Regulatory sandboxes

Overview of the status and impact of the innovation

Innovation

What

Regulatory sandboxes are temporary and spatially limited testing procedures for innovative green hydrogen–related technologies that do not fall under existing regulatory frameworks. They allow new innovations to be tested in real-life projects under a regulator’s oversight, generating knowledge that can be used to develop new regulatory frameworks that will support innovative technologies and business models. Regulatory sandboxes can also be used to test legal flexibility under existing legal frameworks and market conditions, or experiment with possible new legal provisions. For example, Germany’s Federal Ministry for Economic Affairs and Energy has set up the Northern Germany Regulatory SandBox with EUR 52 million funding to explore regulations that support the use of “green hydrogen to integrate industry, transport and the supply of heat in a consistent manner” (Federal Ministry for Economic Affairs and Climate Action, 2021).

Why

Regulatory sandboxes are a necessary step for translating new technical developments into innovations and practical applications, and for supporting their fast adoption. They help ensure the development of an effective regulatory framework for green hydrogen–related innovations and business, thereby accelerating the establishment of the green hydrogen economy.

BOX 9.15 Regulatory sandbox in Denmark

The Danish government has designated GreenLab as an official regulatory energy test zone, exempting it from existing electricity regulations in order to test new solutions for integrating unprecedented amounts of renewable energy into the energy system. GreenLab’s test zone permit is unique in Europe, and the insights from GreenLab will be valuable for all of Europe’s green transition – including clean energy storage, green fuels, agriculture and industry (GreenLab, 2021a).

One of GreenLab’s projects is GreenHyScale, which is exploring the use of pressurised alkaline electrolysis for large-scale onshore and offshore green hydrogen production (GreenLab, 2021b).

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