The European Commission has adopted new proposals aimed at creating a commodity market for hydrogen, with new rules governing access to infrastructure and the creation of a certification system for low-carbon gases.

The proposals form part of a wider package designed to transition the EU from fossil natural gas to clean gases, namely hydrogen and biomethane, while preserving security of supply. They also include action to cut methane emissions.

“With today's proposals, we are creating the conditions for the green transition in our gas sector, boosting the use of clean gases,” says Energy Commissioner Kadri Simson.

“A key element of this transition is establishing a competitive hydrogen market with dedicated infrastructure. We want Europe to lead the way and be the first in the world to lay down the market rules for this important source of energy and storage.”

“The golden age of hydrogen starts today” Chatzimarkakis, Hydrogen Europe

The proposals also cover infrastructure needed for trade with third countries. The EU—and especially Germany—will rely heavily on clean hydrogen imports in its push for net-zero emissions. This is despite an EU target of 40GW of electrolyser capacity by 2030, producing 10mn t/yr of green hydrogen.

The proposed new hydrogen market rules will be applied in two phases, with the second phase starting after 2030. The rules cover access to hydrogen infrastructure, production and transport, as well as tariff-setting.

A new governance structure called the European Network of Network Operators for Hydrogen will be created to promote dedicated hydrogen infrastructure, cross-border coordination and the construction of interconnectors.

Cutting off the gas  

The package also includes a proposed end-date for contracted natural gas supplies.

“In order to avoid locking Europe in with fossil natural gas and to make more space for clean gases in the European gas market, the Commission proposes that long-term contracts for unabated fossil natural gas should not be extended beyond 2049,” the Commission says.

The proposals include steps to make it easier for renewable and low-carbon gases to access the existing gas grid by removing tariffs for cross-border interconnections and lowering them at injection points. A certification system for low-carbon gases is also proposed.

“This will ensure a level playing field in assessing the full greenhouse gas emissions footprint of different gases and allow member states to effectively compare and consider them in their energy mix,” the Commission says.

The proposals must proceed through a parallel legislative process in the Council of the EU and the European Parliament before they can become law.

Golden age of hydrogen

Industry lobby group Hydrogen Europe says the proposals give a major push to  the development of Europe’s internal market for hydrogen. The package provides clear policy incentives for ensuring hydrogen is at the forefront of the EU’s decarbonisation efforts while channelling investments into dedicated infrastructure.

2049 – Proposed end-date for contracted unabated natural gas

“The golden age of hydrogen starts today: this can be the legislative proposal that will establish hydrogen as a traded commodity,” says Jorgo Chatzimarkakis, CEO of Hydrogen Europe.

“A lot of work is ahead of us to bring hydrogen to all sectors of the EU economy, developing a functioning hydrogen network, and secure investments in hydrogen projects.”

Methane

The package also includes the EU’s first legislative proposal on methane emissions reduction in the energy sector. The proposals call for the creation of a new EU legal framework to ensure the highest standard of measurement, reporting and verification  of methane emissions.

The new rules would require companies to measure and quantify their asset-level methane emissions at source and carry out comprehensive surveys to detect and repair methane leaks in their operations. In addition, the proposals call for a ban on venting and flaring “except in narrowly defined circumstances”.

Strict upstream rules on methane emission accounting are considered vital in assessing and verifying the carbon intensity of blue hydrogen.

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Author: Stuart Penson