In this policy brief, we explore the challenges related to the environmental and economic sustainability of renewable hydrogen production and use. Building on the results from the Paris Agreement-compatible (PAC) scenario, we outline specific policy recommendations to guide the deployment of renewable hydrogen in Europe through different EU policy files.
Renewable hydrogen is set to play a role in the decarbonisation of industrial and transport applications where direct electrification is not possible. Stringent criteria must be adopted to ensure that renewable electricity used to produce hydrogen comes from additional renewable generation capacity and does not compete with the decarbonisation of the energy system.
By complementing renewables-based electrification, improved circularity and energy efficiency, and adoption of energy sufficiency, renewable hydrogen will play an ancillary role in the decarbonisation of the European energy system. Besides ensuring strict sustainability criteria, regulatory instrument and financial support must be strategically directed towards targeted and indispensable investments in no-regret hydrogen uses and a dedicated, small-scale hydrogen infrastructure.