine, Moldova, Georgia and the Western Balkans.

It remains to be seen whether these instruments – combined with market-based incentives such as scarcity prices for natural gas – are sufficient to achieve the new targets.

Impact on investments

The Commission expects that the implementation of the REPowerEU Plan will trigger significant additional investments compared to the assumptions of the original fitfor55 proposal: according to the Commission, the hydrogen accelerator will require 500 TWh of additional power generation in 2030, thus giving rise to total investments in the range of EUR 335-471 billion. Furthermore, the Commission expects significant investments in hydrogen infrastructure, including EUR 50 – 75 billion for electrolysis, EUR 28 – 38 billion for EU-internal pipelines and EUR 6 – 11 billion for storage by 2030.


energy and natural resources, hydrogen, renewables