EU approves green hydrogen mandates; ASX-listed early mover Provaris Energy stands to benefit By Proactive Investors
Ushering in a surge in demand for green hydrogen, the 27 member countries of the European Union (EU) have finally approved the long-awaited Renewable Energy Directive, mandating the use of renewable hydrogen and its derivatives within the alliance.
Referred to as Renewable Fuels of Non-Biological Origin (RFNBOs), the EU will require 42% of hydrogen used in industries to be green by 2030, with this figure increasing to 60% by 2035.
Additionally, the directive stipulates that 1% of all transport fuel must be composed of RFNBOs by 2030.
Simultaneously, the council of EU ministers has endorsed the ReFuelEU Aviation directive, which mandates that 1.2% of all aviation fuel must be synthetic fuel derived from green hydrogen by 2030.
Instant demand
These directives will significantly impact the demand for green hydrogen, as some 9.7 million tonnes of grey hydrogen, obtained from unabated natural gas, are consumed annually in the EU, primarily in fertiliser and chemical production and oil refining.
Consequently, the directives create an immediate demand for roughly 4 million tonnes of green hydrogen in industry alone by the end of the decade.
Streamlining procedures
Moreover, the new directives aim to streamline permit procedures for renewable energy projects, allowing member states to establish areas where these projects undergo simplified and expedited permit granting processes.
This approach is akin to the strategy Germany adopted during the 2022 energy crisis to accelerate the development of natural gas import terminals for energy security.
These ambitious 2030 targets are expected to invigorate the renewable energy and hydrogen sectors while emphasising the importance of hydrogen generation and supply.
Early mover in green hydrogen
ASX-listed Provaris Energy Ltd (ASX:PV1, OTC:GBBLF) is uniquely positioned to supply Germany with its initial green hydrogen volumes.
The Norway-based company is developing a portfolio of integrated green hydrogen projects for the regional trade of Asia and Europe, leveraging its innovative compressed hydrogen bulk storage and carrier.
“The elevated, quantified 2030 ambitions will have a positive read across the renewable energy and hydrogen sectors and bring focus on the need for generation and supply of hydrogen to kick-start,” the company said.
Provaris’ business model is based on a simple yet efficient hydrogen production and transport, with the aim of establishing an early-mover advantage for the regional maritime trade of hydrogen.
READ: Provaris Energy seeks to be an early mover in developing integrated green hydrogen projects
Separately, in the United States, the Biden administration is anticipated to announce the recipients of the US$7 billion in federal grants to establish regional hydrogen hubs, Reuters reported, quoting sources familiar with the matter.
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The announcement will cap months of intense political wrangling among states, from California to Pennsylvania, vying for a share of the funds.
The grants are part of the US effort to produce 50 million metric tonnes of clean hydrogen fuel by 2050.
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