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European regulations need updating to reflect recent developments in the hydrogen sector

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The Spanish Hydrogen Association (AeH2) has recently presented the report on the regulatory treatment of projects incorporating hydrogen technologies. The study includes the recommendations of the two technical working groups launched by the AeH2, one of a regulatory nature, in which M&M Group has participated with the help of its head of Sustainability and Business Optimization, María José Marente, and another of an economic nature, which have been carried out after five months of work with more than 130 member entities.

The objective of the report is to serve as a starting point at national level to identify the regulation and standardization of the different phases involved in the use of hydrogen as an energy vector.

Thus, the Technical Regulation Working Group has carried out the identification of those cases that require a more exhaustive regulation, in terms of production, storage, logistics and applications understood as mobility. It should be noted that M&M Group is already working in the field of storage, since it is an expert company in the manufacture of metallic elementary structures, as Marente recalled. In addition, this same Group has identified potential legal barriers and has proposed a series of regulatory recommendations.

In this sense, the potential legal barriers that can contain the large-scale deployment of hydrogen production in our country have been identified. In addition, a series of recommendations have been made that can be summarized in the need to achieve a new regulatory framework that recognizes the complexity of hydrogen production through a non-exclusively industrial energy use, the production through electrolysis and the need to legislate according to the different production volumes; distinguishing between domestic, small or industrial activity, among other issues.

On the other hand, the Economic Regulation Working Group has presented as results the programs and aids for the financing of projects or installations, at European and state level, the obligation of the contracting authorities and the awarding entities as financing management modalities, general principles for the granting of financing and applicable regulations, and finally the review of the tax treatment of products, projects and/or installations.

As regards economic regulation, the Working Group has found that the tax treatment of green hydrogen is still at an incipient stage, but it is expected that renewable hydrogen will be given preferential treatment in accordance with its deployment as an economic vector of the future.

In addition, the European regulations in force are pending updating, needing to reflect the evolution experienced by the sector in recent times. Similarly, the report notes the lack of homogeneity at European level in the field of energy-environmental taxation, and a certain level of lack of coordination between the General Administration, the Autonomous Communities and local entities, resulting in an excessive tax plurality.

In turn, Spain has set itself the objective of carrying out a tax reform that will bring it closer to the rest of the EU countries in terms of environmental tax collection and provide clarity and coherence at national level, contributing to the established climate objectives. In this context, green hydrogen will enjoy a favorable tax treatment compared to natural gas, and according to the analysis carried out, in a first phase of support for the development and deployment of hydrogen-related technologies along the value chain, H2 projects and/or facilities will be encouraged through the financing of R&D and public investment in infrastructure, introducing subsidies, mainly in environmental taxation in the transport sector.

Javier Brey, president of AeH2, has assured that “establishing a hydrogen regulation will play a fundamental role at both European and national level in our sector. This will serve to remove barriers, set standards to achieve a regulation that helps to promote hydrogen technologies as a key axis for the energy transition. In short, it is about laying a solid foundation on the bases to be able to achieve the objectives that we believe are ideal for Spain, a country that will play a fundamental role in the energy future of the continent.”

Source: AEH2