EU legislators on Friday (8 December) struck a political agreement on the final piece of the Union’s hydrogen policy, establishing a grid planning body that will gradually become independant from existing gas network operators.

The propsed “hydrogen and decarbonised gas” package, tabled in December 2021 by the European Commission, seeks to promote low-carbon and renewable gases as a way to meet the bloc’s 2030 climate goals.

After a partial deal was struck last week, EU negotiators from the European Parliament and the Council of EU member states concluded negotiations on the final piece of the package on Friday (8 December).

“For the first time in history, we are creating a legal framework for hydrogen on the EU energy market,” said former Polish prime minister Jerzy Buzek who was the lead speaker on the file for the European Parliament.

The compromise deal will be formally rubber-stamped by the Parliament and Council after negotiations conclude on a separate propose to reform the EU power market, as negotiators introduced linkages into the text.

Agreement on the proposed regulation was delayed last week after Buzek insisted to scrap the proposed hydrogen network governance structure, introduce biomethane targets into the law, and insisted that EU countries aggregate demand for hydrogen purchases.

None of these demands can be found in the final text. In the coming years, a supervising structure for hydrogen network operators (ENNOH) will be created, mirroring similar bodies for gas and electricity.

Experts had advised against folding hydrogen planning into the gas network body ENTSOG – a body bringing together gas pipeline operators – warning that incumbents might be tempted to bar potential new entrants and distort the market to their advantage. 

Their warnsing were broadly heard. In 2026, the newly established ENNOH will work on a ten-year hydrogen development plan, together with the existing gas and electricity network operators.

In 2027, gas companies will get to fold some of their pipelines into ENNOH – infrastructure that can be retrofitted to transport hydrogen instead of fossil gas. And as of 2028, ENNOH will be expected to operate fully independently.

The phase-in period left some observers sceptical. “Independent ENNOH without initial independence,” commented Josche Muth, head of regulatory affairs at the Danish energy company Ørsted.

Hydrogen analyst Gniewomir Flis cautioned that gas grid operators will be tempted to “unstrand as many assets as they can” thereby delaying the rollout of hydrogen infrastructure, while Greenpeace said the deal “dodges a conflict of interest in new hydrogen grid.” 

Industry group Hydrogen Europe, for its part, welcomed the creation of ENNOH, saying the move “puts it at an equal level with electricity and gas carriers, highlighting its fundamental role in the energy transition.”

Buzek’s other demand, the introduction a binding biomethane target of 35 billion cubic meters (bcm) for 2030, in line with the EU’s REPowerEU plan to ditch Russian gas, was not retained and relegated to a recital in the text.

Meanwhile, the creation of a joint buyers cartel for hydrogen “must be fully voluntary,” the Council said in a press release.

Another provision of the agreement targets the Kremlin more directly. “The regulation will contain provisions allowing member states to adopt restrictions to the supply of natural gas, including liquefied natural gas (LNG), from Russia or Belarus,” the statement adds.

The final provision relates to a solidarity clause between EU countries in the event of gas supply shortages. In the event of a crisis “default provisions” will apply unless countries have a bilateral agreement in place.

[Edited by Frédéric Simon]

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