EU's Decarbonisation Package for Hydrogen and Gas Markets
Key Ideas
- EU introduces new regulations (H2 Regulation and H2 Directive) aiming to decarbonise gas markets by 2050.
- Focus on incentivising renewable and low-carbon gases while disincentivising natural gas use.
- Definition of 'low-carbon gas' established, including criteria for emission reduction compared to fossil fuels.
- Creation of a dedicated regulatory framework for hydrogen infrastructure and operations to promote competitiveness.
The EU's legislative hydrogen and gas decarbonisation package, effective from August 4, 2024, includes the Regulation on the internal markets for renewable gas, natural gas, and hydrogen (H2 Regulation) and the Directive on common rules for these markets (H2 Directive). The package updates gas market regulations to fit the EU's energy mix objectives for 2050, with a focus on renewable and low-carbon gases. Hydrogen is highlighted as vital for decarbonising heavy transport sectors and energy-intensive industries where electrification is challenging. While renewable hydrogen remains limited, the H2 Directive stresses the role of low-carbon hydrogen in meeting climate goals. Key aspects include incentivising renewable gas usage, restricting new natural gas contracts post-2049, and defining low-carbon gas criteria. The package also outlines a dedicated regulatory framework for hydrogen infrastructure development, ensuring fair access and operational guidelines. These measures aim to steer the gas industry towards a greener future in alignment with the EU's climate targets.