The European Commission has adopted a set of legislative proposals to decarbonise the European Union gas market while also ensuring energy security and slashing methane emissions.
But the package met a mixed response on Wednesday, with some observers accusing the commission of greenwashing even as others hailed the planned legislation as ushering in a golden age for clean hydrogen.
According to the commission, these proposals — assuming they become legislation — will underpin efforts to cut EU greenhouse gas emissions by at least 55% by 2030 and become climate-neutral by 2050.
At the heart of the proposals is a move to establish the world’s first market framework for hydrogen, while also paving the way for ending long-term contracts for unabated natural gas by 2049.
The contractual curb aims to “avoid locking” Europe into fossil fuel supplies and to create “more space” for clean gases.
But the measures did not go far enough for some. Tara Connolly, senior gas campaigner at non-profit Global Witness, was highly critical of the legislative proposals.
“Instead of putting the needs of people first and showing a bold vision of a transition to affordable, renewable heating for all, the commission has announced a masterclass in greenwashing. It has left consumers at the mercy of greedy gas companies, determined to keep investing in expensive gas grids we no longer need,” she said.
“National governments and the European Parliament need to pull out all the stops next year to make sure the final law gets (natural) gas out of our homes, kicks the fossil fuel industry out of the decision-making process, and puts us on a pathway to clean, renewable heating and power for everyone.”
Rita Tedesco, senior programme manager for energy systems at the Environmental Coalition on Standards — another non-profit — was equally scathing.
EU caved in to gas industry
“This day will go down in history as the moment when the EU gave in to the gas industry’s pressure, laying the foundations for a broad market uptake of hydrogen produced from fossil fuels and nuclear.”
She said EU member states and the European Parliament still have a chance to stop these “greenwashed” proposals, remarking that “it is a moment of truth for the clean energy transition.”
However, Jorgo Chatzimarkakis, chief executive of the Hydrogen Europe lobby group, took the opposite view and welcomed the commission’s plans, claiming the “golden age of hydrogen starts today” because the proposals will establish hydrogen as a traded commodity.
The lobby group said the proposals recognise hydrogen “as a separate energy carrier” able to mitigate climate change and an enabler to sector integration, while warning that the future evolution of policies, markets and financing “will make or break” the sector.
Announcing the commission's plans, Frans Timmermans, executive vice president for the European Green Deal, said: “Europe needs to turn the page on fossil fuels and move to cleaner energy sources. This includes replacing fossil gas with renewable and low-carbon gases, like hydrogen.
“We are proposing the rules to enable this transition and build the necessary markets, networks and infrastructure.”
To address methane emissions, he said: “We are proposing a solid legal framework to better track and reduce this powerful greenhouse gas, helping us to fulfil the global methane pledge (launched last month at COP26) and tackle the climate crisis.”
EU Commissioner for Energy Kadri Simson said the proposals aim to create the conditions needed for the green transition of the gas sector by boosting the use of clean gases, particularly hydrogen.
“A key element of this transition is establishing a competitive hydrogen market with dedicated infrastructure. We want Europe to lead the way and be the first in the world to lay down the market rules for this important source of energy and storage,” she said.
Simson also pointed out the EU is proposing “strict rules” on methane emissions from gas, oil and coal.
The goal is to slash emissions in these sectors by 80% by 2030 and to also “trigger action” on methane outside the EU.
“Our proposals also strengthen the security of gas supply and enhance solidarity between (EU) member states to counteract price shocks and make our energy system more resilient,” Simson said.
The EU has been hit by huge increases in gas prices this year through a lack of storage and lack of gas — mainly from Russia — to beef up stocks in time for winter.
“As requested by member states,” remarked Simson, “we will improve the EU's gas storage coordination and create the option for voluntary joint purchase of gas reserves.”
The commission's proposals take the form of regulations and directives and have been crafted to create the conditions for a shift from fossil natural gas to renewable and low-carbon gases — particularly biomethane and hydrogen — and strengthen the resilience of the gas system.
A key aim is to establish a hydrogen market by creating the right environment for investments and infrastructure development, including for trade with third countries.
The market rules, said the commission in a statement, will be applied in two phases, before and after 2030, and notably cover access to hydrogen infrastructures, the separation of hydrogen production and transport activities, and tariff setting.
A new governance structure in the form of the European Network of Network Operators for Hydrogen will be created to promote dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction, and elaborate on specific technical rules.
These national network development plans should be based on electricity, gas and hydrogen and should be aligned with member states’ energy and climate plans as well as the EU’s 10-year Network Development Plan, according to the commission.
It stressed that gas network operators must include information on infrastructure that can be decommissioned or repurposed, while there will be separate hydrogen network development reporting to ensure that construction of a hydrogen system is based on realistic demand projections.
“The new rules will make it easier for renewable and low-carbon gases to access the existing gas grid,” said the commission, “by removing tariffs for cross-border interconnections and lowering tariffs at injection points.”
These rules also aim to create a certification system for low-carbon gases, completing the work started in the EU’s Renewable Energy Directive with the certification of renewable gases.
The overarching goal is to ensure a level playing field in assessing the full emissions footprint of different gases and allow member states to compare and consider them in their energy mix.
Another priority is to establish market conditions that allow consumers to choose between renewables, low-carbon gases and fossil fuels.
In the meantime, to improve the resilience of Europe’s gas system and strengthen security of supply provisions, further integration of the storage market is called for so that geographic shortages can be dealt with.
The proposal extends current rules to renewables and low-carbon gases and introduces new provisions to cover cybersecurity risks.
To tackle methane emissions, the commission will require the oil, gas and coal sectors to measure, report and verify methane emissions. It also proposes strict rules to detect and repair methane leaks and to limit venting and flaring.
It also plans to use monitoring tools to ensure transparency of methane emissions from EU oil, gas and coal imports, a move that will pressure exporters to the EU to reduce or offset their own emissions, or look for other markets.
The commission said it will “engage in a diplomatic dialogue with our international partners and review the methane regulation by 2025, with a view to introducing more stringent measures on fossil fuels imports once all data is available.”
The new rules would require companies to measure and quantify asset-level methane emissions at source and conduct comprehensive surveys to detect and repair methane leaks in their operations.
In addition, the proposal also bans venting and flaring, except in narrowly defined circumstances.
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