Council signs off on gas and hydrogen market package

The Council adopted a regulation and a directive establishing common internal market rules for renewable and natural gases and hydrogen and reforming the existing EU gas legislation.

The new rules will help make the shift to renewable and low-carbon gases, in particular hydrogen, in the energy system, with a view to achieving the EU’s decarbonisation targets.

Designing the gas and hydrogen market

The gas package sets out solid rules for the organisation of the natural gas market and establishes a strong framework for the development of the future hydrogen market, including for dedicated hydrogen infrastructure. It contains specific rules for the transport, supply and storage of natural gas and hydrogen.

The new rules call for integrated and transparent network planning across the EU, under the principle of ‘energy efficiency first’ and with a forward-looking approach. Gas and hydrogen network operators will prepare a 10-year EU network development plan.

This texts also paves the way for a permanent demand aggregation platform.

Switching to renewable gas

In order to ensure the phase-out of fossil fuels, long-term contracts for fossil gas will no longer be concluded as of 2049. The new rules promote the penetration of renewable gas and low-carbon gas, in particular hydrogen in coal and carbon-intensive regions. Member states will provide for tariff discounts and incentives, in order to facilitate their market and system integration, especially for the nascent hydrogen market, and so to ensure a just transition.

A voluntary mechanism will also be set up to support the hydrogen market for five years.

Protecting customers from energy poverty

Vulnerable customers and customers affected by energy poverty will be better protected thanks to the new rules adopted today, which include a focus on remote areas. Measures by member states include protection from disconnections and appointing suppliers of last resort to ensure continuity of supply.

Next steps

The regulation and the directive will now be signed and published in the Official Journal of the European Union.

The regulation will become directly applicable six months after its publication.

As regards the directive, member states will have two years to adapt their national legislation to the provisions of the directive.

Background

The hydrogen and decarbonised gas markets package is part of the Fit for 55 batch of legislation and aims to update the existing regulation and directive on gas adopted in 2009.

The updated regulation and directive, both formally adopted today, were put forward as a proposal by the Commission on 15 December 2021.

Negotiations with the European Parliament on the final shape of the texts started on 1 June 2023. A final deal on the directive was reached on 27 November and on the regulation on 8 December 2023.