Low carbon fuels and hydrogen – new EC methodology

The European Commission has published a delegated regulation outlining a methodology for assessing greenhouse gas emission reductions from low-carbon fuels, following obligations enshrined in Directive (EU) 2024/1788 of the European Parliament and of the Council of June 13, 2024 on common rules for the internal markets in renewable gas, natural gas and hydrogen.

According to Article 9 of the directive, the European Commission was required to adopt the methodology no later than August 5, 2025. It will complement existing methodologies for renewable hydrogen and non-biological renewable fuels and the EU regulatory framework.

What was the consultation on the adopted regulation like?

The adoption of the delegated act on low-carbon hydrogen and fuels methodology follows an intensive consultation process with stakeholders and member states. A first draft was published for feedback by October 25, 2024. The delegated act was then discussed twice with experts from Member States at the Renewable and Low Carbon Fuels Expert Group on November 7, 2024 and May 19, 2025.

What is the significance of the methodology for low-carbon hydrogen and fuels?

In accordance with its adopted goals, the EU is aiming to achieve climate neutrality by 2050, we wrote in detail on this topic in a previous article: Climate target for 2040 and path toward climate neutrality by 2050. In particular, ongoing activities are planned to support a competitive and sustainable economy in which hydrogen is a strategic sector. Low-carbon hydrogen is an essential component of efforts to decarbonize sectors where electrification is currently unrealistic, such as aviation, shipping and certain industrial processes. The adopted methodology for low-carbon hydrogen and fuels will contribute to the EU’s goal of climate neutrality by 2050, while ensuring the continued leadership and competitiveness of the European hydrogen sector and European industry.

Low carbon hydrogen

For hydrogen and related fuels to be considered low-carbon, they will have to meet a threshold of 70 percent reduction in greenhouse gas emissions compared to the use of unabated fossil fuels. This means that low-carbon hydrogen can be produced in a variety of ways, such as using natural gas with carbon capture, utilization and storage (CCUS), a technology that prevents emissions from the hydrogen production process, as well as low-carbon electricity sources.

The methodology set forth in the delegated act uses a life-cycle approach that takes into account all emissions associated with production and use, including from extraction, production, transportation and use. The methodology also takes into account methane emissions and actual_CO2 capture rates. It recognizes the diversity of energy mixes in member states, opening up different pathways for low-carbon hydrogen production. The delegated act does not specify the share of renewable energy that can be considered for hydrogen produced from electricity. This aspect is described in the Renewable Energy Directive, adopting an annual average approach. The Commission is ready to address this topic during the revision of the Renewable Energy Directive.

The low-carbon fuel provisions in the delegated act will apply to both domestic and non-EU producers who want to export hydrogen to the EU. For certification, manufacturers can rely on a well-established system. They are granted by international companies with more than a decade of experience around the world.

When will these regulations take effect?

Once adopted, the delegated act will be submitted to the European Parliament and the Council. They will have two months, with the possibility of extending for another two at the request of the co-legislators, to approve or object to the delegated act. If the document passes the scrutiny of the European Parliament and the Council, it will enter into force and become effective 20 days after its publication in the Official Journal of the European Union.

What actions to develop the low-carbon hydrogen and fuel sector does the EC plan to implement in the future?

In the future, the European Commission will assess the impact of alternative pathways on the energy system and emissions savings, and the need to maintain a level playing field in the procurement of fully renewable electricity. In 2026, it will launch a public consultation on a draft methodology for applying power purchase agreements to nuclear power, increasing transparency in the production of low-carbon hydrogen from direct nuclear sources.