EU Adopts New Rules to Decarbonise Gas & Build Hydrogen Market

EU Adopts New Rules to Decarbonize Gas & Build Hydrogen Market

EU Adopts New Rules to Decarbonize Gas & Build Hydrogen Market

The European Council adopted a new regulatory package which establishes common market rules for renewable gas, natural gas and hydrogen, aimed at advancing Europe’s shift to renewable and low carbon gases and shifting away from fossil fuels. This while supporting the European Union’s decarbonization goals.

This announcement marks the last major step towards the final adoption of the new regulation, following the legislation’s approval in April by the EU Parliament. The new regulation follows a series of proposals put forward by the European Commission in December 2021 aiming to decarbonize the EU gas market, as part of the European Green Deal, and supporting the EU’s goal to achieve climate neutrality by 2050, and the ‘Fit for 55’ roadmap, which is the EU’s proposed strategy to cut greenhouse gas (GHG) emissions by 55% by 2030.

The rules are also targeted to support the Commission’s REPowerEU strategy to end the EU’s reliance on Russian fossil fuels. The new regulation supports the establishment of common internal market rules for renewable and natural gases and hydrogen, and mandates national network development plans based on joint scenarios for electricity, gas, and hydrogen. The Commission commits itself to a regulation which will help enable the uptake of renewable and low-carbon gases through the facilitation of connection and access to the existing gas grid, while establishing a connection and access to the existing gas grid, hence allowing for consistency in assessing the emissions footprint of different gases. This will enable member states to compare and consider them in their energy mix.

The new regulation includes provisions aimed at phasing out fossil fuels, with long-term contracts for unabated fossil gas directed to not last beyond 2049. The regulation includes rules supporting the promotion of the penetration of renewable and low carbon gases, particularly hydrogen, in coal and carbon-intensive regions, including tariff discounts for renewable and low carbon gas, and the establishment of a voluntary mechanism to support the hydrogen market.

The regulation will become applicable six months after its publication in the Official Journal of the European Union, with member states given two years to transpose national legislation in line with the new provisions. In his reaction to the Council’s adoption of the new regulations, EU Commissioner for Energy Kadri Simson stated that: “Once largely dependent on Russian supplies, Europe is now moving on to the electricity and gas markets of the future, where there is no space for Russian gas and where renewables, clean gases and hydrogen have a central role.”

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