EU mandates for renewable hydrogen use by 2030 are jeopardising the bloc's industrial competitiveness and the Netherlands' plans for implementing the rules are "really problematic", according to ExxonMobil.
EU rules are "essentially not helpful" as they suffer from design issues and further threaten the bloc's industrial competitiveness, ExxonMobil Low-Carbon Solutions' policy manager Bert de Backker told the Argus Clean Ammonia Europe Conference in Rotterdam today.
Under the EU's revised renewable energy directive (RED III), member states must ensure that 42pc of their industrial hydrogen use is renewable by 2030 and meet a 1pc quota for use of renewable hydrogen or derivatives in transport by then.
Some industry participants might view this as helpful for driving ahead renewable hydrogen uptake and production, de Backker said. But the rules were developed based on "wrong" cost assumptions for renewable hydrogen and are set to disadvantage European producers compared with imports, he said. Industries that are subject to the mandate will struggle because the rules do not apply to imported products such as steel and chemicals, he said.
The focus on renewable hydrogen only means the mandates are a "technology bias policy," according to de Backker.
In addition, placing the same obligations on each country ignores the geographical diversity across Europe where hydrogen use varies considerably between member states and some regions have much more favourable conditions for renewable hydrogen production than others, de Backker said.
The EU Emissions Trading System (ETS) and the carbon-border adjustment mechanism (CBAM) already provide a big incentive to switch to clean hydrogen use, he said.
Member states have until 21 May 2025 to transpose the EU rules into national laws and specify how they intend to meet the mandates.
But many member states are hesitant to transpose the rules, de Backker said. Industry participants at last week's European Hydrogen Week suggested that several member states could miss the May 2025 deadline.
This creates a lot of uncertainty and diverging implementation in different countries does not help the idea of a single market, de Backker said.
If "one or two" member states fail to implement the rules, the European Commission might launch an infringement procedure against them, de Backker said. But if the majority of countries do not follow the legislation, the commission is unlikely to do this, he said.
Pioneer problems
The Netherlands recently took on something of a pioneering role by laying out its plans in a draft law that was put forward for consultation.
The government is planning to introduce obligations for individual companies from 2026. It has yet to decide the level of the mandates, but is contemplating either 8pc or 24pc by 2030, partly depending on how EU peers are planning to reach the countrywide obligations.
The mandate plans are "really problematic" and jeopardise the competitiveness of Dutch industry, de Backker said.
Studies commissioned by the government for the lawmaking process pointed to the potential threat to industry, but while the government acknowledged this, it is still planning to go ahead with the obligations, he said.
ExxonMobil plans to reduce carbon emissions from its Dutch hydrogen production by capturing and sequestering CO2. This is an example of "real-life abatement" and could cut emissions by 60pc, de Backker said. "But now the government comes and tells us we still have to use green hydrogen," he said.
The focus should be on how emissions can best be abated and industry should decide what the best tools are for this, de Backker said.
The Dutch government is planning to exempt some of the country's ammonia production from the mandates, noting that the sector is at particular risk if forced to comply with higher obligations. The EU rules potentially provide some leeway for this, although the commission has not made clear exactly under which circumstances exemptions are possible — an approach which has led to confusion in the industry.
The commission has said in workshops that it will not clarify this further for now, de Backker said. It would only let member states know retroactively by the early 2030s whether their implementation of these specific rules for ammonia is appropriate. This is "a very strange situation" and "clearly the result of a messy political compromise", de Backker said.
