On May 21st, the European Council adopted a new gas and hydrogen market package that sets common rules for the internal market concerning renewable energies, natural gas, and hydrogen. The regulation plans a gradual phase-out of fossil fuels and the integration of new gas forms. These new provisions are designed to support the transition to renewable and low-carbon gases, thereby contributing to the EU's decarbonization goals.
The newly adopted gas and hydrogen market package defines guidelines for structuring the natural gas market and the future hydrogen market. It includes specific requirements for hydrogen infrastructure, regulating transportation, supply, and storage. According to the European Council, the new regulations must ensure integrated and transparent network planning across the EU, with the principle of “energy efficiency first” being a priority. Gas and hydrogen network operators are now required to create a ten-year, forward-looking development plan for the EU network.
To ensure the phase-out of fossil fuels, the EU intends not to enter into long-term contracts for fossil gas after 2049. With the new regulations, the European Council aims to promote the use of low-carbon gas from renewable sources. Member states plan to offer tariff discounts and incentives to facilitate market and system integration, especially for the emerging hydrogen market, to ensure a fair transition. Among other measures, a voluntary mechanism will be established to support the hydrogen market for five years.
Protection Against Energy Poverty
Customers in remote areas will be better protected against energy poverty through the new package. Other measures by member states include developing a so-called “supplier of last resort” to ensure security of supply. The directive will now be signed and then published in the EU Official Journal. Subsequently, member states will have two years to adapt their national legislation to the provisions of the directive, which will be applicable after six months.
The gas and hydrogen market package is part of the Fit for 55 package and aims to update the existing regulation and the directive on natural gas adopted in 2009. The package was provisionally adopted by the Council and the European Parliament last December (2023) and includes detailed plans for a new hydrogen network operator company (ENNOH), which will operate independently from the existing gas and electricity network operators (ENTSOG and ENTSOE).
