Gas and hydrogen market reform: EU legislators towards agreement

Brussels – On Thursday (7 December), the rapporteurs in the Industry and Energy Committee (ITRE) of the EU Parliament will decide whether to accept the proposal of the Spanish EU Council Presidency on the governance of the new hydrogen market.

On Monday, 27 November, the last trilogue – the negotiation meeting between the Parliament, the EU Council and the Commission – took place on the gas and hydrogen market reform package, which was presented nearly two years ago by the European Commission and includes a directive and a regulation. The co-legislators managed to conclude an agreement only on the directive, due to disagreements over one element in particular in the regulation: the governance of the future hydrogen market. On Friday, 8 December, the final trialogue is scheduled, in which the co-legislators together with the European Commission aim to conclude a final agreement on the regulation as well.

The Council would like to create a separate governance entity (ENNOH); while the Parliament would like to merge it with the existing gas governance entity (which would become the European Association of Gas and Hydrogen Transmission Operators – ENTSOG&H). For the Council – as emerges from a document of the Spanish presidency seen by Policy Europe – hydrogen governance “should be completely independent” from gas and methane governance and “should be based on new pillars and principles”. This would ensure ‘the promotion of dedicated hydrogen infrastructure, cross-border coordination, the construction of interconnection networks and the development of specific technical rules’. For the EU Parliament, unified governance “would improve system efficiency and integration of energy systems”, also generating efficiencies “in terms of costs for users”.

Reportedly, a meeting between the rapporteur and the shadow rapporteurs in the ITRE committee was scheduled for Thursday morning to decide on the strategy to be adopted the next day at the negotiating table with the Council. A possible compromise envisaged by the Spanish presidency of the EU Council – as the Spanish presidency’s document also shows – could be the creation of a separate entity but with strong coordination between the two bodies on the most important elements. And it cannot be ruled out that in the end, during Thursday’s meeting, the EU Parliament rapporteurs might finally converge on the Spanish Presidency’s proposal.

The reform is part of the Fit for 55 climate package and, more generally, is aimedt at facilitating the penetration of renewable and low-carbon gases into the energy system, paving the way for the deployment of hydrogen as an energy source, with the goal of reaching the EU’s climate neutrality target in 2050.

English version by the Translation Service of Withub