New emissions evaluation directive clears the playing field for the low carbon hydrogen industry in Europe
By on July 24, 2025
The European Commission has unveiled the Hydrogen and Gas Market Directive, completing the policy framework for the hydrogen sector on the European continent.
Honouring its commitment set out in the Renewable Energy Directive (RED) to create specific emissions evaluation for low carbon fuels such as hydrogen, the European Commission has unveiled the Hydrogen and Gas Market Directive. The new evaluation methodology, in addition to already existing ones on renewable hydrogen and renewable fuels of non-biological origin (RFNBOs), completes the EU’s hydrogen regulatory framework. This brings the much needed legal certainty and coherence for participants in the sector.
According to the new regulation, to be considered low carbon, hydrogen and related fuels will need to achieve at least 70% lower emissions relative to unabated fossil fuels. By using this criterion, the framework leaves open the hydrogen production method, with CCS-based and electrolytic hydrogen both being eligible.
The adoption of the new directive follows consultation with key stakeholders and the Member States. The Act will now be passed to the European Parliament and the Council for two months of scrutiny (extendable by an additional 2 months), leading to vote on the submitted proposals. The Parliament or Council have no mandate to amend the proposals.
The new directive provides a clear regulatory framework, unlocking investment certainty and accelerating the scale-up of clean hydrogen production across the European continent.
In 2026, the Commission plans to launch public consultations on a methodology focussing on the use of Power Purchase Agreements (PPAs) for nuclear energy, enhancing clarity in low-carbon hydrogen production from nuclear sources.
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.
Dan Jørgensen, EU Commissioner for Energy and Housing, in the European Commission’s official press release, 8 July 2025