28 June, 2021

Need for legislation in order to kickstart build of hydrogen infrastructure

Last week, the Gas for Climate consortium publishes its hydrogen legislation paper. This paper groups together the vision of 11 Gas Transmission System Operators (TSOs) on how EU legislation can help to create a dedicated hydrogen pipeline infrastructure across Europe.

Quick action is needed to reach the EU’s ambitious climate targets and desired scale-up of hydrogen. Therefore, the paper suggests 7 points that should be covered in an initial legislative framework. The paper also describes how the European hydrogen backbone can be financed, outlining the investment needs, investor perspectives, and the different country perspectives.

- Hydrogen will be very important in a future energy system to reach the climate targets in Europe and Sweden, says Hans Kreisel, CEO at Nordion Energi. – And in order to stimulate investments and start the implementation of hydrogen infrastructure, the need for legislation and regulations crucial.

By 2030, the proposed hydrogen backbone will largely be composed of regional networks, consisting of over 64% repurposed pipelines and amounting to more than 9,100 km in all nine Gas for Climate countries. The investments needed to develop these national backbones by 2030 lead to a sum of around 11 billion euros. These investments will provide an important first step towards a pan-European liquid hydrogen market. Gas infrastructure companies and financial institutions are ready to invest in hydrogen and hydrogen infrastructure, and indicate the need for legislative clarity. European legislation and national governments play an important role in enabling the hydrogen backbone. Setting clear targets and timelines, and introducing policies to meet those, are important steppingstones to swiftly move forward.

Gas for Climate supports the EU's ambition to create a liquid, cross-border hydrogen market and foresees a legislative step-by-step approach to achieve this. This approach will allow the EU, Member States, and Gas TSOs to get started based on an initial legislative framework. In line with how natural gas is regulated in the EU today, Gas for Climate sees that regulated tariffs and Third Party Access (TPA), covering both new and repurposed hydrogen pipelines are part of a future in which the TSOs will be acting as unbundled regulated monopolies in a mature market.

This paper provides input to the public consultation by the European Commission on Gas markets and the revision of the EU rules on market access.

 

Read the policy document in full here: https://gasforclimate2050.eu/wp-content/uploads/2021/06/Gas-for-Climate-Priorities-for-the-EU-hydrogen-legislation-24-June-2021-2.pdf

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