The New European Hydrogen Methodology and BRICS Discussions on Emission Accounting

by Jefferson dos Santos Estevo* (Advanced Biofuels USA) The growing importance of low-emission hydrogen in the global energy transition has driven a series of regulatory and diplomatic initiatives aimed at standardizing the greenhouse gas (GHG) emission criteria associated with its production. Among the most significant advances is the recent regulation adopted by the European Union which establishes a new methodology for accounting for emissions of low-carbon fuels, especially hydrogen. Published on 8 July 2025, it complements Directive (EU) 2024/1788 by setting standards for the European market that will also serve as benchmarks for fuel imports.

The traditional classification by "colors of hydrogen" (green, blue, gray, pink, etc.) is being replaced in recent years by an approach based on carbon intensity expressed in gCO2eq/MJ and measured according to a standardized life cycle methodology. This new analysis is being addressed by the International Energy Agency (IEA), which since 2022 has promulgated that: “the term renewable hydrogen includes hydrogen produced via electrolysis using renewable electricity or via biomass based routes (....) The IEA does not use colours to refer to the various hydrogen production routes” (IEA, 2022, p.272). Thus, the EU seeks a methodology that fits in with the standards required for the block, based on the premise that the energy source used in hydrogen production alone is not sufficient to quantify harmful emissions which is necessary to determine its environmental impact.

Thus, according to the European rule, to "be considered low carbon, hydrogen and related fuels will need to reach a threshold of 70% greenhouse gas emission savings compared to the use of unabated fossil fuels" (European Commission, 2025, n.p). Also, for production via electrolysis, the methodology requires that three criteria be met: (i) additionality, i.e., electricity must come from new unsubsidized renewable energy capacity, avoiding competition with other demands; (ii) temporal correlation, which requires that the production of hydrogen occurs simultaneously with the generation of renewable energy used; and (iii) geographic correlation, ensuring that the units are in the same electrical region. The methodology also accounts for situations of use of the electricity network, requiring proof through energy purchase contracts (PPAs) with renewable sources to validate the origin of the electricity.

In addition to the technical aspects, the European regulation establishes guidelines for the certification and traceability of fuels, using standards and methodologies recognized by the European Commission. European guidelines clearly involve a combination of scientific rigor, monitoring mechanisms and transparency requirements. It is, therefore, a milestone that can influence both bilateral agreements and the formation of international hydrogen markets, as well as other energy sources.

Parallel to the European advance, there is a growing politicisation of the issue of carbon accounting or emissions in the context of multilateral relations, especially the recent declarations at the G20 and more recently at the BRICS Summit, both hosted by Brazil.

In the first, at the end of 2024, the issue of harmonization of emission standards was included in the agenda for a proposal for common mechanisms of traceability and eligibility of biofuels, based on life-cycle metrics and avoided emissions. In partnership with the Brazilian presidency, the IEA elaborated a document on carbon accounting as an essential tool for measuring GHG emissions, emphasizing the whole production chain in biofuel production, based on life cycle assessment. The use of internationally recognized methods, such as the GHG Protocol and ISO 14064, helps to ensure transparency and comparability across countries and sectors.

Within the BRICS, with the Summit taking place in the city of Rio de Janeiro, this position was consolidated as part of the Leaders' Declaration: "84 We encourage the use, when appropriate, of mutually recognized methodologies and standards to assess greenhouse gas emissions." (Brazil, 2025,n.p).

It follows with the news of the approval of the "Principles for Fair, Inclusive and Transparent Carbon Accounting in Product Assessments and Production Units". This is a collective contribution to guide the formulation of standards and methodologies that take into account diverse realities, respect regulatory sovereignty and contribute to the construction of more representative frameworks in the international system.

The BRICS joint note also rejects "unilateral, punitive and discriminatory protectionist measures (...) under the pretext of environmental concerns, such as unilateral and discriminatory mechanisms for carbon adjustment at borders (CBAMs), regulations on deforestation" (Brazil, 2025,n.p).

Moreover, in a second document on climate finance, the BRICS recognize the potential of climate taxonomies and certification standards as instruments to foster technological cooperation, attract investments and expand productive integration among members.

In this context, the convergence between the technical sophistication of the European methodology and the political dimension of the global debate highlights the strategic importance of carbon accounting standards in international negotiations. The definition of widely recognized methodologies will be central to the legitimacy of low-emission hydrogen market mechanisms, with greater traceability of production chains and the integration between national and international regulations.

Partial harmonization, or at least transparency on methodological differences, could avoid trade disputes and increase confidence in decarbonization processes, contributing to the mitigation of emissions and climate change.

Thus, the European advance, coupled with pressure for greater climate justice in the Global South, puts carbon accounting at the center of international climate and trade negotiations. It is in this intertwining between technical regulation, environmental diplomacy and trade geopolitics that the future of the rules that will guide the transition to a low-carbon economy is being designed.

* Jefferson dos Santos Estevo is a researcher in International Relations and Energy Transition at the Center of Excellence in Hydrogen and Sustainable Energy Technologies (CEHTES) at the Federal University of Goiás. He holds a doctorate in Social Sciences from the University of Campinas.