EU's Groundbreaking Hydrogen and Gas Market Package for Sustainable Energy Transition
Key Ideas
- The European Council has approved new regulations to establish common internal market rules for renewable and natural gases, focusing on developing the hydrogen market and infrastructure.
- The package aims to promote the shift towards renewable and low-carbon gases, particularly hydrogen, to meet the EU's decarbonization goals.
- Member states will provide tariff discounts and incentives to facilitate market and system integration, ensuring a just transition and setting up support mechanisms for the hydrogen market for five years.
The Council of the European Union has authorized a comprehensive regulation and directive to standardize internal market rules for renewable and natural gases and hydrogen. This initiative aims to reform existing EU gas legislation and promote the development of the hydrogen market and infrastructure. The package includes specific guidelines for the transport, supply, and storage of natural gas and hydrogen, emphasizing integrated network planning under the principle of 'energy efficiency first.' To support the transition to renewable and low-carbon gases, especially hydrogen, member states will offer tariff discounts and incentives for market and system integration. Long-term contracts for fossil gas will be phased out by 2049 to align with decarbonization objectives. Additionally, a voluntary mechanism will be implemented to boost the hydrogen market for five years. The regulation and directive, part of the Fit for 55 legislative batch, were proposed by the European Commission in December 2021, with negotiations concluding in November and December 2023. Once signed and published, the rules will take effect within six months to two years, with member states adapting their national legislation accordingly.