Changes from report parliamentary committee draft to plenary report

Added(62) To ensure the efficient operation of the European hydrogen networks, hydrogen network operators should be responsible for the operation, maintenance and development of the hydrogen transport network in close cooperation with other hydrogen network operators as well as with other system operators their networks are connected with, including to facilitate energy system integration.

RemovedInextricably linked to AM 39.

Added(63) It is in the interest of the functioning of the internal market to have standards which have been harmonised at Union level. Once the reference to such a standard has been published in the Official Journal of the European Union, compliance with it should raise a presumption of conformity with the corresponding requirements set out in the implementing measure adopted on the basis of this Regulation, although other means of demonstrating such conformity should be permitted. In line with Article 10 of Regulation (EU) 1025/2012, the European Commission can request European standardisation organisations to develop technical specifications, European standards and harmonised European standards. One of the main roles of harmonised standards should be to help operators in applying the implementing measures adopted under this Regulation and recast Gas Directive as proposed in COM(2021) xxx.

RemovedArticle 23 – paragraph 8: 8. The ENTSOG&H shall monitor and analyse the implementation of the network codes and the guidelines adopted by the Commission in accordance with Article 53(13), 54 or 56, and their effect on the harmonisation of applicable rules aimed at facilitating market integration. The ENTSOG&H shall report its findings to the Agency and shall include the results of the analysis in the annual report referred to in paragraph 3, point (f).

Added(64) In order to fully take into account the quality requirements of hydrogen end-users, technical specifications and standards for the quality of hydrogen in the hydrogen network will have to consider already existing standards setting such end-user requirements (for instance, the standard EN 17124).

RemovedInextricably linked to AM 39.

Added(65) Hydrogen system operators should build sufficient cross-border capacity for the transportation of hydrogen accommodating all economically reasonable and technically feasible demands for such capacity, thereby enabling market integration.

RemovedArticle 23 – paragraph 9: 9. The ENTSOG&H shall make available all information required by ACER to fulfil its tasks under Article 24. In order to enable the ENTSOG&H to meet that requirement, transmission system operators and hydrogen network operators shall provide the ENTSOG&H with the requested information.

Added(66) ACER should publish a monitoring report on the status of congestion.

RemovedInextricably linked to AM 39.

Added(67) In view of the potential of hydrogen as energy carrier and the possibility that Member States will engage in trade in hydrogen with third countries, it is necessary to clarify that intergovernmental agreements in the field of energy relating to gas subject to notification obligations in accordance with Decision (EU) 2017/684 include intergovernmental agreements relating to hydrogen, including hydrogen compounds such as ammonia and liquid organic hydrogen carriers.

RemovedArticle 23 – paragraph 11: 11. Upon request of the Commission, the ENTSOG&H shall give its views to the Commission on the adoption of the guidelines as laid down in Article 56.

Added(67a) The current empowerments vested on ACER by Regulation (EU) No 1227/2011 of the European Parliament and of the Council and Commission Implementing Regulation (EU) No 1348/2014 (together referred to as ‘REMIT’) do not suffice to create a complete and comprehensive dataset of all LNG deliveries into the Union. However, such a comprehensive and complete dataset for daily LNG price assessment is necessary for the Union to manage, in a spirit of solidarity, its procurement policies for international LNG imports, in particular during the on-going crisis situation. Relevant data and information on LNG contracts are also necessary to ensure monitoring of price developments as well as perform data quality control and quality assurance. Although the crisis situation resulting from the Russian Federation’s unprovoked and unjustified military aggression against Ukraine required urgent action, including the conferral of additional powers and tasks to ACER under Council Regulation (EU) 2022/2576, the establishment of a daily LNG price assessment and LNG benchmark on a permanent basis should be included.

RemovedInextricably linked to AM 39.

Added(68) In reaction to the significant and Union-wide energy price increases evidenced in autumn 2021 and their negative impacts, the communication of the Commission of 13 October 2021 entitled ‘Tackling rising energy prices: a toolbox for action and support’ highlighted the importance of an effective and well-functioning internal energy market and of the effective use of gas storages in Europe across the Single market. That communication also emphasised that a better coordination of security of supply across borders is crucial for the resilience against future shocks. On 20/21 October 2021, the European Council adopted conclusions inviting the Commission to swiftly consider measures that increase the resilience of the Union’s energy system and the internal energy market, including measures which enhance security of supply. In response to Russia’s invasion of Ukraine, the Commission presented the REPowerEU Plan on 8 March 2022 in order to phase out Union’s dependency on Russian fossil fuels and to accelerate the clean energy transition. To contribute to a consistent and timely response to this crisis and possible new crisis at Union level, specific rules to improve cooperation and resilience, in particular concerning better-coordinated storage and solidarity rules, should be introduced in this Regulation and in Regulation (EU) 2017/1938, complementing the mandatory minimum level of gas in storage facilities.

RemovedArticle 23 – paragraph 11 a (new): 11a. The ENTSOG&H shall promote cyber security and data protection in cooperation with relevant authorities and regulated entities.

Added(69) The analysis of the functioning of the storage capacities in the regional common risk assessments should be based on objective assessments of the needs for the security of supply, duly taking into account cross-border cooperation and the solidarity obligations under this Regulation. It should also take into account the full potential of the energy efficiency policies and energy savings and importance of avoiding stranded assets in the clean energy transition and the goal of reducing the dependency of the Union on external fossil fuels providers. The analysis should include an assessment of the risks linked to the direct or indirect ownership or control of storage infrastructure by third country entities. The analysis should take into account the possibility to use storage facilities in other Member States and for transmission system operators to set up joint procurement of gas provided that the conditions of this Regulation are respected. The regional common risk assessments and national risk assessments should be consistent with each other in order to identify the measures of the national preventive and emergency plans in compliance with this Regulation ensuring that any measures taken do not harm the security of supply of other Member States and do not unduly hinder the effective functioning of the gas market. For instance they should not block or restrict the use of cross-border transport capacities.

RemovedInextricably linked to AM 39.

Added(70) Cooperation of Member States with the Contracting Parties to the Treaty establishing the Energy Community that have large available storage capacities could support actions where storage in the Union is not feasible or cost effective. This can include the possibility to consider to use these storage capacities located outside the Union in the relevant common risk assessment. Member States may request the relevant regional risk groups to invite experts from the third country to ad-hoc sessions of the regional risk groups without creating a precedent of regular and full participation.

RemovedArticle 24 – paragraph 1 – subparagraph 1: 1. ACER shall monitor the execution of the tasks referred to in Article 23(1), (2) and (3) of the ENTSOG&H and report to the Commission.

Added(71) Joint procurement of gas by several transmission operators of different Member States or other undertakings designated by the Member States should be designed in a way so that it can be used in the case of Union ▌ or regional emergency as part of the actions coordinated by the Commission pursuant to Article 12(3) of Regulation (EU) 2017/1938. Transmission system operators or other undertakings designated by the Member States which engage in joint procurement of gas should ensure that any joint purchasing agreement complies with the Union competition rules, and in particular with the requirements of Article 101 TFEU. The notification effected to assess the compliance of the envisaged voluntary mechanism for the joint procurement of gas with this Regulation is without prejudice to the notification of aids granted by States, where applicable, under Article 108(3) TFEU.

RemovedArticle 24 – paragraph 1 – subparagraph 2: ACER shall monitor the implementation by the ENTSOG&H of network codes elaborated under Article 23(2) and network codes which have been developed in accordance with Article 53 (1) to (12) or Article 54(1) to (12) but which have not been adopted by the Commission under Articles 53(13) or 54(13). Where the ENTSOG&H has failed to implement such network codes, ACER shall request the ENTSOG&H to provide a duly reasoned explanation as to why it has failed to do so. ACER shall inform the Commission of that explanation and provide its opinion thereon.

Added(71a) Trading venues offering energy-related commodity derivatives often admit for participation various energy firms from all Member States. Such energy firms rely heavily on derivatives traded on such trading venues to ensure crucial supplies of gas and electricity across the Union. Excessive price movements occurring on energy-related commodity derivatives trading venues therefore affect the operation of energy firms across the whole Union, ultimately also adversely affecting end-consumers. Therefore, in a spirit of solidarity between Member States, coordination of the implementation and application of the intra-day volatility management mechanism should be undertaken, to ensure that operators essential for the security of the energy supply in all Member States benefit from safeguards against large price movements that are detrimental to the continued operation of their business, which would also be detrimental to the end-consumers.

RemovedArticle 24 – paragraph 1 – subparagraph 3: ACER shall monitor and analyse the implementation of the network codes and the guidelines adopted by the Commission as laid down in Articles 52, 53, 54, 55 and 56, and their effect on the harmonisation of applicable rules aimed at facilitating market integration as well as on non-discrimination, effective competition and the efficient functioning of the market, and report to the Commission.

Added(71b) The intra-day volatility management mechanism should ensure that excessive movements in prices within a trading day are prevented. The mechanism should be based on the observed market price at regular intervals. Given the wide diversity of instruments in energy derivatives markets and the peculiarities of the trading venues associated with such instruments, the intra-day volatility management mechanisms should be adapted to the specificities of those instruments and markets. Therefore, price limits should be set up by trading venues taking into account the specificities of each relevant energy-related commodity derivative, the liquidity profile of the market for such derivative and its volatility profile.

RemovedArticle 24 – paragraph 2 – introductory part: 2. The ENTSOG&H shall submit the draft Union-wide network development plan, the draft annual work programme, including the information regarding the consultation process and the other documents referred to in Article 23 (3), to ACER for its opinion.

Added(72) The European energy sector is undergoing an important change towards a highly efficient decarbonised economy based on renewable energy sources, while ensuring security of supply and competitiveness. While cybersecurity in the electricity sub-sector is already advancing with a network code on cross-border electricity flow, sector-specific mandatory rules for the gas sub-sector are needed to ensure security of the European energy system.

RemovedArticle 24 – paragraph 2 – subparagraph 1: Within two months from the day of receipt, ACER shall provide a duly reasoned opinion as well as recommendations to the ENTSOG&H and to the Commission where it considers that the draft annual work programme or the draft Union-wide network development plan submitted by the ENTSOG&H do not contribute to non-discrimination, effective competition, the efficient functioning of the market or a sufficient level of cross-border interconnection open to third-party access.

Added(73) As demonstrated in the Union wide simulation of 2017 and 2021, regional cooperation and solidarity measures are essential to ensure the resilience of the Union in case of serious deterioration of the supply situation. Solidarity measures should ensure the supply of protected solidarity customers such as households across borders in all situations. Member States should adopt the necessary measures for the implementation of the provisions concerning the solidarity mechanism, including by the Member States concerned agreeing on technical, legal and financial arrangements. Member States should describe the details of those arrangements in their emergency plans. For Member States who have not agreed the necessary bilateral agreement, the default template of this Regulation should apply in order to ensure such effective solidarity.

RemovedArticle 27 – paragraph 1: The costs related to the activities of the ENTSOG&H referred to in Articles 21 to 23, 52, 53 and 54 of this Regulation, and in Article 11 of Regulation (EU) No 347/2013 of the European Parliament and of the Council17 shall be borne by the gas transmission system operators and the hydrogen network operators and shall be taken into account in the calculation of tariffs. Regulatory authorities shall approve those costs only if they are reasonable and appropriate. The ENTSOG&H shall ensure that membership fees from gas transmission system operators and hydrogen network operators will be proportionate and accounted separately and transparently for their respective activities.

Added(74) Such measures may therefore give rise to an obligation for a Member State to pay compensation to those affected by its measures. To ensure that the compensation paid by the Member State requesting solidarity to the Member State providing solidarity is fair and reasonable, the national energy regulator authority for energy or the national competition authority should have, as independent authority, the power to audit the amount of compensation requested and paid and if necessary request a rectification.

RemovedAdapted to ensure the transparent integration of gas transmission system operators and hydrogen network operators in the ENTSOG&H

Added(74a) It is important for the Commission and the Member States to have a clear picture of intended and concluded gas supply contracts across the Union, in order to assess whether the objectives of security of supply and energy solidarity are met. Therefore, undertakings or authorities of Member States should inform the Commission and the Member States in which those undertakings are established of large planned gas purchases above 5 TWh/year. This should in particular apply to basic information regarding new or renewed contracts. The Commission should be allowed to issue recommendations to the natural gas undertakings or authorities of the relevant Member States, in particular where further coordination could improve the functioning of joint purchasing or where the launch of a tender for the purchase of gas or planned gas purchases may have a negative impact on security of supply, the internal market or energy solidarity. The issuing of a recommendation should not prevent natural gas undertakings or authorities of the relevant Member States from proceeding with the negotiations in the meantime.

RemovedArticle 28 – title: Regional cooperation of transmission system operators and hydrogen network operators

Added(74b) Where the Commission has reasonable grounds for considering that extraordinary circumstances have occurred in which security of supply of the Union or of a given region or of a Member State cannot be fully ensured without addressing missing links, in particular taking into account the Union's aim to end dependence on a single supplier, it is encouraged to mandate the ENTSOG to carry out a transparent and in-depth analysis of the identified risks to the security of supply and of possible solutions to address it. On the basis of ENTSOG’s analysis, the Commission, taking into account the need to promote Union energy security and solidarity, the rapid ending of dependence on a single supplier and the overcoming of related bottlenecks in the internal energy market may identify missing links with a view to resolving or mitigating the identified risks to the security of supply. The Commission may also identify means to support the development of such investment projects, including through an accelerated permitting procedure and financial assistance. It is important that any such investment project is future-proof and compatible with the Union objectives of climate neutrality laid down in Regulation (EU) 2021/1119 and does not lead to stranded assets.

RemovedArticle 28 – paragraph 1: 1. Transmission system operators and hydrogen network operators shall establish regional cooperation within the ENTSOG&H to contribute to the tasks referred to in Article 23 (1), (2) and (3).

Added(75) Since the objective of this Regulation, namely the setting of fair rules for access conditions to natural gas transmission networks, storage and LNG facilities, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale or effects of such an action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

RemovedAdapted to ensure integration of gas transmission system operators and hydrogen network operators in the ENTSOG&H after proposal to completely remove ENNOH and deletion of article 47 (Regional cooperation of hydrogen network operators).

AddedHAVE ADOPTED THIS REGULATION:

RemovedArticle 28 – paragraph 2: 2. Transmission system operators and hydrogen network operators shall promote operational arrangements in order to ensure the optimum management of the network and shall promote the development of energy exchanges, the coordinated allocation of cross-border capacity through non-discriminatory market-based solutions, paying due attention to the specific merits of implicit auctions for short-term allocations and the integration of balancing mechanisms.

AddedSubject matter, scope and definitions

RemovedAdapted to ensure integration of gas transmission system operators and hydrogen network operators in the ENTSOG&H after proposal to completely remove ENNOH and deletion of article 47 (Regional cooperation of hydrogen network operators).

AddedThis Regulation:

RemovedArticle 29 – paragraph 2 – point c: (c) identify investment gaps, notably with respect to cross-border capacities, where available considering the European Plan for Priority Corridors for Hydrogen consistent with Annex I to Regulation (EU) 2022/869 and reinforced by the REPowerEU Plan.

Added(a) sets non-discriminatory rules for access conditions to natural gas and hydrogen systems taking into account the special characteristics of national and regional markets with a view to ensuring the proper functioning of the internal market in gas as well as to contribute to the long-term flexibility of the electricity system; ▌

RemovedProposed amendment is limited to the integration of H2-related task in TYNDP after proposal to completely remove ENNOH and deletion of article 43 (Ten-year network development plan for hydrogen).

Added(aa) encourages preventive measures reducing fossil gas demand through the implementation of the energy efficiency first principle leading to energy savings, increased direct electrification as part of a fully integrated energy system, and increased use of renewable sources of energy, and contributes to the prudent and rational use of natural resources and the achievement of the Union’s climate and energy targets; and

RemovedArticle 33 – paragraph 2: 2. Paragraph 1 shall be without prejudice to the possibility for distribution system operators to develop alternatives to reverse flow investments, such as smart grid solutions or connection to other network operators. Firm access may only be limited to offer capacities subject to operational limitations, in order to ensure economic efficiency and safety. The regulatory authority shall ensure that any limitations in firm capacity or operational limitations are introduced on the basis of transparent and non-discriminatory procedures and do not create undue barriers to market entry. Where the production facility bears the costs related to ensuring firm capacity, no limitation shall apply.

Added(b) facilitates the emergence of a well-functioning and transparent wholesale market with a high level of security of supply in gas and provides mechanisms to harmonise the network access rules for cross-border exchanges in gas.

RemovedArticle 34 – title: Cooperation between distribution system operators, transmission system operators and hydrogen network operators

AddedThe objectives referred to in the first subparagraph shall include the setting of harmonised principles for tariffs, or the methodologies underlying their calculation, for access to the natural gas network, but not to storage facilities, the establishment of third-party access services and harmonised principles for capacity-allocation and congestion-management, the determination of transparency requirements, balancing rules and imbalance charges, and the facilitation of capacity trading.

RemovedArticle 34 – paragraph 1: Distribution system operators shall cooperate with other distribution system operators, transmission system operators and hydrogen network operators to coordinate maintenance, system development, new connections and the operation of the system to ensure system integrity and with a view to maximise capacity and minimise the use of fuel gas.

AddedThis Regulation, with the exception of Article 31(5), shall apply only to natural gas and hydrogen storage facilities falling under Article 29(3) or (4) of recast Gas Directive as proposed in COM(2021)xxx.

RemovedAdapted to ensure integration of gas transmission system operators and hydrogen network operators in the ENTSOG&H.

AddedThe Member States may establish an entity or body set up in compliance with Recast Gas Directive as presented in COM xxx for the purpose of carrying out one or more functions typically attributed to the transmission system operator or hydrogen network operator, which shall be subject to the requirements of this Regulation. That entity or body shall be subject to certification in accordance with Article 13 of this Regulation and shall be subject to designation in accordance with Article 65 of recast Gas Directive as proposed in COM(2021)xxx.

RemovedArticle 38 – paragraph 3 – point c: (c) work on identifying best practices for the implementation of the results of the assessments pursuant to Article 23(1a) [proposal for REDIII] and Article 23 [proposal for revised EED] and for the cooperation between operators of electricity distribution networks, of natural gas distribution networks and of district heating and cooling systems including for the purpose of the assessment pursuant to Article 24(8) [proposal for REDIII], including recommendations for the suitable placement of electrolysers with a view to ensure the use of waste heat in district heating network.

Added1. For the purpose of this Regulation, the following definitions apply:

RemovedSystem integration will help develop a more efficient, sustainable and resilient energy system. Electrolysers produce a lot of waste heat. By placing these installations adequately, a share of this energy could be used in district heating networks.

Added(1) ‘regulatory asset base’ means all network assets of a network operator used for the provision of regulated network services that are taken into account when calculating network related services revenue;

RemovedArticle 38 – paragraph 4: 4. The EU DSO entity shall provide input to the ENTSOG&H for its reporting on gas and hydrogen quality, with regard to the distribution networks where distribution system operators are responsible for gas quality management, as referred to in Article 23(3).