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    EU outlines plans to decarbonise gas market


The European Commission wants to spur the development of hydrogen and other low-carbon gases, while also taking aim at methane emissions.

by: Joseph Murphy

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EU outlines plans to decarbonise gas market

The European Commission published a series of legislative and regulatory proposals on December 15 aimed at decarbonising its natural gas market.

The EU executive proposed both regulation and a revised directive designed to accelerate the shift from natural gas to lower-carbon gases like hydrogen and bio-methane.

"One of the main aims is to establish a market for hydrogen, create the right environment for investment, and enable the development of dedicated infrastructure, including for trade with third countries," the commission said in a statement. 

The market rules will be introduced in two phases before and after 2030, and will cover access to hydrogen infrastructure, the separation of hydrogen production and transport activities, and tariff setting. A new governing structure known as the European Network of Network Operators for Hydrogen (ENNOH) will also be set up to promote dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction. That body will also elaborate on specific technical rules.

The proposal envisages that national network plans will be based on a joint scenario for the electricity, gas and hydrogen markets, aligned with bloc climate targets. Gas network operators will have to report information on the infrastructure that can be decommissioned or repurposed, and there will be separate reporting for hydrogen to ensure that the network for the fuel is developed based on a realistic forecast for demand.

The commission said its new rules would make it easier for renewable and low-carbon gases to enter the existing grid, by scrapping tariffs for cross-border interconnections and reducing tariffs at injection points. A certification system for renewable gases will also be established, and the full greenhouse footprint of all gases will be considered to ensure a level playing field. 

Notably, the commission said that no long-term contracts for unabated gas supplies should be extended beyond 2049, to avoid "locking Europe in" to the fuel for too long. It also said it would seek to replicate provisions in the electricity market that allow consumers to switch suppliers and get accurate pricing information more easily. This, it said, would allow consumers to more easily switch from natural gas to renewable and low-carbon gas.


Taking aim at methane emissions

As anticipated, the EU has published another proposal to reduce methane emissions from the energy sector. Agriculture is a bigger source of anthropogenic methane emissions, but the EU argues that efforts must be concentrated on the energy industry as this is where the biggest reductions can be made at a relatively low cost. The commission wants to introduce strict rules for detecting and repairing methane leaks, and introduce databases and monitoring tools to accurately quantify the emissions associated with imports of oil, gas and coal into the EU.

The proposal would also create a new EU legal framework to "ensure the highest standard of measurement, reporting, and verification (MRV) of methane emissions," the commission said. This would mean companies having to measure and quantify their asset-level methane emissions at the source and carry out comprehensive surveys to find and repair leaks.  It also wants to ban venting and flaring, and calls for member states to have plans to mitigate methane emissions from abandoned production sites.

The commission will tackle methane emissions from imported oil, gas and coal in two phases. First, importers will have to submit information about how their suppliers quantify their emissions. It will also use a transparency database and a global monitoring tool, namely satellites, to show how different countries and energy companies perform in curbing their methane emissions.

Under the second phase, the commission will look to introduce more stringent measures on methane emissions associated with imported energy by 2025, after holding diplomatic talks with key energy partners. In the gas sector, these partners will include Russia and Norway, the bloc's two biggest gas suppliers, as well as key LNG exporters such as Qatar and the US.