FNB Gas Position on the EU Hydrogen and Decarbonised Gas Market Package

The transmission system operators welcome in principle that the European Commission, within the framework of its proposals on common rules for the internal markets for renewable gases and natural gas as well as hydrogen, wants to create the mandatory and timely necessary regulatory framework for the ramp-up of the hydrogen market in the EU.

In particular, the planned integration of the regulations governing the future hydrogen infrastructure into the existing legal framework for gas is sensible and correct in the view of the transmission system operators. For reasons of cost and time efficiency, the EU’s hydrogen infrastructure will consist largely of existing and converted gas pipelines. It is therefore logical that the regulatory framework for gases (methane and hydrogen) is consistently regulated and sets clear guard rails for the conversion process of infrastructure operators.

The transmission system operators welcome the European Commission’s basic approach of allowing the member states more flexibility during a transitional phase in order to prevent excessive bureaucracy from slowing down the market ramp-up. For this reason, we believe it makes sense to regulate the design of specific detailed technical regulations on network access not within the framework of the present legislative package, but only in network codes based on it. Whether and to what extent these regulations will come into force by December 30, 2030, should be decided on the basis of the market maturity achieved.

We would like to point out that the assessment of the European Commission’s proposals by the transmission system operators was prepared before the start of the war in Ukraine and thus does not take into account the current geopolitical impact on the German and European energy markets. Given the current situation, efforts must be significantly expanded and, above all, accelerated in both the development of the hydrogen economy and the diversification of energy supply sources. Gas infrastructure will play a crucial role in both. It should therefore be examined all the more whether the EU Commission’s proposals take appropriate account of the goal of a rapid transformation of the energy market in the interests of security of supply and climate protection – especially against the background of the new situation. From the point of view of the transmission system operators, this is currently not the case. In particular, the fundamental separation between methane and hydrogen networks through the proposed regulations on unbundling, financing, costing and charging, as well as network development planning, will create significant hurdles and risks for the development of the infrastructure for the transport of hydrogen and prevent or at least significantly delay a rapid market ramp-up for hydrogen. Basic approaches to more speed and efficiency can already be seen in the attached evaluation.

In the following, we address the EU Commission’s proposals for the development of a hydrogen infrastructure. In a separate statement, the transmission system operators comment on the drafts on security of supply and the recording of methane emissions also submitted by the EU Commission as part of the gas market package.