FNB Gas position paper on the draft law regulating pure hydrogen networks in energy law

On February 10, 2021, the German government presented draft legislation to regulate pure hydrogen networks in the German Energy Industry Act (EnWG). The transmission system operators (TSOs) very much welcome the fact that the urgency to create a regulatory framework for hydrogen networks has been recognized and that the first legal foundations for pure hydrogen networks are being laid.

A positive aspect of the draft law is the inclusion of hydrogen in the target definition of the EnWG (§ 1). However, the TSOs do not regard hydrogen as an independent energy carrier alongside electricity and gas, but rather as a variant of gaseous energy carriers. The technology-open definition of hydrogen is also to be welcomed. In addition, the application of the DVGW rules and regulations to hydrogen was extended and the legal basis for the conversion of existing natural gas pipelines to hydrogen and for the construction of new hydrogen pipelines was created. This will set in motion the first important prerequisites for the development of a hydrogen infrastructure.

The bottom line is that the bill falls short. We need a regulatory framework that offers a long-term perspective for decarbonization and enables the coupling of sectors and access to hydrogen for all grid user groups, including the heating market. The approach of transitional regulation ignores the ambitious climate policy goals that it has set itself, as well as industrial policy goals. At best, the draft law is a starting signal for a short period of transition. Further improvements are possible and necessary in the parliamentary process. The central issue of financing must be resolved in this legislative period, and a framework must be created that provides legally secure and adequate conditions for investments in infrastructure that will be used for decades. The design of the announced regulations will be critical to whether hydrogen infrastructure measures can be initiated at all in the first half of this decade.

For the period after the transition, taking into account the then existing EU legal framework, a regulatory system should be envisaged that considers financing and network planning as a unit of the hydrogen network and the gas network in close coordination with the electricity network. Only then can an efficient and secure supra-regional hydrogen network be created in Germany, which is economically efficient and develops predominantly from the existing natural gas network.