New EU rules for Low-Carbon Hydrogen
The anticipated Delegated Act setting out the methodology to calculate the greenhouse gas emission savings from low carbon fuels has been approved by the European Parliament and the Council of the EU, and it has been published in the Official Journal of the European Union on the 21st of November 2025. The timeline for publishing the Delegated Act has been prolonged because the Member States were not in agreement regarding the contents of the Delegated Act. Furthermore, the European Parliament and the Council of the EU used the opportunity to extend the approval time by two months, prolonging the approval from July to November. The Delegated Act complements the rules set out in the Hydrogen and Gas Market Package, and it will enter into force 20 days after it has been published in the Official Journal of the European Union.
Policy framework
The Delegated Act is a part of a legislative framework targeted at creating a market for sustainable fuels to be used in transportation and industry.
To understand the role of low-carbon fuels in the energy transition, it is necessary to give a short insight into renewable fuels. The European Union has already pushed for the market uptake of renewable fuels by setting out policies – namely the Renewable Energy Directive 2018/2001 (RED III) – to enable renewable fuels to enter the markets and decarbonize so-called hard-to-abate-sectors, such as maritime transport, aviation, and industry. The Commission has set out targets for the use of renewable fuels of non-biological origin (RFNBOs) in different sectors. Two delegated acts were published in 2023, setting out quite strict rules for what can be considered as an RFNBO.
Subsequently, in June 2024, the European Commission enacted the Hydrogen and Gas Market Package, consisting of a Directive (2024/1788) and a Regulation (2024/1789), to facilitate the penetration of both renewable and low-carbon gas and hydrogen into the energy system. Although renewable hydrogen is the most compatible with climate targets of the EU, its production is likely not scaled up fast enough to meet the expected demand in the Union. Consequently, low-carbon fuels are crucial for the energy transition, especially in the short- to medium-term.
The new Delegated Act (2025/2359) accepted in November 2025 supplements the Directive 2024/1788 by specifying the methodology for assessing the greenhouse gas savings of low-carbon fuels – essentially setting the rules for what can be considered a low-carbon fuel, which is essential for investments. Unlike RFNBOs, low-carbon fuels have no sector-specific percentage targets (except targets for low-carbon eSAF in aviation under ReFuelEU Aviation Regulation (2023/2405)), but they can nevertheless contribute to emission reduction targets in transportation and industry.
Distinguishing renewable and low-carbon hydrogen
Hydrogen can be produced via various different production pathways. Renewable hydrogen is mostly produced with renewable electricity-powered electrolysis, whereas low-carbon hydrogen can be produced with various production methods. Both low-carbon and renewable hydrogen have to achieve a 70 % emission reduction compared to their fossil counterparts, but the renewability requirement only concerns the energy content of renewable hydrogen. Subsequently, when it comes to hydrogen produced with electrolysis, only electricity used to produce renewable hydrogen has to fulfil the requirements that are set out for electricity production in the RFNBO Delegated Act 1184/2023.
The methodology of the Delegated Act
The methodology set out in the Low-Carbon Delegated Act applies similar approaches as the Regulation 1185/2023 concerning RFNBOs by also applying a life-cycle principle for calculating emissions, taking into account emissions from the production and use of the fuels. Low-carbon hydrogen can be produced with various production methods, such as electrolysis or steam methane reforming with carbon capture, and the methodology to account for the greenhouse gas emission intensity of low carbon fuels has to account for the emissions of a variety of material and energy inputs. Therefore, the Delegated Act includes tables of standard values of greenhouse gas emission intensities for energy and material inputs, as well as a methodology to calculate the greenhouse gas emissions of electricity.
Low-carbon hydrogen produced with electrolysis
According to the Delegated Act, the greenhouse gas emission intensity of electricity is determined at the level of countries or bidding zones. The provisions to calculate the GHG intensity of electricity takes into account all CO2 equivalent emissions associated with the combustion and supply of fuels used for electricity production. The Delegated Act also contains a table of standard GHG emission intensities for inputs used for electricity production. No fuels are associated with electricity produced from renewable sources like wind, solar, geothermal or hydropower, and the carbon equivalent emissions of renewable electricity are therefore considered to be zero. Furthermore, according to the table presented in the Annex of the Delegated Act describing the emission intensity of generated and net imported electricity in Member States, the emission intensity of electricity in Finland in 2023 was 12,5 gCO2eq/MJ, which was the second lowest of the Member States, bringing an advantage to hydrogen projects in Finland.
The Delegated Act leaves the status of nuclear electricity in the production of low-carbon fuels to be resolved at a later time, and it is stated that the Commission shall assess the impact of the introduction of alternative pathways, notably considering low carbon electricity from nuclear power plants by 1 July 2028.
Carbon capture and low-carbon hydrogen
The GHG intensity calculation takes into account carbon capture as a reduction to the GHG emission intensity calculation. Carbon captured from the production of low-carbon fuels can be stored in a geological storage site or permanently chemically bound to long-lasting products listed in the Delegated Act 2024/2620, including carbonated cement and concrete.
Certification
The certification framework of LCH is set out in the Directive 2024/1788, and it is aligned with the certification framework of renewable fuels. Like with RFNBOs, LCH certification may be conducted by voluntary schemes.
Next steps
According to the Directive 2024/1788, the rules should be nationally implemented by 5 August 2026. In Finland, the rules will be brought into the Sustainability Act. The government proposal is anticipated to be given in spring 2026.
The new Delegated Act provides the regulatory clarity needed to unlock investment in low-carbon hydrogen production across Europe. Whilst the implementation of the Delegated Act and the development of low-carbon and renewable hydrogen markets will require further regulatory and infrastructural measures, the new rules create opportunities for Finnish actors. The low emission intensity of Finnish grid electricity benefits hydrogen projects in Finland, as the greenhouse gas emission savings threshold for electrolytic hydrogen is easier to pass than in other EU countries. Furthermore, in relation to the production of low-carbon and renewable fuels from hydrogen and carbon dioxide, the abundance of biogenic CO2 creates a significant competitive advantage for Finland. By leveraging Finland’s unique advantages, companies operating in Finland are well-positioned to benefit from the evolving regulatory landscape and establish a strong foothold in the European hydrogen economy.
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New EU rules for Low-Carbon Hydrogen, source