Reaching Ireland’s green hydrogen potential

4th May 2023

As an island with extensive renewable electricity generation resources, Ireland should be favourably positioned to take advantage of the significant opportunities offered by green hydrogen production, storage, and usage in the decarbonisation of Ireland’s energy and transport system.

Many stakeholders comment that strong policy direction coupled with appropriate financial incentives are necessary to provide a springboard to the realisation of Ireland’s hydrogen potential.
We have examined the direction of some of the EU and Irish policies.

EU
The EU’s Green Deal outlines the EU’s objective to be the first climate neutral continent by 2050. As a core part of this objective, the EU Commission’s prioritisation of renewable and lowcarbon hydrogen development, particularly from wind and solar energy, is evident. A myriad of EU policy and legislative initiatives aim to support this prioritisation.

Promotion of renewable hydrogen
Over the last few years, the EU has adopted progressive policies and strategies to achieve the promotion
of renewable hydrogen. As a first building block, the EU Energy System Integration Strategy and the EU Hydrogen Strategy were published in 2020. The EU Commission has stated that it has implemented the full list of the twenty key actions identified in the EU Hydrogen Strategy.

These key actions aim to:

create a strong investment agenda;
boost demand in end-use sectors and scale up production to support production and demand;
design a framework for hydrogen infrastructure and market rules;
promote research and innovation in hydrogen technologies; and
create international dimensions to redesign EU energy partnerships with EU neighbours and international partners.

Implementation of EU Hydrogen Strategy
Implementation of the EU Hydrogen Strategy included measures such as:

development of an investment agenda through the European Clean Hydrogen Alliance which brings together industry, national and local authorities, civil
society, and others to achieve an ambitious deployment of hydrogen technologies;
advancing proposals for a European Hydrogen Bank to unlock the private investment in hydrogen value chains by connecting renewable energy supply to EU demands;
legislative proposal for a Net-Zero Industry Act to ratchet
up the manufacturing of clean technologies and creation of green jobs in the EU;
identification of further funding for hydrogen projects in the Clean Hydrogen Partnership and the EU Innovation Fund;
creation of funding tools such
as the hydrogen public funding compass to help finance hydrogen projects. The hydrogen public funding compass provides orientation to members of the European Clean Hydrogen Alliance with respect to funding opportunities for future investment opportunities in projects related
to the large-scale deployment
of renewable and low carbon hydrogen; and
proposal (as part of REPowerEU) of the “hydrogen accelerator” strategy which to seeks increase the deployment of renewable hydrogen and the uptake of hydrogen in hardto-decarbonise sectors.

Legislative framework for renewable hydrogen
The Fit for 55 legislative package includes a number of legislative proposals that aim to translate the European Hydrogen Strategy into a concrete European hydrogen policy and legal framework, including the Hydrogen and Gas Markets Decarbonisation Package. There are proposals for inclusion of mandatory subtargets for renewable hydrogen in industry and transport in a recast Renewable Electricity Directive.

The proposed Directive on Common Rules for Internal Markets in Renewables Gases and Hydrogen intends to create a common threshold/standard for the promotion of hydrogen production installations as well as certification schemes for renewable and low-carbon hydrogen. It also, along with the proposal for the Regulation on the Internal Markets for Hydrogen, includes proposals covering hydrogen infrastructure, access to hydrogen markets, and renewable gas market integrity.

In February 2023, the EU Commission proposed detailed rules to define what constitutes renewable hydrogen with the adoption of two Delegated Acts under the Renewable Energy Directive. The first defines under what conditions hydrogen and hydrogen-based fuels can be considered as renewable fuels and clarifies the principles for additionality, including production from renewable energy sources. The second delegated act provides a methodology for calculating life-cycle greenhouse gas emissions.

IRELAND

National Energy Security Framework

In April 2022, the Department of
the Environment, Climate and Communications (DECC) published the National Energy Security Framework. This framework document provided that the development of an integrated hydrogen strategy for Ireland is to
be prioritised in line with the Climate Action Plan and will include the possibility of setting clear national targets for hydrogen.

Climate Action Plan 2023
Published by DECC in December 2022, the Climate Action Plan 2023 outlines several key milestones and actions in the context of renewable hydrogen. These include:

a target of 2GW of offshore wind for green hydrogen by 2030;
at least 2.1TWh consumption of zero emission gas by 2030; and
zero emission gas fired generation from biomethane and hydrogen by 2030.

A supplementary annex of actions published in March 2023 provided specific actions required to implement the targets set out in the Climate Action Plan 2023.
The Climate Action Plan 2023 aims to deliver a National Biomethane Strategy and a policy/regulatory roadmap for green hydrogen use – both to be delivered in 2023. In addition, there is an action to introduce a Renewable Heat Obligation Scheme by 2024 to incentivise suppliers of all fuels in the heat sector to ensure that a certain proportion of the energy supplied is renewable.

Hydrogen strategy consultation
In July 2022, DECC published its Consultation on Developing a Hydrogen Strategy to invite discussions on the potential role and opportunities for green hydrogen. Key questions asked of stakeholders in order to develop the hydrogen strategy related to priorities

for hydrogen research, demand and end-uses, supply, transportation and storage, export opportunities, safety, necessary support measures to be taken, and energy security questions. The consultation period has now closed, and the outcome is expected shortly. The hydrogen strategy will outline the pathways towards the production of green hydrogen in Ireland and set out a holistic overview of hydrogen supply and demand, transportation, and its use in Ireland’s energy mix in the period to 2030 and beyond.

Gas Networks Ireland

Gas Networks Ireland recently completed its Network Innovation Centre where they are developing a detailed hydrogen technical strategy to ensure that the existing gas network is capable of safely transporting
and storing both blended and 100 per cent hydrogen into the future. Another important step in hydrogen development over the last year was the appointment (pursuant to Statutory Instrument No. 350 of 2022) of Gas Networks Ireland as the body responsible for issuing guarantees of origin for renewable gases which are to be administered in a yet-tobe-published supervisory framework established by the Commission for the Regulation of Utilities.

A&L Goodbody was pleased to advise Energia on its partnership
with Translink to supply hydrogen from one of Energia’s windfarms in Northern Ireland, to fuel public buses in Belfast. Let us hope that is one of many hydrogen production and offtake transactions on the island of Ireland in the near future.

Ross Moore, Partner and Head of Energy, Infrastructure & Natural Resources, A&L Goodbody
E: rmoore@algoodbody.com
W: www.algoodbody.com