Comments on the hydrogen and decarbonised gas market package

KEY MESSAGES

• Setting zero cross-border tariffs at interconnection points for hydrogen transport networks is not the solution. Clear and transparent tariff rules are crucial for hydrogen networks, and zero cross-border tariffs at interconnection points won’t be enough for the upscale of the hydrogen market. Public support may be necessary, but it should be directed and adapted to avoid distortion for other grid users and bias in sectoral integration.

• Alike for hydrogen, including specific, sub-targets for biomethane in the legislation may be questionable. Binding sub-targets for renewable gas development risks complicating the legislation. Market participants should have the freedom to choose the best path for decarbonisation objectives, renewables as a whole being a key enabler, whatever their underlying energy carrier.

• Emergency Gas market regulations should remain temporary. The ITRE committee included some provisions from Council Regulation 2022/2576 released in December 2022. Enshrining permanent reporting obligations for LNG price assessment and security of supply provisions in the Hydrogen and decarbonised gas market package will create increased administrative burdens without benefits for companies and suppliers.

• Creating a separate natural gas European entity for distribution system operators should be prioritized. Keeping the current EU DSO Entity for electricity and creating a separate EU entity for natural gas distribution system operators is the best way to improve efficiency and ensure consistency with the TSO organization model. Once established, both entities should cooperate closely.

• The hydrogen uptake should be cost-efficient. The expansion in the use of hydrogen should rely on having a cost-efficient infrastructure development, a level playing field for network users, and prioritizing renewable and low-carbon hydrogen in hard-to-decarbonize sectors.