Hydrogen production plant for both green and blue hydrogen
The commencement of Serbia’s hydrogen production journey is planned to materialize around 2025, signifying a critical shift towards sustainable energy solutions. In the same year Serbia should start producing green hydrogen, which is also a solution for storing excess energy from solar power plants and wind farms.
Green hydrogen is produced through an electrolysis process by splitting water molecules into hydrogen and oxygen. It’s called green hydrogen if the facility is powered by electricity from renewable sources. This form of hydrogen not only serves as an energy solution but also provides a means to store surplus energy generated by solar power facilities and wind farms.
Conversely, “blue” hydrogen denotes hydrogen sourced from natural gas and produced with the support of carbon capture and storage technologies. During the manufacturing of blue hydrogen, the ensuing carbon dioxide (CO2) emissions are captured and permanently stored beneath the Earth’s surface, yielding low-carbon hydrogen with zero CO2 emissions.
According to the draft Hydrogen Strategy of the Republic of Serbia, production launch is set to occur by 2035 at renewable power plants with a total capacity of about 100 MW – 80 MW of wind power and 20 MW of solar power. The goal is to produce 5,100 tons of hydrogen annually. It should provide about 270 GWh of electricity, about 1% of total electricity produced in Serbia.
Serbia’s regulatory framework for green hydrogen is established under the Energy Act, (“Official Gazette of the RS”, No. 145/2014, 95/2018 – other law and 40/2021 “EA“), specifically in Article 16 recognizes the production of hydrogen as a special energy activity. The following article of the EA stipulates that energy activity may be performed by:
- Public company;
- Company, i.e., other legal entity and
- Entrepreneur
Furthermore, the utilization of renewable hydrogen is classified as a renewable energy source under the Law on Use of Renewable Energy Sources (“Official Gazette of the RS”, No. 40/2021) underscoring the eligibility of energy entities employing green hydrogen for incentives stipulated in the legislation. Law on Use of Renewable Energy Sources in Article 4 recognizes renewable hydrogen as a renewable energy source so it can be stated from the above that those energy entities that use green hydrogen to perform their energy activities (production and storage of electricity, for example), exercise the rights to incentives provided by the mentioned law.
Notably, the Serbian oil and gas company NIS is planning to build a hydrogen production plant near the Elemir refinery in Zrenjanin. The endeavor would encompass both green and blue hydrogen production methodologies. At the same time MOL Group announced the construction of one of the largest plants for the production of green hydrogen in Europe – in Sazhalombata, Hungary.
Soon, with the development of green & blue hydrogen production activities, a more thorough legal regulation of a specific issue can be expected.
For more information on the legal framework regulating energy & renewable sources do not hesitate to contact our energy team via office@vuliclaw.com