Issue link: https://digital.shearman.com/i/1425143
3 0 INSIGHTS 04 Future Developments The EC is yet to determine the methodologies for calculating direct and indirect emissions. It remains to be seen how emissions associated with the production of hydrogen used in the supply chain of CBAM products (e.g., ammonia or green steel) will be assessed under the CBAM. Given that EU producers of such products will be required to use 50 percent of RED II-compliant hydrogen in their production, will the CBAM extend the same requirement to non-European producers? Failing to do so would put European producers at a disadvantage compared to non-European producers exporting to Europe and so may be politically unpalatable. OTHER FIT FOR 55 INITIATIVES Fit for 55 includes other initiatives which may stimulate wider adoption of hydrogen: e.g., the FuelEU Maritime and ReFuelEU Aviation proposals aim to decarbonize the fuel mix for shipping and aviation respectively. The EC proposes that European Member States should install hydrogen refuelling stations at intervals of max. 150km (under the Alternative Fuels Infrastructure Regulation ("AFIR") and offer preferential tax treatment for the use of clean hydrogen (in the revisions to the Energy Taxation Directive). HYDROGEN AND DECARBONISED GAS MARKET PACKAGE (Q4 2021) The EC is preparing revisions to the Gas Directive and the Gas Regulation, following a public consultation earlier in 2021. The aim of these revisions is to ensure that European gas regulation is suitable for the transition to renewable and low-carbon gases and to prepare the gas system for a phase-out of unabated fossil gases. The revisions will also contemplate more integrated infrastructure planning as well as making provisions for hydrogen imports. CONCLUSIONS As part of our work on the world's largest green and blue hydrogen / ammonia projects, we are experienced in guiding clients through the complex and evolving regulatory landscape applicable to hydrogen and energy transition in Europe. With this deep understanding, we can help you structure your projects to optimize the opportunities presented by this interconnected regulatory matrix, allowing you to benefit from the up-side available to appropriately structured projects within the European regulatory regime. Hydrogen Economy: Roadmap of European Regulatory Developments