Changes from report parliamentary committee draft to plenary report

Access to energy sources and the ways in which they are converted will determine the economic, social and civilisational development on our planet. Fossil fuels have been and are the primary source of energy, and a huge increase in their use has led to direct environmental degradation, but also to radical global warming and the dramatic risks associated with it, confirmed in Paris in 2015 by 196 countries at the UN Climate Summit.

It is therefore time for a rapid phase-out of fossil fuels and a transition to renewable, carbon-free energy. From the point of view of consumers — individual, industrial, collective — the most environmentally and climate-safe energy carrier is electricity. However, not all industrial processes, transport or means of communication can be electrified. Whereas it is therefore necessary to include another, environmentally and climate-safe source - hydrogen, of which the only after-use waste is water; hydrogen is also the best way of big-scale storing electricity in the future.

The era of hydrogen is coming, as has been predicted for decades; but only now, also thanks to the European Union’s investment in cutting-edge research on the production, transport and use of hydrogen, this era becomes a reality. As part of the European Green Deal, we already have our Hydrogen Strategy. This Regulation, together with the Directive having a similar title, constitutes the first legislative package to pave the way for the creation of the hydrogen backbone and wide use of hydrogen as an energy carrier. The European Parliament will aim to ensure that the Hydrogen and Decarbonised Gases Package is in line with the Climate Law and consistent with the Fit for 55 Package and that it meets the conditions of a stable European legislation.

After a number of meetings with industry, SMEs, academia, trade unions, local and civil society organisations, the rapporteur can conclude that the European Commission’s proposal for the Regulation has been well received by stakeholders. The following comments, as well as the rapporteur’s amendments, stem in particular from these meetings.

The importance of precise definitions and compliance with them without exceptions was emphasised. Blending of hydrogen and natural gas was considered highly unfavourable, although in exceptional cases acceptable. When calculating costs and emissions for fuels, it is strongly recommended to take into account the full chain of production, supply, transport, disposal, etc.

The huge investment needs require incentives for hydrogen producers and consumers, including true tariff discounts and other financial incentives, access to research and technological innovation and creation of an internal European hydrogen market, as well as cooperation with reliable partners from the third countries.

Within the Union, cooperation between political authorities, industry, SMEs, science and NGOs and civil society is essential. This is why activities of institutions such as the European Clean Hydrogen Alliance and the Hydrogen Europe are so important. Broad public support should be sought for the European Green Deal, and in particular for hydrogen production, transport and use. Member States are required to introduce hydrogen strategies at national level. The European institutions will endeavour to secure financing of investments for hydrogen from Community programmes and funds.

The amendments also take into account the solutions adopted in the European Commission’s RePowerEU Plan, which is a response to Russia’s violent and criminal assault against Ukraine and the need for the Union to move rapidly away from fossil fuel imports from Russia. An effective, fully transparent path to infrastructure investments related to the security of energy supply to the Union has been proposed; the investments must correspond to future-proof solutions and protect against the creation of stranded assets. Solutions have also been proposed to promote biomethane, with a goal to produce and inject into natural gas system of at least 35bcm of biomethane by 31 December 2030. The limit on gas imports by a Member State from a third country and the need for periodic reviews of the derogation for gas pipelines from third countries - in both cases from countries outside the European Economic Area - have been defined. The rules related to the possibility of joint EU purchases of gas from third countries - as called by the European Parliament already 12 years ago - have been strengthened. The provisions on opening of the common energy market to the Energy Community countries, in particular Ukraine, are being continued further. The amendments to the Regulation also introduced solutions recently adopted under the Gas Storage Regulation.

Serious reservations about the draft Regulation submitted by the European Commission were raised only on the proposal for the management of the newly created hydrogen market and infrastructure by the new institution: European Networks of Hydrogen Networks Operators ENNOH). As a result of the numerous and lengthy discussions, the rapporteur has proposed a solution that avoids the creation of another energy market institution in the Union, given that this part of the market is still in its initial stage of development; at the same time the rapporteur appreciates the role of a clear, also public, articulation of the needs, risks and hopes of the participants in the hydrogen market by establishing of a separate hydrogen structure within ENTSO-G. An important reason behind such a proposal is also the need to repurpose natural gas infrastructure into hydrogen infrastructure and minimise stranded assets. The next decade will show if a separate structure (ENNOH) will be necessary.

The rapporteur also appreciates the role of ENTSO-E in creating and supporting the hydrogen market, in particular the production of renewable hydrogen from renewable energy, as the future solution in the Union is the market of only two main energy carriers: electricity and hydrogen, with a small share of biogas/biomethane and biomass. Hydrogen will be produced by electrolysis and, in addition to its direct use in industry or transport, it will also be used to store electricity.