France and Germany split over EU green hydrogen rules

New EU rules defining “green” hydrogen have intensified a long-running disagreement between France and Germany over how to treat nuclear energy as Europe seeks to reduce carbon emissions and move away from fossil fuels.

The framework, set out by the European Commission on Monday, allows hydrogen derived from electricity grids with high levels of nuclear power to be considered green as long as the producer buys a long-term contract for renewable energy equivalent to its consumption. The point of the rules is to ensure the hydrogen is not made with dirty fossil fuels and to incentivise investment into renewables.

The move is considered a victory for France, which has been pushing to have allowances for “low carbon” fuels added to several pieces of EU energy legislation in order to ensure its domestic nuclear industry can compete in the European market.

But the rules do not settle the matter of how France’s nuclear-generated electricity will be treated under future regulations, including the bloc’s revised renewable energy directive. Negotiations on this are still under way in Brussels and French officials have warned that the viability of a planned hydrogen pipeline from Spain through France to Germany, known as H2Med, could be undermined if nuclear power was not treated as “green” for hydrogen production.

“This [decision today] is particularly important for France,” a French energy ministry official said, adding that it represented “a victory” for the country’s energy minister Agnès Pannier-Runacher.

“It recognises the carbon-free nature of the French electricity mix in the calculation of renewable hydrogen objectives,” the official added.

Nuclear energy provides three-quarters of power production in France via a fleet of reactors built since the 1950s.

The Germans, whose economy ministry is led by Green party minister Robert Habeck, said they had a “clear position” on nuclear energy.

“Nuclear power is not renewable energy and hydrogen made from nuclear energy is not green hydrogen. This position is well known to everyone and it’s the position we’ll be taking into the discussions,” a spokesperson for the economy ministry said.

Under the new rules from Brussels, hydrogen producers in regions where the intensity of carbon emissions from electricity production are lower than 18g CO₂ equivalent per megajoule (18gCO₂eq/MJ) can take electricity from the grid and offset their consumption with a power purchase agreement for renewables. The only areas that currently qualified were France and northern Sweden, an EU official said.

Sweden generates around 45 per cent of its energy from hydropower and 40 per cent from nuclear.

“This is a huge win for France and to a lesser extent Sweden,” said one EU diplomat. “Germany’s concerns were not taken into account.”

“This is something being discussed on several files and needs a solution . . . It is a question of some countries wanting “low carbon” everywhere and some countries not wanting it at all,” said another diplomat.

Environmental campaigners have warned that the rules could result in more fossil fuels being burnt, because electrolysers would use up nuclear or renewable power otherwise destined for consumers. This demand would have to be met by fossil fuel generators instead.

“On paper you are producing nuclear electricity but in practice you are just moving your electricity from one sector to another and then the sector that does not have enough will call on more gas,” said Marta Lovisolo, policy adviser on renewable energy systems at climate NGO Bellona.

The definition of renewable hydrogen has been delayed by more than a year because of disagreements over how the consumption of hydrogen electrolysers should be counted.

European hydrogen producers have been putting pressure on the commission to set out the rules fearing an industrial exodus to the US, which announced $370bn in clean energy subsidies as part of the Inflation Reduction Act.

The commission has set a target for the EU to produce 10mn tonnes of hydrogen domestically by 2030, which would require electricity equivalent to 14 per cent of the bloc’s current annual consumption.