Purchase obligation for green hydrogen

The requirement for member states to use green hydrogen (formally: RFNBO) by 2030 has been scaled down from the original 2021 proposal of the European Commission. The government intends to pass on the member state requirement to the hydrogen-using industry: this consists of the ‘purchase obligation’ and accompanying policies such as production and/or demand subsidies. A whole chain needs to be developed and scaled up, from production to use of RFNBO. The hydrogen market is currently in a start-up phase. Since there is no market as yet, very few concrete investment decisions have been made for RFNBO production or import, especially in the very short term. The uncertainty is filtering down the chain to buyers, who are also putting off investing because of lack of supply.

This uncertainty can be overcome by a well-designed purchase obligation plus accompanying policies and adequate boundary conditions, such that investment decisions in supply and purchase of RFNBO get off the ground. In this study, we examined the consequences of four policy packages and the ways in which the purchase obligation can be successfully implemented.


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