On 21 November, the European Commission published official new rules on Low-Carbon Fuels (LCFs), a key milestone after months of consultation and technical discussions.
These new rules define how hydrogen and hydrogen-derived fuels (including certain CCU fuels) can qualify as LCFs when they are not produced from renewable energy sources but that are still considered low-carbon. This includes, for example:
- Hydrogen or CCU fuels produced from nuclear power
- CCU fuels produced from electricity grids with sufficiently low carbon intensity
- Hydrogen produced from fossil gas with CCS – which exclude by nature CCU pathways
Why does this matter?
These new rules finally define what qualifies as a Low-Carbon Fuel in the EU, providing long-needed clarity for project developers and investors.
They also introduce new methodological elements, for example, how to account for CO₂ mineralisation in the fuel’s emissions footprint.
Our take:
The rules follow the familiar “strict-by-design” approach by EU authorities aimed at preventing unintended impacts. Strict rules, for example on CO2 sources, may impact the rapidity of investments at a time when low-carbon solutions struggle to compete on cost with fossil equivalents.
Yet LCFs can play an important complementary role alongside renewable-based CCU pathways and help grow the market for fossil-free fuels, for example in aviation and shipping.
We now look forward to seeing how the rules work in practice and encourage the Commission to keep supporting clean-tech investors so that choosing green options becomes the simplest and most attractive path forward.
The complete rules can be found here.
