Transmission system operators see private investment in hydrogen infrastructure development in jeopardy: new EU legislation must not create hurdles to decarbonization

• Unbundling: All gas network operators should also be allowed to own and operate hydrogen networks
• Regulation: Common rules for natural gas and hydrogen networks would enable synergies and economically efficient development of energy infrastructures
• Methane emissions: EU regulation should lay foundations for harmonized recording

Dr. Thomas Gößmann, Chairman of the Board of FNB Gas, comments on the EU gas market package now presented by the EU Commission:“It is high time that a reliable regulatory framework is created for the development of the hydrogen infrastructure. The network operators, like the hydrogen customers and producers, are waiting in the wings. We now need targeted decisions from Brussels that support the rapid market ramp-up.”

The transmission system operators (TSOs) are very critical of the planned regulations on ownership unbundling. 11 of 16 transmission system operators in Germany are unbundled under the ITO (Independent Transmission Operator) model. Although even the EU Commission recognizes the ITO model as effective in the electricity and natural gas sectors, its plans for hydrogen network operators no longer provide for this type of unbundling from 2031. Instead, full ownership unbundling is to apply to them. This means that existing gas TSOs with ITO certification would not be allowed to operate and own hydrogen networks after 2031. Dr. Thomas Gößmann commented: “The ITO model has proven its effectiveness in the natural gas sector for many years. The Commission’s plans represent a deep intervention in the property rights of companies, with concerns about proportionality and the subsidiarity principle.”

This approach by the EU jeopardizes the German concept of building the future hydrogen infrastructure from the natural gas grid, because the conversion of the existing natural gas infrastructure to the transport of hydrogen is prevented by the proposed regulation for ITOs. The majority of all financial investors and insurance companies, as well as municipal shareholders, are thus virtually excluded as shareholders in the development of the hydrogen infrastructure, although they are indispensable for financing the energy transition. Dr. Thomas Gößmann: “The planned regulations represent a clear negative incentive: Investments in the conversion of natural gas networks are in danger of not materializing. This would be a bitter setback for the development of a hydrogen infrastructure in Germany and thus for the EU decarbonization strategy as a whole.” The TSOs therefore appeals to the negotiators in Brussels to support the continuation of the ITO model for hydrogen networks in European legislation.

The TSOs also clearly criticize the proposed regulations on horizontal unbundling between gas and hydrogen network operations. Dr. Thomas Gößmann: “Horizontal unbundling hinders efficient and integrated network planning and the use of undisputed synergies between the operation of hydrogen and natural gas networks.”

TSOs have already made advance payments for methane emission measurements

The also on 15.12. published draft by the European Commission on the future regulation of methane, is viewed positively by the TSOs. The basis for further, successful reduction of methane emissions is precise, comparable and reproducible emission data from the TSO’s extensive network. Uniform, EU-wide standards for recording these methane emissions will improve transparency and allow emission sources to be systematically identified and eliminated even earlier. Full harmonization with international reporting requirements under OGMP (the Oil and Gas Methane Partnership under the UN umbrella) should be sought.

Last year, as part of a measurement initiative supported by an independent, international measurement expert, the TSOs carried out the most extensive coordinated measurement of methane emissions in the German gas transmission network to date and systematically recorded diffuse methane emissions for the first time. “The TSOs take a responsible approach to the issue of methane emissions. It is a key concern of ours to avoid methane emissions even further than before. By the end of 2025, the members of FNB Gas aim to reduce methane emissions for the entire German gas transmission network by 50 percent compared to 2015.” concludes Dr. Gößmann.