Negotiators from different political groups in the European Parliament have finally agreed to exclude natural gas projects from EU funding eligibility, according to compromise amendments to the draft report by Zdzisław Krasnodębski (ECR, Poland) on the revision of the Trans-European Energy Networks (TEN-E) Regulation (347/2013) obtained on Thursday 16 September by EUROPE.
The TEN-E Regulation, dating from 2013, provides a framework for the formation of lists of ‘projects of common interest’ (PCIs) which allow trans-European energy infrastructure projects to benefit from certain advantages such as accelerated administrative processing and eligibility for funding from the ‘Connecting Europe Facility’ (CEF).
In order to align the TEN-E Regulation with the objectives of the European Green Deal, the European Commission had proposed, among other things, to exclude natural gas from its scope (see EUROPE 12623/3, 12618/9).
At the instigation of the EPP and ECR groups, the Parliament’s negotiators finally decided to provide for a temporary exemption for certain natural gas projects.
According to the latter, natural gas infrastructure projects that were already on the fourth or fifth list of PCIs (established under the current TEN-E Regulation) could retain this status and be eligible for the first list of PCIs to be established under the revised Regulation.
However, MEPs agreed that this exemption excludes the eligibility of these projects for EU financial support under the CEF. The other benefits of PCI status, however, would remain in place.
Hydrogen and ‘blending’
The compromise amendments also provide for a transitional period for converting natural gas infrastructure into hydrogen infrastructure.
Following the agreement between Member States (see EUROPE 12739/1), this transitional period would allow projects used for the transport or storage of a predefined mixture of hydrogen and natural gas or biomethane (‘blending’) to be eligible for EU funding until 31 December 2027 and for the other benefits of PCI status until 31 December 2029.
What is new compared to the position of the Member States is that project promoters will have to contractually commit to ensuring that these projects will cease to be natural gas infrastructure and become hydrogen facilities at the end of the transitional period.
CO2 infrastructure
Regarding CO2 projects, the compromise amendments suggest that the Regulation should cover not only those related to its transport (European Commission proposal), but also those related to its storage.
“The minimum capture rate in industrial installations shall be fixed according to best available technology per industry category set by the Commission and must be greater than 70-90%”, the text states.
Smart gas networks
MEPs also propose the creation of a new infrastructure category for smart gas networks “to support investments which integrate renewable and low-carbon gases, such as biogas, biomethane and hydrogen, into the network”.
As there is no established definition of low-carbon gases, the compromise amendments specify that eligible low-carbon gases “should comply with the requirements for low-carbon gases to be adopted by the Commission”. These requirements should include “a greenhouse gas emission reduction threshold” set by the European Commission.
Electrolysers and heating systems
For the electrolyser category, the project must have a capacity of at least 50 MW (the European Commission proposed 100 MW) provided by a single electrolyser or by a set of electrolysers forming a single coordinated project, the compromise amendments state.
Following an amendment by the Greens/EFA and Renew Europe, MEPs also agreed to create a new project category for heating and cooling systems as defined in the Energy Efficiency Directive (2012/27).
Governance
On the governance side, the amendments provide for the creation of a stakeholder committee to work on European energy infrastructure planning with the European Network of Transmission System Operators for Gas (ENTSO-G) and Electricity (ENTSO-E), as well as a role for the assessment of energy planning by the European Scientific Advisory Board on Climate Change established by the ‘Climate Law’ (see EUROPE 12703/1).
The compromise amendments and the draft report will be put to a vote in the Parliament’s Committee on Industry, Research and Energy (ITRE) on 27 September, with a view to a vote by all MEPs in October.
See the compromise amendments: https://bit.ly/2Xoe0vr and https://bit.ly/3Clu4Nk (Original version in French by Damien Genicot)