The co-legislators met late in the afternoon of Monday 27 November for a new session of inter-institutional negotiations on the gas package (fourth session for the directive (see EUROPE 13270/2), fifth session for the regulation (see EUROPE 13287/11), which are intended to be conclusive. At the time of writing, discussions were still ongoing.
Proposed in December 2021, this package aimed at reforming the internal markets for renewable and natural gases and for hydrogen has been the subject of negotiations between the three EU institutions since the beginning of June 2023 (see EUROPE 13192/25).
Directive
Negotiators are expected to reach an agreement on the directive. However, one important point remained unresolved before the meeting: the horizontal ‘decoupling’ of hydrogen network operators.
Parliament was still opposed to the legal separation of hydrogen network operators from electricity network operators, while the EU Council felt that this would make it possible to clearly separate the gas and hydrogen sectors and, in particular, avoid cross-subsidisation.
A solution could be found either by deleting the article concerned, as Parliament would like, or by preserving this separation and including a ‘grandfathering clause’ for small gas distribution system operators (DSOs), which can then operate networks in the hydrogen sector without legal separation, or by delaying the application of the article concerned for five years after the entry into force of the directive, and applying it only to TSOs for hydrogen, excluding DSOs for hydrogen.
Regulations
According to several sources close to the matter, the settlement discussions are proving more complex. Following the last political trilogue and technical discussions, many points remained unresolved.
With regard to coal and carbon-intensive regions, Parliament wanted the Commission to be obliged to encourage the spread of renewable and low-carbon gases, particularly in these regions.
In order to satisfy certain Member States, the EU Council proposed replacing the article in question with a ‘recital’ reflecting these objectives.
As far as biomethane is concerned, the EU Council still categorically rejected a biomethane production target of 35 billion cubic metres by 2030 and proposed, in particular, a new ‘recital’ integrating biomethane into the national energy-climate plans.
With regard to network tariffs, the Parliament proposed abolishing tariffs for access to the transmission networks at interconnection points between Member States for natural gas, while the EU Council continued to maintain that abolishing these tariffs for natural gas would be detrimental to the functioning of the entire natural gas sector. The Council also wanted each national regulatory authority to retain the right to set its own tariff.
For blending, the percentages of authorised hydrogen blends still needed to be set. The EU Council proposed 2%, while Parliament proposed 3%. A percentage could be found between the two.
As regards governance, the Council Presidency proposed maintaining the separate entities (ENTSOG and ENNOH), as initially proposed by the Commission, while assuring the Parliament of enhanced cooperation between the two entities, as well as the possible involvement of the European Network of Transmission System Operators for Electricity (ENTSOE).
With regard to demand aggregation, i.e. the extension of an instrument introduced on a temporary basis to deal with the crisis in 2022, the Council proposed, following negotiations with Parliament, to establish instead a voluntary regulatory framework for the gas market, while asking the Commission to work on the potential extension of the mechanism to hydrogen, whose market is not considered sufficiently mature at present, in a separate legislative proposal.
Finally, the co-legislators had to agree on the deadline for the start of the regime for regulated third-party access to hydrogen networks and storage. The Commission proposed 2030, as did Parliament, while the Council proposed 2035. (Original version in French by Pauline Denys)