Efforts by the European Commission to revise the Industrial Emissions Directive (IED) present an opportunity to improve the legal framework for electrolysers. But a proposed revision of the Industrial Emissions Directive (IED) introduces requirements that would discourage electrolyser construction. IKEM concluded in a position paper issued after the Commission released its draft of the revision on 5 April. ‘In its current form, the revised directive will hinder the transformation of the gas sector by inhibiting the construction of electrolysers,’ said Dr Simon Schäfer-Stradowsky, managing director of IKEM. ‘Electrolysers should be excluded from the scope of the directive. That would also open up new opportunities at a national level.’
The proposed revision represents an attempt by the Commission to strengthen environmental regulations on large industrial and agricultural operations in the EU. The revised directive classifies electrolysers as ‘industrial emissions systems’. This designation significantly lengthens the required approval process and creates additional requirements for operators. The proposed revision also does not distinguish between plants of different sizes or between different manufacturing processes.
Electrolysers play an important role in the energy transition because they can use renewable electricity to produce hydrogen. This substance could eventually replace natural gas as an energy carrier. They also enable sector coupling and create flexibility in the energy system.
‘The directive sets the bar too high, especially for smaller projects,’ said Schäfer-Stradowsky. ‘Very few project developers will dare to build under these conditions.’ Schäfer-Stradowsky also criticised decision makers for failing to prioritise climate change mitigation in the proposed revision. The directive puts ‘hydrogen production processes that are harmful to the climate – like steam reforming – on an equal footing with clean alternatives like electrolysis,’ he said. ‘We call on decision makers to explicitly exclude electrolysers from the scope of the directive.’ ‘The EU shouldn’t make the same mistakes with electrolysis that Germany did with wind energy expansion,’ he added.
Excluding electrolysers from the directive would also open up new opportunities for adapting the legal framework at the national level, IKEM concluded. ‘The revised IED includes a general licensing requirement. Instead, the Fourth Federal Immission Control Ordinance could introduce a tiered approach to the permit process,’ said Judith Schäfer, head of IKEM’s Energy Law Department.
In its position paper, IKEM proposes a modification of the provisions that would exempt smaller-scale electrolysers from the immission control licensing requirement. The licensing requirement for medium-sized electrolysers would ideally be simplified. Under IKEM’s proposal, only larger electrolysers would be subject to a formal immission control licensing procedure.
This tiered approach should also apply to the environmental impact assessment (EIA), said Schäfer-Stradowsky. ‘The legal requirements for EIAs are too burdensome for small and medium-sized electrolysers,’ he said, ‘so they also inhibit expansion.’
IKEM recommends a revision that would exempt smaller electrolysers from a requirement to conduct an EIA and a preliminary assessment. A general preliminary assessment would be required for medium-sized electrolysers, and large electrolysers would be required to conduct an EIA.
