June 23, 2025
According to a recent report by the International Council on Clean Transportation (ICCT), EU policies set targets for using renewable synthetic fuels, but their climate benefits depend on being made with 100% renewable electricity and avoiding indirect emissions.
EU hydrogen import target
The European Union aims to import 10 million tonnes of renewable hydrogen by 2030. Considering Brazil and Egypt as case studies, ICCT estimates that importing renewable hydrogen as ammonia from countries with abundant renewable resources could be more expensive than producing it domestically in the European Union. Renewable-abundant countries such as Brazil may produce RFNBOs at a lower cost than the European Union, especially when financial incentives are provided in those countries.
Credit: ICCT
However, the additional cost of shipping, including the cost of converting the hydrogen to ammonia, transporting it over a long distance, and then re-converting the ammonia back into hydrogen, can be as high as the production cost itself. For example, an optimistic cost estimate of hydrogen imported from Brazil in 2030, assuming mid-level technology costs and financial incentives, is around €8/kg hydrogen. This is 50% higher than a pessimistic estimate of EU domestic renewable hydrogen production. The cost and challenge of shipping hydrogen long distances could undermine the intended benefit of producing it in cheaper locations.
Cost comparison of imported e-fuel
On the other hand, ICCT finds that the cost of importing renewable e-fuel could be lower than producing it domestically in the European Union. However, using their primary modeling assumptions, ICCT estimates that it is unlikely for imported e-fuel to reach cost parity with fossil diesel unless the cost of fossil diesel increases while renewable electricity, electrolyzers, and DAC all have significant technology breakthroughs that enable deep cost reductions for e-fuels.
Certification and emissions risk
To ensure RFNBOs effectively decarbonize transport in the European Union, the requirements for additionality and geographic and temporal matching, which help ensure that renewable electricity is not diverted from the power sector when used to produce hydrogen, could be properly certified and verified by third parties. Otherwise, the GHG emissions from RFNBOs could be significantly higher than those of fossil fuels.
