EU’s gas and hydrogen market reforms move step closer

Updated rules to decarbonise the EU’s gas market and create a hydrogen market have been provisionally agreed between the European Parliament and Council.

With this agreement, the rules need now to be formally adopted by the respective parties and published to enter into force.

The key focuses of the new rules are to enable the uptake of renewable and low-carbon gases and to establish a market design for hydrogen in Europe.

The renewable gas uptake will be enabled by facilitating connection and access to the existing gas grid and allowing discounts to cross-border and injection tariffs for these gases.

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A certification system for low carbon gases, including hydrogen, is also established, with the aim to ensure a level playing field and consistency in assessing the full greenhouse gas emissions footprint of different gases and allow member states to compare and consider them in their energy mix.

The hydrogen market design agreement foresees a two-phase approach, before and after 2033.

In the ramp-up phase, a simplified framework will apply with clear visibility about the future rules for a developed hydrogen with provisions covering inter alia access to hydrogen infrastructures, separation of hydrogen production and transport activities and tariff setting.

A new governance structure in the form of the European Network of Network Operators for Hydrogen (ENNOH) will be established to promote a dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction. It will also be responsible for elaborating specific technical rules.

A new long-term planning regime also is envisaged with national network development plans based on joint scenarios for electricity, gas and hydrogen.

Hydrogen and gas network operators will have to include information on infrastructure that can be decommissioned or repurposed, and there will be specific hydrogen network development plans to ensure that the construction of the hydrogen system is based on a realistic demand projection.

Another element of the framework is consumer empowerment and protection, with the revision mirroring the provisions already applicable in the electricity market, so that consumers will be able to switch suppliers more easily, use effective price comparison tools, get accurate, fair and transparent billing information, and have better access to data and new smart technologies.

“[The] deal will help Europe move away from fossil fuels and embrace cleaner solutions,” commented Kadri Simson, Commissioner for Energy.

“These new rules are vital not only to develop an internal market for renewable and low carbon hydrogen, but also to ensure these cleaner gases will contribute to the decarbonisation of the EU’s economy.”

The agreement on the package has been welcomed by the industry association GD4S, with Raúl Suárez, CEO of Spanish gas distributor Nedgia and GD4S President, saying: “We welcome the recognition of the crucial role for gas distribution grids to support the energy transition through increasing shares of renewable and decarbonised gases. GD4S and its members stand ready to contribute.”