European Commission completes hydrogen framework with new low-carbon methodology

July 9, 2025, by Aida Čučuk

The European Commission has adopted a greenhouse gas (GHG) emission methodology for low-carbon hydrogen and fuels, as set out in the Hydrogen and Gas Market Directive, completing the European Union’s (EU’s) regulatory framework for hydrogen.

Courtesy of the European Commission / Photo by Mauro Bottaro

It is understood that this methodology complements the existing ones on renewable hydrogen and renewable fuels of non-biological origin (RFNBOs).

Low-carbon hydrogen is expected to support efforts to decarbonize sectors where electrification is currently not a viable option, such as aviation, shipping, and certain industrial processes.

To be considered low carbon, hydrogen and related fuels will need to reach a threshold of 70% GHG emission savings compared to the use of unabated fossil fuels, the Commission said, noting that this means that low-carbon hydrogen can be produced in various ways, for instance using natural gas with carbon capture, utilization and storage (CCUS) – a technology that prevents emissions from the process of producing hydrogen -, as well as from low-carbon electricity sources.

Looking ahead, the European Commission revealed it will assess the impact of the introduction of alternative pathways on the energy system and emission savings, and the need to maintain a level playing field with sourcing fully renewable electricity. In 2026, it will reportedly launch a public consultation on a draft methodology on the use of power purchase agreements (PPAs) for nuclear energy, enhancing clarity for the production of low-carbon hydrogen from direct nuclear sources.

This newly adopted Act is set to be transmitted to the European Parliament and the Council, which have two months to “scrutinize” it and either accept or reject the proposals. At their request, the “scrutiny” period can be extended by two months. As disclosed, the Parliament or Council cannot amend the proposals.

Dan Jørgensen, Commissioner for Energy and Housing, commented: “Hydrogen will play a key role in the decarbonisation of our economy. With a pragmatic definition of low-carbon hydrogen that respects the energy mix of all EU countries, we are providing the necessary certainty to investors. In this way, we support the growth of a sector which is key for both our competitiveness and our climate objectives.”

To note, this adoption follows a process of consultation with stakeholders and the Member States. A first draft of the Delegated Act was published for feedback from September 27 to October 25, 2024, and was then discussed with Member States twice, on November 7, 2024, and May 19, 2025.

It is worth mentioning that before the adoption of the Act, industry groups, representing the entire energy value chain, from producers to industrial users, clean tech solution providers, and infrastructure operators, called on the Commission to acknowledge their concerns with the draft defining the GHG methodology for low-carbon hydrogen and its derivatives, claiming that the legislation threatens the overall feasibility of this energy pathway.

Industry groups: EU’s draft GHG rules threaten feasibility of low-carbon hydrogen

Regulation & Policy

In other news, it is worth mentioning that the Commission launched the Hydrogen Mechanism under the EU Energy and Raw Materials Platform, aimed at supporting the market development of renewable and low-carbon hydrogen and its derivatives, including ammonia, methanol, and electro-based sustainable aviation fuel (e-SAF).