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Picture courtesy of TAP

2 European energy policy
on hydrogen and gas infra­structure

Renewable and low-carbon fuels, including hydrogen, are one of the pillars of the EU Strategy on Energy System Integration1. Along with the “energy efficiency first” principle and with direct electrification, they are the necessary tools to achieve cost-effective decarbonisation. Further, the Hydrogen Strategy, adopted at the same time as the Strategy on System Integration, established a gradual trajectory to develop clean hydrogen and achieve its role in a climate-neutral European energy system by 2050.

In the context of an integrated energy system, renewable and low-carbon hydrogen, biogas and biomethane, are acknowledged as a solution for hard-to-abate sectors. Additionally, they can act as storage of otherwise unused variable renewable electricity production. Ultimately, they have a “nodal” role, interlinking gas and electricity production between themselves and with demand – like industry and transport.

The new legislative package on the internal markets of hydrogen and decarbonised gas establishes common rules covering supply, transport and storage.

It consists of a Regulation and of a Directive that entered into force on 4 August 2024:

  • The recast Regulation on decarbonised gas and hydrogen markets defines the framework for the future gas and hydrogen infrastructure to integrate a higher share of hydrogen and renewable gases;
  • The recast Directive on decarbonised gas and hydrogen markets aims at creating a certification framework; it sets a timeline for agreement on a definition for low-carbon hydrogen.

The rules are designed from a cross-sectoral and ­technology-neutral perspective and build on previous ­developments, such as:

1. The “Fit for 55” package, created to put in place policy enabling the EU to reach its climate goals. As a next development, in 2022, REPowerEU Plan2 aimed towards supply source diversification in a changing geopolitical context, including though the acceleration of hydrogen deployment, required for a system with a growing share of electricity.

2. General support for the integration of renewables and clean energy technologies through the ­European Climate Law and the European Green Deal, the rules for which were defined in the 2022 revision of the TEN-E Regulation.

3. The principle of market-based energy infrastructure development, for which legal context was created by unbundling rules laid down in the Third Energy Package.3

2 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52022DC0230
3 The Third Energy Package consists of two directives and three regulations, two of which concern natural gas markets: Directive 2009/73/EC concerning common rules for the internal market in natural gas and Regulation (EC) No 715/2009 on conditions for access to the natural gas transmission networks The Directive was recently repealed by Directive (EU) 2024/1788, valid starting August 2024, while the regulation is repealed by Regulation (EU) 2024/1789, applicable as of February 2025.

The revised EU-wide rules aim to create the right conditions and incentivise the development of a new cross-border hydrogen network and repurposed natural gas infrastructure for hydrogen in a cost-effective way. The 6th Union list – or the 1st Union list of PCIs and PMIs under the new TEN-E Regulation – was adopted by the EC in November 2023 and subsequently accepted by the European Parliament and the Council. The Union list includes hydrogen-related projects for the first time, with new natural gas infrastructure no longer eligible. The number of hydrogen projects on the Union list is significant – 65 out of a total 166 – and confirms the European commitment to build a hydrogen backbone.

Growing regulatory support for renewable electricity deployment goes hand in hand with the development of renewable hydrogen and power-to-gas, hydrogen storage and CCUS projects. The new Regulation (EU) 2024/1789 reflects this at network planning level. Thus, planning for hydrogen and natural gas will expressly be done in direct collaboration between network operators. In particular, hydrogen infrastructure is seen as a priority solution for carbon-intensive areas.