European Commission lays out new framework to decarbonise gas markets


The European Commission mapped out new proposals to decarbonise the EU gas market through facilitating uptake of renewable and low carbon gases, such as hydrogen.

In mid-December, it announced its plans for the new framework, detailing how they will help deliver on the EU’s target of decarbonising the energy it consumes to a level where it can reduce greenhouse gas emissions by at least 55% by 2030, before then becoming climate neutral by mid-century. The purpose of the proposals is to create the conditions for a shift from fossil natural gas to renewable and low carbon ones, while also strengthening the resilience of the gas system.

A main aim of the proposed framework is to establish a market for hydrogen, creating the right environment for investment, and enabling the development of dedicated infrastructure. The market rules would be applied in two phases – before and after 2030 – covering access to hydrogen infrastructures, separation of hydrogen production and transport activities, and tariff setting. A new governance structure would also be created under the proposals – the European Network of Network Operators for Hydrogen – to promote a dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction, and to elaborate on specific technical rules.

It further set out how the proposal foresees that national network development plans should be based on a joint scenario for electricity, gas and hydrogen, as well as being aligned with National Energy and Climate Plans, and the EU-wide Ten Year Network Development Plan. Gas network operators will have to include information on infrastructure that can be decommissioned or repurposed, with separate hydrogen network development reporting, ensuring the construction of the hydrogen system is based on a realistic demand projection.

Elsewhere, new rules will make it easier for renewable and low carbon gases to access the existing gas grid, removing tariffs for cross-border interconnections, as well as lowering them at injection points. A certification system for low carbon gases will be created, ensuring a level playing field in assessing the full greenhouse gas emissions footprint of different gases. This will allow Member States to effectively compare and consider them as part of their energy mix. The Commission is also proposing that long-term contracts for unabated fossil natural gas should not be extended beyond 2049.

The proposed package of reforms also has a focus on consumer empowerment and protection. This will seek to ensure consumers can choose renewable and low carbon gases over fossil fuels, while it proposes to improve the resilience of the gas system and strengthen the existing security of supply provisions too. This will see current rules extended to renewable ad low carbon gases, with new provisions introduced to cover emerging cybersecurity risks.

A final element of the Commission’s proposals is that of a more strategic approach to gas storage, which will see storage considerations integrated into risk assessments at a regional level, and the enabling of voluntary joint procurement by Member States to have strategic stocks in line with EU competition rules.