Hydrogen law, regulations & strategy in Slovakia

Whilst hydrogen projects, hydrogen transport and the development of related infrastructure in Slovakia are in early stages of development, there is an interest from both the public and private sectors to explore the possibilities in this area, which has been supported by the Slovak Ministry of Economy. The Ministry is responsible for the development of an implementation strategy for renewable energy and the overall decarbonisation of the Slovak industry and transport. The Ministry prepared the National Hydrogen Strategy “Prepared for the future” (the “National Hydrogen Strategy”) which has been adopted as a non-legislative document by the Slovak Government in June 2021. The purpose of this documents is to increase the competitiveness of the Slovak economy and at the same time make a significant contribution to a carbon-neutral society in accordance with the Paris Agreement. Further, it defines the conditions for the deployment of hydrogen technologies in accordance with the long-term strategic plan for the development of the Slovak Republic. 

Transport

The automotive industry in Slovakia is the most important sector and driving force of the economy with a 13 per cent share of the Slovak GDP. In 2019, the automotive industry made up 49.5 per cent of Slovakia’s total industrial production, while the export share was 46.6 per cent. Since 2007, Slovakia has been the world’s largest producer of cars per capita, producing 202 vehicles per 1,000 inhabitants in 2019. One of the biggest challenges the Slovak automotive industry faces is to reduce its carbon footprint and shift towards low-carbon energy sources, such as hydrogen. To decarbonise, car manufacturers - for example, Kia Motors Slovakia - are considering producing hydrogen powered vehicles in the future. The National Hydrogen Strategy states that hydrogen is a viable alternative to internal combustion engines and electromobility especially in public transport, commercial long-distance transport, trains, planes, ships, construction equipment but also in agriculture, forestry, and the defence industry.

Currently, there is only one hydrogen powered vehicle on the Slovak market: Toyota Mirai (Hyundai NEXO is expected to be introduced to the local market in the near future). Slovakia is still waiting for hydrogen fuelling infrastructure for fuel cell electric vehicles (“FCEV”), however, the first hydrogen fuelling station in Bratislava is expected to be operational as soon as Autumn 2021 with other major cities following in the foreseeable future as one of the main priorities of the National Hydrogen Strategy.

According to the Slovak Ministry of Economy, the future development and use of hydrogen technologies for transport in Slovakia will be determined by several factors. At present, customer behaviour in Slovakia in relation to the purchase of FCEVs is influenced by the relatively high price of such vehicles compared to vehicles with an internal combustion engine (“ICE”). On the other hand, FCEV prices in the M1 category (the vehicle classification system according to the United Nations Economic Commission for Europe) are approximately the same level as battery electric vehicles (“BEV”) in the corresponding size and features. Another economic factor is the fuel price; hydrogen currently has a similar price to petrol and diesel. The price of hydrogen has been stable and recently decreasing due to the reduction of its production costs, so this may influence customer behaviour in due course.

Industry

Currently, there are two big producers of hydrogen in Slovakia. These are the chemical plants: Fortischem and Duslo located in Nováky and Šala. Hydrogen produced is used mainly in their own manufacturing processes and is not exported.

Heating

The Slovak government is considering potential for hydrogen injection into the natural gas grid to displace methane gas consumption and reduce emissions.

According to the National Hydrogen Strategy, the use of hydrogen produced from renewable energy sources can have a positive impact on the reduction of primary energy consumption in the Slovak Republic, compared to conventional heat production in heating plants and cogeneration, under certain conditions. One of these conditions is the use of seasonal storage, i.e., the accumulation of hydrogen during periods of surplus electricity exports onto the grid and its deferred use in the heat sector during electricity shortages or increased heat consumption in the winter period.

Quantifying the effective rate of substitution of natural gas by hydrogen for use in the heating sector will require further analysis. This will including examining the ability of the electricity grid to manage the additional electricity consumption, as well as  the ability of the gas grid to accumulate and store the necessary volumes of hydrogen in the long term.

The domestic methane gas grid is well-developed (94 per cent of the population has access to natural gas grid in Slovakia) and interconnected with several neighbouring countries. The gas distribution network provides methane gas to more than 80 per cent of households, as well as to commercial buildings. Most of the gas supplied is used for heating.

Hydrogen blending is not yet utilised or regulated in Slovakia. However, we would expect that heating with methane gas will remain dominant, therefore blending hydrogen with methane may be attractive for decarbonising heating.

The hydrogen market in Slovakia is in early stages with significant prospects for future growth. The new Minister of Economy stated in July 2020: “Slovakia is an automotive power, so its ambition in the future is to be among the world's leaders in alternative propulsion systems [in road vehicles]. The Ministry of Economy will play a key role in this effort”. Much effort has also been put into research and development of hydrogen storage technologies, including by Technical University of Košice, one of the leading institutions in this field.

Due to the limited use of hydrogen in Slovakia, there has been little by way of private financing to date. However, there is public funding available (national and EU) for the development of renewable energy resources, funded by both the State and European resources.

Slovakia is also considering producing low carbon hydrogen using nuclear energy. With four operational pressurised water reactors in use (a fifth unit is in the construction phase and a sixth in planning), Slovakia expects to produce more nuclear energy than necessary for domestic electricity consumption so could use the excess energy for powering electrolysers to produce hydrogen.

Since most hydrogen used in the chemical industry is currently produced from fossil fuels, decarbonising the industrial sector with green or blue hydrogen is necessary. The Minister of Economy has suggested that blue hydrogen produced by Slovak nuclear powerplants could be sold for use in the German chemical industry. 

Finally, Slovakia is considering the introduction of hydrogen powered buses into the Slovak public transport system. Hydrogen powered buses have already been successfully deployed in other European countries, including the Czech Republic, so would serve as models for Slovakia. The Bratislava Transport Company (“DPB”) has already announced the purchase of the first hydrogen buses in Slovakia. These will be 12-metre fuel cell-powered buses with a range of more than 350km. They are expected to be on Bratislava's roads in late 2022/early 2023.

Lacking infrastructure

The most significant barrier to the rollout of FCEVs in Slovakia is the absence of a network of hydrogen fuelling stations. The Slovak Ministry of Economy has stated that a basic network of fuelling stations in the main transport hubs and clusters will be built by 2023.

Regarding hydrogen blending into the natural gas grid, technical barriers need further consideration. Even though the Slovak natural gas grid is well developed, one of the concerns around hydrogen injection is the possible corrosion of the pipelines in the gas grid in the case of a higher concentration of hydrogen. This matter is now subject to ongoing engineering and scientific inquiries. 

Legislative framework

As in many other jurisdictions, there is no specific legislative regulatory framework in Slovakia for hydrogen technology and projects. 

The main legal provision governing hydrogen is § 2 (4) Act No. 309/2009 Coll. on the Promotion of Renewable Energy Sources and Highly Efficient Cogeneration and on Amendments to Certain Acts, which recognises hydrogen as a source of renewable energy: “for the purposes of this Act, a fuel produced from renewable energy sources (hereinafter referred to as “biofuel”) means (i) biohydrogen, which is hydrogen produced from biomass”. The regulation of hydrogen in Slovakia is discussed in more detail below. 

Despite its non-legislative nature “National Hydrogen Strategy Prepared for the future” can provide valuable insight into the developments in the field. According to the National Hydrogen Strategy, the Slovak Government will aim to accelerate the creation of the legislative framework and financial conditions for the implementation of hydrogen technologies. This shall be mainly achieved by the introduction of legislation and safety regulations to support the readiness of the gas infrastructure for the transport, distribution, and storage of hydrogen and removing legislative barriers to the deployment of solutions using hydrogen. 

Legislation

There is very little legislation that specifically relates to hydrogen projects. Instead, hydrogen projects must navigate the existing legislative landscape which applies to renewable energy projects and gases generally. The most significant relevant laws are:

• Energy Act No. 251/2012 Coll. and on Amendments to Certain Acts;
• Act no. 309/2009 Coll. on the Promotion of Renewable Energy Sources and Highly Efficient Cogeneration and on Amendments to Certain Acts; and
• Act no. 250/2012 Coll. on Regulation in Network Industries.

The Slovak gas market is regulated by the Regulatory Office for Network Industries, a government administration body for the national regulation of network industries.

The Slovak Ministry of Economy and its Slovak Innovation and Energy Agency are crucial for further development of hydrogen projects in Slovakia. They lead and coordinate efforts in the field of renewable energy and oversee allocation of appropriate government and European funds. Since March 2020, the development of hydrogen projects and technologies has been promoted by the Minister of the Economy.

Injection into the gas grid – blending hydrogen into the existing gas networks

The injection of hydrogen into the gas grid is not explicitly regulated at present. Existing laws on injection, transport, and use of gas would apply to hydrogen as they do for methane gas. Slovakia has not introduced its own legislation regarding hydrogen blending. Instead, Slovakia is monitoring the efforts of other EU countries which have introduced limits on the injection of hydrogen into the gas grid and are undertaking research to raise the limit to between 20 and 30 per cent. According to the National Hydrogen Strategy, the Government will examine the potential of the natural gas transmission network to be used also for hydrogen transport if its capacity will not be fully utilised for the transport of natural gas. At the same time, solutions will be sought for the technological adaptation of the gas distribution network to the possibilities of distribution of hydrogen, depending on the development of the hydrogen market.

The natural gas distribution network is very well developed in the Slovak Republic. According to the National Hydrogen Strategy, it will be possible to use the Slovak gas distribution network for the transport and distribution of hydrogen after technical modifications, which will be preceded by a detailed expert analysis of the technical condition of the pipelines. The use of hydrogen and various forms of gaseous mixtures containing hydrogen will play an important role in the decarbonisation of the heating and industry in the Slovak republic.

Real Estate and Consenting

Major hydrogen projects are likely to be considered as significant national investments which may be subject to faster planning proceedings. Significant investments are defined and regulated by Act No. 175/1999 Coll. on Certain Measures Concerning the Preparation of Significant Investments and on Amendments to Certain Acts.

In case of building a new site as part of a hydrogen project or rebuilding an existing site for such purpose, all relevant provisions of Act No. 50/1976 Coll. Act on Spatial Planning and Building Regulations (Building Act) must be complied with.

In relation to storage and production of hydrogen on site, an Environmental Impact Assessment (“EIA”) may be required according to Act No. 24/2006 Coll. on Environmental Impact Assessment and on Amendments to Certain Acts.

Health and Safety

Health and Safety relating to hydrogen is not explicitly regulated. However, the following health and safety regulations, that deal with the treatment of dangerous gases, would have to be complied with:

• Act No. 124/2006 Coll. on Safety and Health at Work and on Amendments to Certain Acts;
• Act No. 67/2010 Coll. on Conditions for Placing Chemical Substances and Chemical Mixtures on the Market and on Amendments to Certain Acts (Chemical Act); and
• Act No. 128/2015 Coll. on the Prevention of Serious Industrial Accidents and on Amendments to Certain Acts, which lists hydrogen as a dangerous substance.

Everyone involved in the control of handling hazardous chemical substances in the workplace must be familiar with the EU legislative framework for dangerous substances, including health and safety legislation concerning protection of employees from health and safety risks in general and from hazardous substances in the workplace. Also, employers are required to carry out a workplace risk assessment for all safety and health risks, including those arising from hazardous substances, and to lay down appropriate protective and preventive measures

Transport of hydrogen by road

Slovakia is a member party of the European Agreement concerning the International Carriage of Dangerous Goods by Road (“ADR”).

The ADR regulates the transport of hydrogen, which is classified as a dangerous good under Annex 5.

Drivers transporting hydrogen in Slovakia must receive appropriate training and vehicles must meet specifications required for hazardous cargoes.

There is no specific regulatory body which is responsible for regulation of hydrogen projects in Slovakia, but several Slovak ministries, government agencies and local authorities have the development of hydrogen projects on their agendas. 

The Slovak Renewable Energy Agency (“SK REA”), a non-profit organisation established in 2006 to promote the development of renewable energy sources in Slovakia, is a useful point of reference in relation to future hydrogen projects. The activities of SK REA range from helping to raise public awareness on energy-efficient solutions to providing support in the dialogue between the private sector and politicians, particularly on economic and legislative issues.

The National Hydrogen Association (“NVAS”) is a joint initiative of natural and legal persons that supports implementation of hydrogen technologies in the transition to a low carbon economy. NVAS has defined two main goals. As a professional association, it aims to play a key role in implementing best practice within the Slovak Republic and shaping effective public policy. The second key role of the association is to be an asset to its members in terms of the rapid delivery of news on regulatory decisions, new policies, and technologies in the hydrogen and fuel cell sector.

Although use of hydrogen is in its early development, there are interesting upcoming developments underway or in planning stages.

In the village of Močenok, the EU has approved funds for the development of a new wind powerplant park with an electrolyser to produce hydrogen. This development will be built next to the chemical factory, Duslo. Once operational, it is planned that the factory will no longer have to produce hydrogen for its own needs using natural gases but, instead, will get it from wind electricity. As of yet, there has been no confirmed date for construction to begin.

The Slovnaft refinery in Bratislava plans to build a large new hydrogen production plant from natural gas in the coming years. Hydrogen from this production plant will be predominantly used for internal technological processes, including the desulphurisation of oil. However, later production may be used for transport. 

The production of hydrogen vehicles by Kia Motors Slovakia. The owner of Kia Motors, Hyundai Motor Group, has hydrogen cars in its portfolio already. The CEO of Kia Motors Slovakia stated that, in the future, a certain proportion of the production of hydrogen cars could take place in the Slovak factory in Žilina. 

The Slovak Innovation and Energy Agency was ordered by the Minister of the Economy to build 4-8 hydrogen filling stations before the end of 2020. The project is underway, however it is behind the initial timeline. There have also been talks about utilising 11 CNG filling stations operated by the major energy supplier in Slovakia, Slovenský plynárenský priemysel a.s. (“SPP”) to become hydrogen filling stations. 

The first hydrogen fuelling station in Slovakia located in Bratislava is expected to be operational as soon as Autumn 2021. Other major cities will follow in the foreseeable future as one of the main priorities of the National Hydrogen Strategy.

A hydrogen research centre has been proposed by the Technical University of Košice to focus on the use of hydrogen to power passenger vehicles. This project has been supported by the Minister of Economy following discussions with the University and, although a timeframe has not yet been established, the project has a good prospect of being established. This proposal is also reflected in the National Hydrogen Strategy.  According to this non-legislative document, the establishment of the Hydrogen Technology Research Centre of the Slovak Republic (“CVVT”), based in Košice, will aim to ensure and concentrate the available capacities in the field of basic and applied research and innovation. CVVT will operate as an open organisational structure, which will allow membership to all academic and research institutions from the industrial and public sector in the Slovak Republic, and possibly also from abroad. CVVT is also expected to maintain an active dialogue with the private sector. 

Low-pressure hydrogen-electric bus developed by Slovak manufacturer Rošero will be presented at the Dubai Expo2021. The bus is unique in its use of low-pressure hydrogen storage in metal hydride alloy tanks. The specifications are tailored to use in urban traffic.

The trial operation of hydrogen trains could start on the Nové Zámky - Prievidza line in 2025. This timetable will be dependent on the further successful utilisation of the European Structural and Investment Funds in the new programming period. 1 “Over half of EU funding is channelled through the 5 European structural and investment funds (ESIF). They are jointly managed by the European Commission and the EU countries. The purpose of all these funds is to invest in job creation and a sustainable and healthy European economy and environment. The ESIF mainly focus on 5 areas: research and innovation, digital technologies, supporting the low-carbon economy, sustainable management of natural resources, small businesses.” For more information please see: https://ec.europa.eu/info/funding-tenders/funding-opportunities/funding-programmes/overview-funding-programmes/european-structural-and-investment-funds_en  The deployment of the hydrogen trains is expected to reduce the noise of the trainsets by at least 30 per cent and save up to 6,000 tons of CO2 per year. 

Slovakian energy company BCF Energy is planning to invest one hundred and ten million euros (€110,000,000) to develop a network of 40 hydrogen refuelling stations across Slovakia, the first to be between Handlová and Prievidza. BCF Energy intends to produce green hydrogen for the network in purpose-built factories powered by solar generation. It is intended that the refuelling stations begin selling hydrogen in 2023/2024.