The Ukrainian hydrogen legislation should implement the European experience
During the international online conference "Development of Hydrogen Technologies in the World," which took place last month, great attention was paid to the issue of legal regulation in the field of hydrogen energy. After all, as noted by the President of the Energy Association "Ukrainian Hydrogen Council" Oleksandr Rіepkin, the availability of basic legal documents will ensure significant development of the hydrogen market and will be a good signal for investors.
As joining the EU is a priority of Ukraine's foreign policy, and the European hydrogen strategy also plays an important role for our country, the development of the legislative framework should be based on European legislation in the field of hydrogen. This was emphasized by legal expert Serhiy Datsiv, a senior lawyer at Integrites, which has been involved in the support of wind and solar power plant construction projects, biogas production, and closely monitors the development of the hydrogen sector in both Ukraine and Europe.
According to Serhiy Datsiv, in the last three years, Europe has made significant progress in developing a legislative framework for green hydrogen. After the presentation of the Hydrogen Strategy in 2020, the criteria for green hydrogen and requirements for the operation of this sector have already been defined. Currently, the EU considers using green hydrogen as part of a mixture with natural gas to be a perspective. Therefore, the first step was to prepare changes to the Gas Directive, which, by the way, was also the basis for Ukrainian legislation on the gas market. The EU proposes that the same rules apply to green hydrogen as to natural gas: the division of activities into production-storage-transportation; equal access of all market participants to gas transportation systems, which are currently the only option for transporting green hydrogen.
The latest legislative initiatives in the field of green hydrogen, presented on February 3 of this year, stem from the fact that only hydrogen produced using electricity from green/renewable sources will be considered green hydrogen. Accordingly, nuclear energy has also been recognized as green. According to Serhiy Datsiv, the EU has established a transitional period until 2028 during which hydrogen produced using non-green electricity, such as coal, will also be considered green.
Regarding a comprehensive European approach to legislative regulation of the hydrogen sector, the lawyer believes that such an approach is still in its formative stages. The general trend for almost all EU countries is fragmentation of the relevant legislation.
For example, in France, there are three types of hydrogen: renewable, low-carbon, and hydrogen that does not fall under the first two categories. However, specific criteria by which hydrogen with corresponding indicators should be assigned to the enumerated categories have not yet been established. Therefore, regarding which hydrogen is considered green, the French legislator has not yet made a determination. As for the regulation of hydrogen production activities, they are not only subject to licensing. Since hydrogen is considered a substance that carries risks, its producers are subject to requirements for production safety, prevention of emissions, and so on. Regarding the legal regulation of storage activities, in France, storage of hydrogen in quantities greater than 1 tonne requires licensing, while for volumes up to 100 kg, it is sufficient to submit a notification. France allows hydrogen storage in underground reservoirs, which are also subject to environmental protection requirements. The issue of transportation is currently only regulated for pipeline transport. Several special pipelines operate in the country, but hydrogen can also be transported by the gas transport system.
Germany's experience differs in terms of more legislative gaps. Hydrogen is transported through the gas transport system, and network operators not connected to the system are not subject to legislation and can avoid any legal regulation in this area, except for requirements for environmental and worker safety.
In the UK, according to an expert, legislative regulation in the field of green hydrogen is more complex. It is possible to transport hydrogen not only through the gas transport system but also by road transport. The latter is subject to requirements for transporting green hydrogen as a particularly dangerous substance, and accordingly, the legislation from the 1990s on chemical and toxic substances is applied to hydrogen. Regarding the storage of hydrogen, there are also regulations in the country: storage of 2 tons or more requires a license, and up to 2 tons, it is sufficient to provide a notification that a specific entity is engaged in storage.
Taking this experience into account, Ukraine will have to develop its own legislation, avoiding mistakes and implementing European experience, according to the lawyer. But first, the Ukrainian hydrogen strategy must be approved. The next step should be the development of legislation in the field of hydrogen transportation, including automotive and maritime transportation. At the same time, legal norms necessary for the construction of new pipelines that will specialize exclusively in green hydrogen should be developed. Such projects can be of interest to private investors as well. The next essential component in this package of documents is legislation on guarantees of the origin of green hydrogen. In addition, the development of by-laws on environmental protection, taking into account projects in the field of green hydrogen, changes in the procedure for conducting environmental impact assessment, etc., is ahead. It will also be necessary to make changes to the standards that regulate the operation of the gas transportation system.
So, the work ahead is significant, but with the support of the Ukrainian government and the enormous motivation of the drivers of this process, hydrogen will become an important tool for Ukraine's green reconstruction.