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EU Energy Commissioner Kadri Simson. The European Commission hopes to smooth the market entry of cleaner gas molecules with a new framework.
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Unveiling a long-awaited market framework for hydrogen and other low-carbon gases Dec. 15, the European Commission eased the way for cleaner fuels into the gas market.
The Hydrogen and Decarbonized Gas Package is part of the EU's "Fit for 55" plan, under which it aims to reduce emissions by 55% by the end of the decade.
In most areas, direct electrification will be the most cost-effective and energy-efficient way to decarbonize energy demand, the commission said in its proposal. But where full electrification is unlikely to be technically or economically viable, hydrogen and low-carbon gases are important.
"We want Europe to lead the way [on hydrogen] and be the first in the world to lay down the market rules for this important source of energy and storage," EU Energy Commissioner Kadri Simson said in a statement.
Renewable and low-carbon gases today only represent a minor share in the EU energy mix. Access to the gas wholesale market and virtual trading are key prerequisites for unleashing their potential, the commission said in the package. "Abolishing costs for cross-border trade of those gases and facilitating connection of production facilities will also improve the business case," it said.
The commission defines renewable gases as gases made from biomass and hydrogen produced with renewables via electrolysis, also known as green hydrogen. Low-carbon gases must meet a 70% greenhouse gas emissions reduction compared to fossil gas, it said.
In July 2020, the EU committed to 40 GW of hydrogen electrolyzers by the end of the decade, and the new package is set to assist its implementation.
"To deliver those volumes to end users we need comprehensive markets and infrastructure to connect production and consumption," Commission Executive Vice President Frans Timmermans said during a Dec. 15 press conference presenting the plan.
'Golden age of hydrogen'
Under the commission's proposals, which require sign-off by the EU before they are adopted, cross-border tariffs for hydrogen will be removed to give the market time to ramp up, while charges at entry points of existing gas networks will be significantly reduced, all in a bid to make it easier for emerging green gases to access the infrastructure.
To kickstart demand, the new package also includes a 5% blending possibility for hydrogen in gas grids across Europe.
Meanwhile, to help promote dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction, and to "elaborate on specific technical rules," the commission wants to form a new European Network of Network Operators for Hydrogen, a group made up of grid operators.
One environmental organization criticized that governance decision. "Gas grid operators will still wield enormous influence — such as continuing to design the scenarios for new infrastructure," Alexia Falisse, law and policy adviser at nonprofit ClientEarth, said in a statement.
More broadly, the Brussels-based Environmental Coalition on Standards, or ECOS, questioned the move to promote low-carbon gases, which it said could include hydrogen derived from nuclear energy and fossil fuels. "This is a regrettable decision even if only meant as a transitional solution for the short to medium term," the group said Dec. 15.
The bar for what counts as low-carbon is also set too low, it added. "The commission has missed a crucial opportunity for laying a stepping-stone toward a total phaseout of fossil fuels, necessary to be in line with EU's climate goals," ECOS said.
Hydrogen lobby group Hydrogen Europe, which counts several electric utilities among its members, welcomed the commission's plan Dec. 15.
"The golden age of hydrogen starts today," CEO Jorgo Chatzimarkakis said in a statement. "This can be the legislative proposal that will establish hydrogen as a traded commodity."
Yet, much work is still to be done to bring hydrogen into all sectors of the economy, develop networks and secure investments, Chatzimarkakis said.
New methane rules
Ultimately, the EU's proposals will allow the bloc to wean itself off fossil gas, the commission said. But in the meantime, new measures were also introduced to limit methane emissions in energy production.
Upstream methane leaks represent a significant share of overall methane emissions in the energy sector. As such, the commission will order compulsory measuring and documenting of venting and flaring of methane in the oil, gas and coal sectors.
With this decision, the EU wants to make progress on new global commitments on methane agreed at the November 2021 United Nations Climate Change Conference, also known as COP26, held in Glasgow, Scotland, where signatories agreed to reduce methane emissions by 30% by the end of the decade from 2020 levels.
The commission estimates the new rules will mean methane emissions related to oil, gas and coal will be 80% lower in 2030 than they were last year, the EU's Simson said at the press conference. "The EU is a pioneer" on implementing its methane reduction strategy, Simson said.
ClientEarth's response to the methane rules was mixed. "Methane is a major foe in the climate fight and up until now it's been unregulated so it's a relief to see legislation specifically intended to tackle it," Falisse said. "But, incredibly, the main provisions in this new law don't apply to imports which make up 80% of EU methane consumption — that's a major blind spot."