As part of the European Green Deal, the European Commission announced a legislative proposal on 15 December 2021 to revise (recast) the 2009 EU gas regulation. This is part of the hydrogen and decarbonised gas markets package, which also includes a revision of the 2009 EU gas directive. The gas regulation is part of the third energy package that set the legislative framework for the EU's internal energy market. Whereas the electricity component of the third energy package was revised in 2019 to align it with the EU's more ambitious climate and energy goals, the gas component of the third energy package has so far undergone only targeted revisions. 

The main elements that the Commission proposed to change in the recast EU gas regulation:

• The scope and definitions in the regulation are modified to incorporate renewable gases and hydrogen as key components of the future gas market.
• Existing EU gas market principles of third-party access, unbundling of transmission and distribution system operators, and independent regulatory authorities are refined and extended to cover hydrogen and renewable gases. Tariff discounts of 75 % are to be applied to hydrogen and renewable gases seeking to access the gas grid.
  
• New rules are introduced on firm capacity for hydrogen and renewable gases, hydrogen blending with other gases, and cross-border coordination on gas quality.
• A comprehensive legal framework for cross-border EU hydrogen networks is developed, including the establishment of network codes and guidelines. A new European Network of Network Operators for Hydrogen (ENNOH) is to be created and cooperate closely with ACER, ENTSO-E and ENTSO-G. ENNOH should formulate a 10-year network development plan for hydrogen.
  

In the European Parliament, the file was referred to the Committee on Industry, Research and Energy (ITRE), which appointed Jerzy Buzek (EPP, Poland) as its rapporteur. The draft report was published in June 2022 and opened to amendments until July 2022. The ITRE committee adopted a final report on 9 February 2023, together with a mandate to enter into interinstitutional negotiations, which has been confirmed by the plenary session in March 2023. 

The ITRE report took on board the new REpowerEU targets set by the Commission in May 2022, and would oblige Member States to collectively ensure at least 35 billion cubic meters of sustainable biomethane by 2030. This would be produced and injected into the natural gas system, annually, with the aim of replacing 20% of Russian natural gas imports. MEPs also proposed to reform the European Network of Transmission System Operators for Gas (ENTSOG) to additionally cover Hydrogen Network Operators. The new ENTSOG&H would be responsible for the EU ten-year network development plan for gas and hydrogen networks. The ITRE report included a permanent mechanism for Member States to coordinate their gas purchases. This was consistent with the principles of an emergency temporary mechanism to coordinate gas purchases foreseen by Council Regulation (EU) 2022/2576 of 19 December 2022. 

The Council of the EU adopted its general approach at the energy ministers meeting on 28 March 2023. The Council introduced a mechanism allowing Member States to take exceptional temporary measures to limit access to capacities for gas and LNG from the Russian Federation and Belarus, with the aim of reducing dependency on Russian fossil fuels, in line with the REPowerEU objectives. The Council's general approach gave more flexibility to Member States to set tariffs for a dedicated hydrogen network and tariff discounts for renewable gases and low-carbon gases accessing the natural gas grid. The Council added provisions on certification of storage system operators as well as a 100 % discount for tariffs on LNG and natural gas storage, in line with the EU Regulation on Gas Storage adopted on 29 June 2022. The Council supported the Commission's proposal to establish a dedicated European Network of Network Operators for Hydrogen (ENNOH) and specified the rules of participation for certified operators from the Member States.

The Parliament and the Council reached a provisional agreement on 8 December 2023. The agreement includes the extension of the demand aggregation mechanism for gas that would still be voluntary for Member States. The platform is open to Energy Community countries and the suppliers from Russia or Belarus are not allowed to use the mechanism. Additionally, there will be a voluntary mechanism for support to market development for hydrogen (as a pilot project for five years), in line with the European Hydrogen Bank.

The regulation includes the possibility for Member States to restrict imports of gas from Russia and Belarus, whether via pipeline or LNG. The agreement contains provisions to implement the solidarity principle in the event of a crisis, in case of an absence of bilateral agreements. Through a voluntary mechanism, a member state may request another member state currently not experiencing supply shortages to provide volumes of gas by applying market-based measures. The agreement envisages the establishment of the European Network of Network Operators for Hydrogen (ENNOH), as suggested by the Commission. By the end of 2029, the Commission will assess the option of integrating the three European networks (ENTSOs) for hydrogen, electricity and gas. Finally, the agreement does not set a target for biomethane, but calls to increase its production.

The ITRE committee approved the provisional agreement on 23 January 2024 and the plenary on 11 April 2024. The Council approved the agreement on 21 May 2024. The final act was signed on 13 June 2024. Regulation on the internal markets for renewable gas, natural gas and hydrogen was published in the Official Journal on 15 July 2024 and entered into force on 4 August 2024. 

References:

• Regulation (EU) 2024/1789 on the internal markets for renewable gas, natural gas and hydrogen
• EP Legislative Observatory, Procedure file on Gas and hydrogen markets regulation, 2021/0424(COD)
• European Commission, Proposal for a regulation on the internal markets for renewable and natural gases and for hydrogen (recast), COM(2021) 804 
• Regulation (EC) 715/2009 of 13 July 2009 on conditions for access to the natural gas transmission networks (consolidated version incorporating subsequent revisions)
• European Commission, Communication on the European Green Deal, COM/2019/640

Further reading:

• European Parliament, EPRS, Revision of the third energy package for gas: Decarbonising the gas market. Regulation 715/2009/EU and Directive 2009/73/EU, Briefing, December 2021.
• European Parliament, EPRS, Recast EU regulation on gas and hydrogen networks, Briefing, February 2024.

Author: Monika Dulian, Members' Research Service, legislative-train@europarl.europa.eu

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