Wednesday

8th Feb 2023

EU unveils gas market reform, doubling down on hydrogen

  • 'One of the main goals is to establish a market for hydrogen' EU energy commissioner Kadri Simson said (Photo: Nord Stream 2 / Axel Schmidt)
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The EU presented a new package of legislation for the gas market on Wednesday (15 December).

According to vice-president Frans Timmermans, Europe "needs to turn the page" on fossil fuels, replacing them with renewable and low carbon gases, like hydrogen.

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Gases that bring about greenhouse-gas emission savings of at least 70 percent will be certified as "low carbon".

No hard deadlines for a natural gas phase-out are included in the plan, but in a previous assessment, the Commission estimated gas consumption should reduce by 32 to 37 percent before 2030.

To reach this goal, it has now banned long-term gas contracts beyond 2049. The Commission also aims to reduce natural gas usage by promoting hydrogen.

"One of the main goals is to establish a hydrogen market. We want Europe to lead the way for this important source of energy," EU energy commissioner Kadri Simson said at a press conference.

Cross-border tariffs are removed, making hydrogen trade more attractive. In addition, it will allow gas companies to blend up to five percent hydrogen into the gas supply.

A new governing body, the European Network of Hydrogen Operators (ENNOH), will be set up to promote hydrogen as a substitute for natural gas.

"Electricity alone cannot deliver all our future energy needs," Timmermans said, arguing low carbon gases are needed for industries like clean steel production or heavy-duty transport.

It can also serve as a storage facility to stock up excess wind and solar power production.

And - because it repurposes gas infrastructure - it is a cheap way to green the energy system, Timmermans has argued in the past.

But environmental groups have warned that the repurposing of gas infrastructure threatens to lock in fossil-fuel dependency and "reconfirm the central role of gas grid companies in deciding future gas investments."

"It has never been clearer that Europeans need to get off fossil gas. Instead, the commission has left consumers at the mercy of greedy gas companies, determined to keep investing in expensive gas grids we no longer need," Tara Connolly, senior gas campaigner at Global Witness, said.

Last month, the European Commission included an estimated €13bn worth of gas projects in its list of priority infrastructure projects.

On Wednesday, the EU reached a final deal to subsidise and fast-track the EastMed pipeline between Israel and Greece and the controversial Malta-Italy (Melita) pipeline.

This will connect a power station in Malta co-owned by businessman Yorgen Fenech, who this year has been charged with conspiracy in the murder of journalist Daphne Caruana Galizia.

It is part of the Trans-European Networks for Energy (TEN-E) regulation, also unveiled on Wednesday.

The gas market legislation still needs to be discussed and agreed upon by member states and the European Parliament.

"After coal, gas is the next fossil fuel to get rid of. But we should not make the mistake of replacing it one-on-one with hydrogen. Hydrogen is scarce and inefficient as an energy carrier," Green MEP Bas Eickhout said.

"The commission needs to clearly say what we can use hydrogen for and what infrastructure is needed for that."

Opinion

Why hydrogen is no magic solution for EU Green Deal

Why is the EU Commission promoting a lose-lose (pay more, get less) strategy rather than the straightforward use of green electricity, where it will deliver bigger CO2-reductions and for less money?

Hydrogen strategy criticised for relying on fossil fuel gas

Civil society organisations criticised that the commission is relying on early-stage technologies that require the continued use of fossil fuels, undermining the EU's 2050 climate-neutrality target set in the Green Deal.

Lobbyists push to greenwash EU rules for renewable hydrogen

A new report from NGO Global Witness reveals how the Hydrogen Europe industry association is lobbying top EU officials to weaken a key climate-focused law known as the Renewable Energy Directive - currently under revision.

Analysis

Hydrogen - the 'no-lose bet' for fossil-fuel industry?

The EU plans to label natural gas as 'green' in sustainable investment rules. From 2026 it will have to be blended with low-carbon gases like green hydrogen - but many scientists warn this is inefficient, costly and damaging to health.

Opinion

The return of Lula means now is the time for EU-Mercosur deal

The EU must realise the need for a trade agreement with Mercosur. The timing has never been better. The recent election of the president of Brazil, Lula da Silva, marks a fresh start to move forward on the Mercosur Agreement.

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