RED III and RFNBO hydrogen: what industrial projects need to know in 2026
Updated October 2026
For an industrial company considering hydrogen, the practical question is whether the fuel will qualify for the intended use, regulatory claim or funding programme. That depends on its production, electricity supply, lifecycle emissions and supporting evidence.
The EU’s Renewable Energy Directive, commonly called RED III, sets demand targets for renewable fuels of non-biological origin, or RFNBOs. Separate rules determine which fuels qualify. Understanding both helps businesses plan projects and assess suppliers.
What the targets mean for industry
Member States must ensure that RFNBOs account for at least 42% of qualifying hydrogen use in industry by 2030, rising to 60% by 2035. These are national targets. The directive does not impose an identical purchasing quota directly on every industrial company. [1]
The calculation excludes certain transport-fuel intermediates and by-product hydrogen. Countries meeting specified conditions can reduce the industrial target by 20%. Businesses need to establish how national legislation applies to their activities. [1]
In transport, RFNBOs must contribute at least one percentage point within the combined 5.5% target for advanced biofuels and RFNBOs in 2030. Accounting rules and national fuel-supplier obligations determine how compliance works. [1]
The main RED III transposition deadline was May 21, 2025. Project planning now requires checking adopted national measures, alongside EU rules. [2]
What qualifies as an RFNBO?
RFNBOs are liquid or gaseous fuels whose energy content comes from renewable sources other than biomass. They include hydrogen produced using qualifying renewable electricity and derivatives such as e-methanol, e-kerosene and renewable ammonia. Ammonia is made from hydrogen and nitrogen. Carbon-containing e-fuels also require a suitable carbon source. [1, 3, 4]
To count towards RED targets, RFNBOs must achieve at least 70% lifecycle greenhouse-gas savings. Renewable electricity eligibility and emissions performance are separate assessments. A low emissions figure alone does not establish RFNBO compliance. [1, 3]
The methodology uses a fossil comparator of 94 g CO₂-equivalent per megajoule, giving a maximum intensity of 28.2 g CO₂-equivalent per megajoule. The assessment includes relevant processing and delivery emissions, not just electricity consumption at the electrolyser. [3]
Direct connection: renewable generation on a direct line or within the same installation, subject to a 36-month age test and grid-metering safeguards.
Highly renewable grid: a bidding zone above 90% renewable electricity, with a production-hours limit.
Low-emission grid: below 64.8 g CO₂-equivalent/kWh, with a renewable power purchase agreement, or PPA, and time and location matching.
Avoided redispatch: evidence from the transmission system operator that consumption reduced the need to curtail renewable generation.
Standard grid/PPA route: additionality, temporal and geographical matching, including requirements concerning the age of renewable generation and restrictions on certain forms of public support.
Location matching covers the same bidding zone, an interconnected zone meeting a price test, or a connected offshore zone. [5]
The dates that affect project design
Matching is monthly through 2029 and hourly from Jan 1, 2030. Member States may introduce hourly matching from Jul 1, 2027 after notification. [5]
For RFNBO installations that come into operation before Jan 1, 2028, the additionality requirements in Article 5(a) and (b) do not apply until Jan 1, 2038. These requirements concern the age of the renewable electricity installation and restrictions on operating or investment aid received by that installation. This exemption does not cover RFNBO production capacity added after Jan 1, 2028. Other applicable requirements, including time and location matching under the grid/PPA route and lifecycle emissions criteria, still apply. [5]
Confirm the chosen route and evidence with the certification body before committing to electricity contracts or commissioning assumptions.
What evidence should buyers request?
National schemes and Commission-recognised voluntary schemes provide routes for demonstrating compliance. Examples with RFNBO recognition include CertifHy, ISCC EU and REDcert. Check the scheme’s recognised scope and the supplier’s certificate. Eligibility for RED accounting is distinct from permission to sell hydrogen. [6]
Independent certification bodies audit operators. A Proof of Sustainability, or PoS, accompanies qualifying consignments and a certified economic operator issues it. It is distinct from the operator’s certificate. A Guarantee of Origin alone does not demonstrate RFNBO compliance. [6, 7]
A buyer’s checks should cover:
The supplier, production site, certificate scope and validity.
The PoS and lifecycle emissions information for the supplied volume.
Traceability and contractual responsibility for correcting missing or inaccurate evidence.
Mass-balance accounting tracks volumes and sustainability attributes through the supply chain. Follow the applicable scheme’s reconciliation rules. The Union Database supports transaction and sustainability traceability. Its workflow is separate from operational time matching. [7]
Audit readiness also requires documented procedures, calibrated meters, complete records and clear responsibilities. CertifHy’s experience with operating projects identifies these fundamentals as recurring sources of audit findings. [8]
Compliance, funding, and commercial value
RFNBO qualification can support access to particular markets and funding calls. It does not guarantee an award, a price premium or an offtake agreement.
European Hydrogen Bank auctions award premiums according to bids and individual call rules, with support for up to ten years of certified and verified production. The programme has expanded to include electrolytic low-carbon hydrogen. Therefore, check eligibility against the relevant call, rather than assuming that all hydrogen support is RFNBO-only. [9]
Turn the rules into a project plan
Start the compliance assessment while defining the project. Five questions help connect the rules to engineering and commercial decisions:
Which electricity sourcing route fits the site and operating schedule?
What generation, consumption and hydrogen-output data must be measured and retained?
How do compression, storage and delivery affect lifecycle emissions?
Who manages certification, mass balance and reporting?
What evidence does the customer or funding programme require?
For example, an industrial site considering on-site electrolysis should assess its electricity arrangement, expected operating profile and delivery boundary together. An existing solar installation may affect the available compliance route. Storage may impact operation and emissions. The team should resolve these questions before assuming that all output will qualify.
Equipment selection is part of this assessment. The project also needs suitable electricity contracts, operating controls and an evidence system that works in daily use.
Why stable targets matter to Hydrogenera
Hydrogenera is one of 170 companies that signed a joint letter calling on the European Commission to retain binding RFNBO targets and mandates for transport and industry beyond 2030. The initiative brings together Hydrogen Europe, the Hydrogen Council and the Renewable Hydrogen Coalition. [10]
We believe predictable demand helps industrial customers assess hydrogen investments. It also gives electrolyser manufacturers a clearer basis for planning production, developing technology and investing in capacity. We support keeping the targets while addressing practical barriers to delivery.
The Commission’s AccelerateEU strategy announced a targeted review of renewable hydrogen production criteria in April 2026. An announced review does not itself change the rules. The existing industrial framework already includes a 2035 target, while the next renewable energy framework is being developed. [1, 11, 12]
For companies planning hydrogen projects, the priority is to combine that long-term direction with a workable electricity supply, credible emissions accounting and evidence customers can rely on.