EC sets out proposals for decarbonising Europe’s gas markets

Establishing a market for hydrogen and tackling methane emissions are at the heart of new proposals from the European Commission to decarbonise the region’s gas markets.

The proposals – a directive and regulation – are aimed to support the goal of achieving at least 55% reduction in greenhouse gas emissions by 2030 and reaching net zero by 2050. As such the rules are planned to be applied in two phases, before and after 2030.

The proposals envisage a shift from fossil natural gas to renewable and low carbon gases, in particular biomethane and hydrogen, with the creation of the right environment for investment and the development of dedicated infrastructure, including for trade with third countries.

They foresee that national network development plans should be based on a joint scenario for electricity, gas and hydrogen, with alignment to the national energy and climate plans as well as EU ten year network development plans.

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

In order to make it easier for renewable and low carbon gases to access the existing gas grid, tariffs will be removed for cross-border interconnections and lowered at injection points. A certification system for low carbon gases also will be created to provide a level playing field in assessing the full greenhouse gas emissions footprint of different gases.

To avoid locking in fossil natural gas the Commission is proposing that long-term contracts should not be extended beyond 2049, while consumers also should be able to choose renewable and low carbon gases over fossil fuels.

“Europe needs to turn the page on fossil fuels and move to cleaner energy sources. This includes replacing fossil gas with renewable and low carbon gases, like hydrogen,” says Executive Vice-President for the European Green Deal, Frans Timmermans.

“Today, we are proposing the rules to enable this transition and build the necessary markets, networks and infrastructure.”

Hydrogen networks

A key feature of the hydrogen market development is the proposal to establish a new governance structure in the form of the European Network of Network Operators for Hydrogen (ENNOH), to promote a dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction and elaborate on specific technical rules.

Like the other operator bodies such as those of the TSOs for electricity and gas, the ENNOH will be required to develop a ten year network development plan for hydrogen, among others duties.

Until the ENNOH is established, a temporary platform is proposed under the lead of the Commission with the involvement of ACER and all relevant market participants, including the ENTSOG, ENTSO-E and the DSO entity. Until that time, ENTSOG will be responsible for the development of the network development plans, including hydrogen networks.

Methane emissions

In what is the first EU legislative proposal on methane emissions reduction in the energy sector, the Commission is proposing to require the oil, gas and coal sectors to measure, report and verify methane emissions, with strict rules to detect and repair methane leaks and to limit venting and flaring.

It also proposes global monitoring tools for methane emissions from imports of oil, gas and coal into the EU, including a public transparency database containing data reported by importers and operators and another showing methane hotspots globally.

Member states should also establish mitigation plans, taking into consideration methane mitigation and measurement of abandoned mine methane and inactive wells.

The methane reduction proposals target an 80% reduction by 2030 and it is proposed to review the regulation in 2025 with a view to making the measures more stringent.

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