On the evening of Monday 27 November, the Council of the European Union and the European Parliament reached agreement on the ‘gas’ package Directive (one Directive, one Regulation) aimed at defining common rules for the internal markets in renewable and natural gases and hydrogen. However, there were still too many points of disagreement, particularly on governance, to reach agreement on the Regulation (see EUROPE 13301/7). A further meeting is scheduled for 8 December.
Directive
The aim of the Directive is to facilitate the penetration of renewable and low-carbon gases into the energy system, enabling a gradual shift away from natural gas, with a view to achieving climate neutrality by 2050.
In the agreement, the co-legislators set out the division between Transmission System Operators (TSOs) and Distribution System Operators (DSOs) for hydrogen.
They then established that the Member States will decide whether the network operators for hydrogen, natural gas and electricity can belong to the same company.
Regarding ‘horizontal blending’, which was essentially the last point of disagreement to be resolved at this final negotiating session, the co-legislators reached a compromise by retaining the article concerned, which defines the legal separation between hydrogen network operators and electricity network operators, but excluding distribution network operators (DSOs).
“Converting a gas pipeline into a hydrogen ‘pipeline’ will be cheaper and quicker than building a new ‘pipeline’, which is why we only have horizontal blending for transmission system operators (TSOs) and only where the Member States want this blending”, explained Jens Geier (S&D, German), general rapporteur, to a handful of journalists.
The agreement also includes greater coordination between the development plans for the hydrogen, electricity and natural gas networks.
These plans will be based on sectoral integration, the principle of “energy efficiency first” and the priority given to the use of hydrogen in sectors that are difficult to decarbonise.
With regard to the protection of vulnerable groups, the agreement stipulates that Member States shall ensure that customers have the right to change supplier or market player on a non-discriminatory basis in terms of cost, effort and time.
It also includes provisions for potential disconnections to protect customers from the future decommissioning of the gas network or its reallocation to hydrogen.
“The appropriate organisations must be consulted, the customer must be informed in advance and the specific needs of vulnerable customers will be taken into account”, says an EU Council press release.
Finally, power is left to the Member States as to how to protect vulnerable customers from disconnections and how to help them.
Regulation
With regard to the Regulation, the co-legislators managed to make progress on certain points, such as setting the “blending” rate at a maximum of 2% on cross-border interconnections.
Negotiations are also progressing on the demand aggregation platform, which could only be extended to hydrogen under certain conditions and in a separate legislative proposal.
With regard to the solidarity mechanism between Member States, price ceilings could be introduced to enable the smallest Member States to benefit from the mechanism.
No agreement has yet been reached on the biomethane production target or on tariffs, in particular the abolition of tariffs for access to transmission networks at interconnection points for natural gas, as called for by Parliament.
However, the biggest area of disagreement remains governance. Parliament is insisting that ENTSOG&H should come into being, while the EU Council and the Commission still want a separate entity for gas (ENTSOG) and hydrogen (ENNOH).
A mandate has been given at technical level to pursue all the points still outstanding, with a strong request from Parliament to the EU Council and the Commission to return to the negotiating table on governance. (Original version in French by Pauline Denys)