Changes from report parliamentary committee draft to plenary report

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

▸5 unchanged paragraphs

on the proposal for a directive of the European Parliament and of the Council on common rules for the internal markets in renewable and natural gases and in hydrogen (recast)

(COM(2021)0803 – C90468/2021 – 2021/0425(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2021)0803),

Changed– having regard to Article 294(2) and Article 194(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90468/2021),

Removed– having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

Removed– having regard to Rules 59 and 40 of its Rules of Procedure,

Added– having regard to the reasoned opinions submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Czech Chamber of Deputies and the Czech Senate, asserting that the draft legislative act does not comply with the principle of subsidiarity,

Added– having regard to the opinion of the European Economic and Social Committee of 19 May 2022,

Added– having regard to the opinion of the Committee of the Regions of 10 October 2022,

Added– having regard to the Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts,

Added– having regard to the letter of 2 February 2023 sent by the Committee on Legal Affairs to the Committee on Industry, Research and Energy in accordance with Rule 110(3) of its Rules of Procedure,

Added– having regard to Rules 110 and 59 of its Rules of Procedure,

– having regard to the opinions of the Committee on the Internal Market and Consumer Protection and the Committee on Agriculture and Rural Development,

Changed– having regard to the report of the Committee on Industry, Research and Energy (A90000/2022),(A9-0035/2023),

Change 1

Removed1. Adopts its position at first reading hereinafter set out;

AddedA. whereas, according to the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, the Commission proposal does not include any substantive amendments other than those identified as such in the proposal and whereas, as regards the codification of the unchanged provisions of the earlier acts together with those amendments, the proposal contains a straightforward codification of the existing texts, without any change in their substance;

Added1. Adopts its position at first reading hereinafter set out, taking into account the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 2

RemovedRecital 6 a (new): (6 a) The integration of biomethane in the natural gas system supports the Union's climate objectives and helps to diversify the energy supply in line with the Commission’s communication of 18 May 2022 setting out the REPowerEU. Requests for the grid connection of renewable gas production should be assessed within reasonable time limits and permitting procedures should not be hampered by a lack of administrative capacities. It should be possible to prioritise connection requests for renewable gas production over connection request for the production of natural and low carbon gases.

AddedAMENDMENTS BY THE EUROPEAN PARLIAMENT*

RemovedRecital 8: (8) In line with the EU Hydrogen Strategy, renewable hydrogen is expected to be deployed on a large-scale from 2030 onwards for the purpose of increasing the flexibility of the electricity system and decarbonising certain sectors, ranging from aviation and shipping to hard-to-decarbonise industrial sectors. In the early stages of market development, hydrogen use should be prioritised in hard-to-decarbonise in sectors in whichmore energy and cost efficient options are not available. All final customers connected to hydrogen systems will benefit from basic consumer rights applicable to final customers connected to the natural gas system such as the right to switch supplier and accurate billing information. In those instances where customers are connected to the hydrogen network, e.g. industrial customers, they will benefit from the same consumer protection rights applicable to natural gas customers. However, consumer provisions designed to encourage household participation on the market such as price comparison tools, active customers and citizen energy communities do not apply to the hydrogen system.

Addedto the Commission proposal

RemovedRecital 9: (9) In line with the EU Hydrogen Strategy, the priority for the EU is to develop renewable hydrogen produced using mainly wind and solar energy. Renewable hydrogen produced using biomass energy falls under the definition of biogas, as referred to in Article 2, point (28), of Directive (EU) 2018/2001 of the European Parliament and of the Council8. Renewable hydrogen is the only option with the EU’s climate neutrality and zero pollution goal in the long term and the most coherent with an integrated energy system. However, renewable hydrogen production is not likely to scale fast enough to meet the expected growth in demand for hydrogen in the Union. Therefore, low-carbon fuels (LCFs) such as low-carbon hydrogen (LCH) may play a role in the energy transition, particularly in the short and medium term to rapidly reduce emissions of existing fuels, and support the transition of the Union’s industry in hard-to-decarbonise sectors in which more energy or cost-efficient options are not available, including in heavy-duty transport. In order to support the transition, it is necessary to establish a threshold for greenhouse gas emission reductions for low-carbon hydrogen and synthetic gaseous fuels. Such threshold should become more stringent for hydrogen produced in installations starting operations from 1 January 2031 to take into account technological developments and better stimulate the dynamic progress towards the reduction of greenhouse gas emissions from hydrogen production. The…

Added---------------------------------------------------------

RemovedRecital 9 a (new): (9a) The Union is not able to produce enough renewable and low-carbon hydrogen to meet its decarbonisation goals. Imports of renewable and low-carbon hydrogen are needed for the rapid availability of large quantities of hydrogen catering for the Union’s demand, especially from neighbouring regions such as North Africa and the Middle East. The certification and life cycle assessment methodology of LCF should also apply to imports. This will ensure that partner countries can easily identify the requirements of the Union for LCF to be certified as such, ensure market confidence, and foster transparent imports of LCF. By developing such a methodology, the Union can also take a leading role in developing global standards for LCF certification and strengthen its role as a global climate leader, using its climate diplomacy to develop mutually beneficial cooperation with exporting partners.

Added2021/0425 (COD)

RemovedRecital 12: (12) The European Pillar of Social Rights places energy among the essential services everyone shall have access to and calls for support measures for those in need (principle 20). UN Sustainable Development Goal number 7 (SDG7) also calls for ensuring access to affordable, reliable, sustainable and modern energy for all. This Directive builds on comprehensive and common concepts of energy poverty and vulnerable customers.

AddedProposal for a

RemovedRecital 24: (24) The switch from fossil gas to renewable alternatives will concretise if energy from renewable sources becomes an attractive, non-discriminatory choice for consumers based on truly transparent information where the transition costs are fairly distributed among different groups of consumers and market players. Mandatory fuel switches should be accompanied by measures that remove adverse effects on final customers, especially vulnerable customers and people affected by or at risk of energy poverty, as well as measures that mitigate and resolve inequalities resulting from the energy transition.

AddedDIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

RemovedRecital 27: (27) To be coherent and effective, this mirroring approach should be encompass all consumer protection and empowerment provisions, whenever feasible and adaptable to the gas market. This should go from basic contractual rights to rules for billing information, switching energy provider, having at disposal reliable comparison tools, protecting vulnerable and energy poor consumers, ensuring adequate data protection for smart meters and data management, and efficient alternative dispute resolution rules. Smart meters should be deployed only after a positive cost-benefit assessment.

Addedon common rules for the internal markets in renewable gas and natural gas and in hydrogen (recast)

RemovedRecital 35: (35) Recognising the role they can play in decarbonizing the energy system, certain categories of citizen energy initiatives should be recognised in the natural gas market at the Union level as ‘citizen energy communities’. These communities should facilitate the use of renewable gas in and should contribute to the decarbonisation of the natural gas system. In order to provide them with an enabling framework, fair treatment, a level playing field and a well-defined catalogue of rights and obligations should be laid down which generally reflects the membership structure, governance requirements and purpose of citizen energy communities in Directive (EU) 2019/944.

AddedTHE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

RemovedRecital 36: (36) The provisions on citizen energy communities do not preclude the existence of other citizen initiatives such as Renewable Energy Communities in Directive (EU) 2018/2001 or those stemming from private law agreements. Membership of citizen energy communities should be open to all categories of entities. However, the decision-making powers within a citizen energy community should be limited to those members or shareholders that are not engaged in large-scale commercial activity and for which the energy sector does not constitute a primary area of economic activity. This means that citizen energy communities and individual members or shareholders need to be financially and economically independent from entities engaged in such activities, notwithstanding the possibility for citizen energy communities to delegate the management of the installations required for their activities, including installation, operation, data handling and maintenance. To avoid abuse and ensure broad participation, citizen energy communities should remain independent from individual members and other traditional market actors that participate in the community as members or shareholders.

AddedHaving regard to the Treaty on the Functioning of the European Union, and in particular Article 194(2) thereof,

RemovedRecital 38: (38) The regular provision of accurate billing information based on actual gas consumption is important to help customers to control their gas consumption and costs. Nevertheless, customers, in particular household customers, should have access to flexible arrangements for the actual payment of their bills.

AddedHaving regard to the proposal from the European Commission,

RemovedThe deployment of smart meters in the natural gas system should be subject to a cost-benefit assessment.

AddedAfter transmission of the draft legislative act to the national parliaments,

RemovedRecital 41: (41) In order to assist final customers’ active participation in the market, the smart metering systems to be deployed should, after a positive cost-benefit assessment, have due regard to the use of relevant available standards, including those enabling interoperability on the level of the data model and the application layer, to best practices and the importance of the development of data exchange, to future and innovative energy services. Moreover, the smart metering systems that are deployed should not represent a barrier to switching supplier in the case of natural gas consumers, and should be equipped with fit-for-purpose functionalities that allow final customers to have timely access to their consumption data, to modulate their energy behaviour, be rewarded for it, and obtain savings in their bills. Consumer groups should be advised on how to improve their energy efficiency by using smart meters.

AddedHaving regard to the opinion of the European Economic and Social Committee,

RemovedRecital 55: deleted

AddedHaving regard to the opinion of the Committee of the Regions,

RemovedThe existing regulatory framework on unbundling in the natural gas system has proven to be effective and successful. There is no apparent need for changing those requirements in the hydrogen market.

AddedActing in accordance with the ordinary legislative procedure,

RemovedRecital 67: (67) The operation of hydrogen networks should be separated from activities of energy production and supply in order to avoid the risk of conflicts of interest on behalf of the network operators. The structural separation of ownership of hydrogen networks and participations in energy production and supply guarantees the absence of such conflicts of interest. Member States should be able to rely on the alternative unbundling model of “integrated hydrogen network operator” for existing vertically integrated hydrogen networks. Member States should also be able to allow the use of the “independent hydrogen network operator” model to allow vertically integrated owners of hydrogen networks to retain ownership of their networks while ensuring the non-discriminatory operation of such networks.

AddedWhereas:

RemovedRecital 67 a (new): (67a) In the long term, rights and obligations for the transport of hydrogen is intended to be the same as for the transport of natural gas. The regulatory framework for electricity and gas should therefore also apply to hydrogen, including the requirements to distinguish between the transmission and distribution of hydrogen and to apply the unbundling of distribution system operators to hydrogen distribution network operators.

Added(1) Directive 2009/73/EC of the European Parliament and of the Council has been substantially amended several times. Since further amendments are to be made, that Directive should be recast in the interests of clarity.

RemovedRecital 68: (68) The joint operation of hydrogen networks and gas or electricity grids can create synergies and should thus be allowed, ensuring transparency regarding financing and the use of access tariffs.

Added(2) The internal market in natural gas, which has been progressively implemented throughout the Union since 1999, aims to deliver real choice for all consumers of the European Union, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices, and higher standards of service, and to contribute to security of supply and sustainability.

RemovedRecital 69: deleted

Added(3) Directive 2003/55/EC of the European Parliament and of the Council and Directive 2009/73/EC of the European Parliament and of the Council have made a significant contribution towards the creation of such an internal market in natural gas.

RemovedRepetition of Recital 67