What changed between the draft committee report and the plenary report

Removed:Article 48 – paragraph 1: 1. Member States may provide for regulatory authorities to grant a derogation from Article 42 or 62 for hydrogen networks which transport hydrogen from one entry point to a limited number of exit points within a geographically confined, industrial or commercial area..

Added:(83) Pipelines connecting a third-country oil or gas production project to a processing plant or to a final coastal landing terminal within a Member State should be considered to be upstream pipeline networks. Pipelines connecting an oil or gas production project in a Member State to a processing plant or to a final coastal landing terminal within a third country should not be considered to be upstream pipeline networks for the purpose of this Directive, since such pipelines are unlikely to have a significant impact on the internal energy market.

Removed:Article 49 a (new): Article 49a / Smart metering systems in the hydrogen system for industrial customers / 1. Member States shall ensure the deployment of smart metering systems for industrial customers that can accurately measure consumption, provide information on actual time of use, and are capable to transmit and receive data for information, monitoring and control purposes, using a form of electronic communication. / 2. Member States shall ensure the security of the metering systems and respective data communication, and the privacy of final customers, in compliance with relevant Union data protection and privacy legislation, as well as their interoperability and having regard to the use of appropriate standards. / 3. The Commission shall adopt, by means of implementing acts, interoperability requirements for smart metering and procedures to ensure, for those eligible, access to data coming from those metering systems. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 4 of Regulation (EU) No 182/2011.

Added:(84) Transmission system operators should be free to conclude technical agreements with transmission system operators or other entities in third countries on issues concerning the operation and interconnection of transmission systems, provided that the content of such agreements is compatible with Union law.

Removed:In the expectation that the development of the hydrogen sector will initially concentrate on industrial and/or heavy transport use, rather than domestic use by households, Article 17 should be understood to apply to the installation of smart meters by industrial hydrogen customers. The inclusion of Article 17 within Chapter III on Consumer empowerment and protection, may create unintentional expectations regarding the intended deployment and users of these meters. Therefore, the Article has been moved to Chapter VII on Rules applicable to the dedicated hydrogen networks.

Added:(85) Technical agreements regarding the operation of transmission lines between transmission system operators or other entities should remain in force provided that they comply with Union law and the relevant decisions of the regulatory authority.

Removed:Article 50 – paragraph 1: 1. Without prejudice to legal duties to disclose information, each operator of a hydrogen network, hydrogen storage facility or hydrogen terminal, and each owner of a hydrogen network, shall preserve the confidentiality of commercially sensitive information obtained in the course of carrying out its activities, and shall prevent information about its own activities which may be commercially advantageous from being disclosed in a discriminatory manner. If the operator of a hydrogen network, hydrogen storage facility or hydrogen terminal, or the owner of a hydrogen network is part of a vertically integrated undertaking, it shall not disclose, in particular, any commercially sensitive information to the remaining parts of the vertically integrated undertaking other than transmission system operators, distribution system operators or hydrogen network operators, unless this is necessary for carrying out a business transaction.

Added:(86) When such technical agreements are in place, the conclusion of an international agreement between a Member State and a third country or of an agreement between the Union and a third country regarding the operation of the gas transmission line concerned is not required by this Directive.

Removed:This amendment aims to clarify that the limitations to the exchange of commercially sensitive information and the use of joint services within a vertically integrated undertaking only apply to the vertically integrated parts of the undertaking, meaning those parts that are involved in activities of production and/or supply of energy. Hydrogen and gas network operators of one undertaking should be allowed to exchange information and to make use of joint services.

Added:(87) The applicability of this Directive to gas transmission lines to and from third countries should be confined to the territory of the Member States. As regards offshore gas transmission lines, this Directive should be applicable in the territorial sea of the Member State where the first interconnection point with the Member States' network is located.

Removed:Article 51 – paragraph 2 – point a: (a) contain the main infrastructure that needs to be built or upgraded over the next ten years, taking into account infrastructure developed by distribution system operators to enable reverse flows to the transmission network;

Added:(88) It should be possible for existing agreements concluded between a Member State and a third country on the operation of transmission lines to remain in force, in accordance with this Directive.

Removed:Article 51 – paragraph 2 – point b: (b) contain all the investments already decided and identify new investments which have to be executed in the next three years, including investments with regard to the decommissioning of infrastructure;

Added:(89) With regard to agreements or parts of agreements with third countries which may affect common rules of the Union, a coherent and transparent procedure should be established by which to authorise a Member State, upon its request, to amend, extend, adapt, renew or conclude an agreement with a third country on the operation of a transmission line or an upstream pipeline network between the Member State and a third country. The procedure should not delay the implementation of this Directive, should be without prejudice to the allocation of competence between the Union and the Member States, and should apply to existing and new agreements.

Removed:This amendment is necessary for pressing reasons relating to the internal logic of the text.

Added:(90) Where it is apparent that the subject matter of an agreement falls partly within the competence of the Union and partly within that of a Member State, it is essential to ensure close cooperation between that Member State and the Union institutions.

Removed:Article 51 – paragraph 2 – point c: (c) include information on infrastructure that can or will be decommissioned or repurposed for the transport of hydrogen; and

Added:(91) In order to ensure uniform conditions for the implementation of this Directive, implementing powers should be conferred on the Commission to adopt decisions authorising or refusing to authorise a Member State to amend, extend, adapt, renew or conclude an agreement with a third country. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council.

Removed:Where possible, existing natural gas pipelines should be repurposed for the use of hydrogen in order to ensure a cost effective transition.

Added:(92) The security of energy supply is an essential element of public security and is therefore inherently connected to the efficient functioning of the internal market in gas and the integration of the isolated gas markets of Member States. Gas can reach the citizens of the Union only through the network. Functioning open gas markets under an adequate control of ACER and the regulatory authorities and, in particular, networks and other assets associated with gas supply are essential for public security, for the competitiveness of the economy and for the well-being of the citizens of the Union. Persons from third countries should therefore only be allowed to control a transmission system or a transmission system operator if they comply with the requirements of effective separation that apply inside the Union. Without prejudice to the international obligations of the Union, the Union considers that the gas transmission system sector is of high importance to the Union and therefore additional safeguards are necessary regarding the preservation of the security of supply of energy to the Union to avoid any threats to public order and public security in the Union and the welfare of the citizens of the Union. The security of supply of energy to the Union requires, in particular, an assessment of the independence of network operation, the level of the Union ’s and individual Member States’ dependence on energy supply from third countries, and the treatment of both domestic and foreign trade and investment in energy in a particular third country. Security of supply should therefore be assessed in the light of the factual circumstances of each case as well as the rights and obligations arising under international law, in particular the international agreements between the Union and the third country concerned. Where appropriate the Commission should submit recommendations to negotiate relevant agreements with third countries addressing the security of supply of energy to the Union or to include the necessary issues in other negotiations with those third countries.

Removed:Article 51 – paragraph 2 – point e: (e) be based on a joint scenario framework developed between the relevant infrastructure operators, including relevant distribution system operators, of at least gas, including hydrogen, electricity and district heating;

Added:(93) Further measures should be taken in order to ensure transparent and non-discriminatory tariffs for access to transport. Those tariffs should be applicable to all users on a non-discriminatory basis. Where a storage facility, linepack or ancillary service operates in a sufficiently competitive market, access could be allowed on the basis of transparent and non-discriminatory market-based mechanisms.

Removed:The joint scenario framework should also include hydrogen and district heating in order to support the energy system integration.

Added:(94) It is necessary to ensure the independence of storage system operators in order to improve third-party access to storage facilities that are technically or economically necessary for providing efficient access to the system for the supply of customers. It is therefore appropriate that storage facilities are operated through legally separate entities that have effective decision-making rights with respect to assets necessary to maintain, operate and develop storage facilities. It is also necessary to increase transparency in respect of the storage capacity that is offered to third parties, by obliging Member States to define and publish a non-discriminatory, clear framework that determines the appropriate regulatory regime applicable to storage facilities. That obligation should not require a new decision on access regimes but should improve the transparency regarding the access regime to storage. Confidentiality requirements for commercially sensitive information are particularly important where data of a strategic nature are concerned or where there is only a single user of a storage facility.

Removed:Article 51 – paragraph 2 – point g: (g) be in line with the integrated national energy and climate plan and its updates, and with the integrated national energy climate reports submitted in accordance with Regulation (EU) 2018/1999 and support the climate-neutrality objective set out in Article 2(1), of Regulation (EU) 2021/1119;

Added:(95) Non-discriminatory access to the distribution network determines downstream access to customers at retail level. The scope for discrimination as regards third party access and investment, however, is less significant at distribution level than at transmission level where congestion and the influence of production interests are generally greater than at distribution level. To lay down a level playing field at retail level, the activities of distribution system operators should be monitored so that they are prevented from taking advantage of their vertical integration as regards their competitive position on the market, in particular in relation to household and small non-household customers.

Removed:Article 51 – paragraph 2 – point g a (new): (ga) be consistent with the Union-wide ten-year network development plan as set out in Article 29 of Regulation ... [recast Gas Regulation as proposed in COM(2021) xxx].

Added:(95a) In order to improve competition in the market for the operation of gas distribution systems, Member States should designate distribution system operators in accordance with a transparent procedure and should limit the length of such designations. This would ensure that distribution system operators are not designated in perpetuity and that the balance of power in concession negotiations with the relevant authorities is improved.

Removed:Article 51 – paragraph 3: 3. When elaborating the ten-year network development plan, the transmission system operator shall fully take into account the potential for alternatives to system expansion, in particular decommissioning or repurposing of infrastructure as well as demand-side solutions not requiring new infrastructure investments, and expected consumption following the application of the energy efficiency first principle, trade with other countries and the Union-wide network development plan. The transmission system operator shall assess how to address, where possible, a need across electricity and gases systems including information on the optimal location and size of energy storage and power to gas assets and hydrogen-ready plants. The transmission system operator shall make reasonable assumptions about the evolution of production, supply and consumption.

Added:(96) Member States should take concrete measures to assist the wider use of sustainable biogas and gas from biomass, in particular at local level, and steer it into priority applications such as industry feedstocks, district heating backup and high temperature uses in industry. Member States should also ensure that biomethane grid integration is based on national potential assessments and the applicable sustainability criteria. The producers ▌should be granted non-discriminatory access to the gas system, provided that such access is compatible with the relevant technical rules and safety standards on an ongoing basis.

Removed:Reasonable assumptions on scenarios are important to avoid over-estimations, which risk creating inefficiencies.

Added:(97) Producers of renewable gas and low-carbon gas are often connected to the distribution grid. To facilitate their uptake and market integration, it is essential that they obtain unhindered access to the wholesale market and the relevant virtual trading points. Participation in the wholesale market is determined by the way in which the entry-exit systems are defined. In several Member States, producers connected to the distribution grid are not part of the entry-exit system. Therefore, the access of renewable gas and low-carbon gas to the wholesale market should be facilitated by providing a definition of an entry-exit system and ultimately ensuring that production facilities connected to the distribution system can be part of it. In addition, Regulation [the recast Gas regulation as proposed in COM(2021)xxx] provides that distribution system operators and transmission system operates are to work together to enable reverse flows from the distribution to the transmission network or alternative means to facilitate the market integration of renewable gas and low-carbon gas.

Removed:Article 51 – paragraph 5 – first subparagraph: 5. The regulatory authority shall examine whether the ten-year network development plan covers all investment needs identified during the consultation process, and whether it is consistent with the most recent Union wide simulation of disruption scenarios carried out by the ENTSO for Gas under Article 7 of Regulation (EU) 2017/1938, with the regional and national risk assessments, the Union-wide ten-year network development plans referred to in Article 29 and Article 43 of Regulation ... [recast Gas Regulation as proposed in COM(2021) xxx] and the non-binding Union -wide ten-year network development plan (Union -wide network development plan) referred to in Article 30(1), point (b), of Regulation (EU) 2019/943 . If any doubt arises as to the consistency with the Union -wide network development plan, the regulatory authority shall consult ACER . The regulatory authority may require the transmission system operator to amend its ten-year network development plan.

Added:(98) To avoid imposing a disproportionate financial and administrative burden on small distribution system operators, Member States should be able, where necessary, to exempt the undertakings concerned from the legal unbundling requirements.

Removed:If the network development plan should be consistent with the Union-wide network development plan for electricity (Regulation 2019/943), it should also be consistent with the Union-wide development plan for gas adopted by ENTSOG (Article 29) and the Union-wide development plan for hydrogen (Article 43).

Added:(99) Where a closed distribution system is used to ensure the optimal efficiency of an integrated energy supply requiring specific operational standards, or a closed distribution system is maintained primarily for the use of the owner of the system, it should be possible to exempt the distribution system operator from obligations which would constitute an unnecessary administrative burden because of the particular nature of the relationship between the distribution system operator and the users of the system. Industrial, commercial or shared services sites such as train station buildings, airports, hospitals, large camping sites with integrated facilities or chemical industry sites could include closed distribution systems because of the specialised nature of their operations.

Removed:Article 52 – paragraph 1 – point a a (new): (aa) include information on the location of industrial customers in hard-to-decarbonise sectors with the highest greenhouse gas abatement potential as well as the optimal location and size of energy storage, power to gas assets and hydrogen-ready plants and take into account the existence of more energy and cost efficient options to assess and address the needs for infrastructure development;

Added:(100) With the integration of growing volumes of renewable gas and low-carbon gas in the natural gas system, the quality of gas transported and consumed in Europe will change. To ensure the efficient operation of the natural gas system, transmission system operators should be responsible for gas quality management in their facilities. Where the injection of renewable gas and low-carbon gas takes place at distribution level and where necessary to manage their impact on gas quality, regulatory authorities can task distribution system operators with ensuring the efficient gas quality management in their facilities. When undertaking gas quality management tasks, transmission and distribution system operators should comply with applicable gas quality standards.

Removed:Since hydrogen will remain a scarce commodity for the foreseeable future, in the early stages of the market development, hydrogen use should be prioritised for hard to decarbonise sectors where no other more energy and cost efficient options are available. Additionally, the integration of the hydrogen and the electricity system should be enforced.

Added:(101) Energy regulators need to be able to take decisions in relation to all relevant regulatory issues if the internal market in natural gas is to function properly, and to be fully independent from any other political, public or private interests. The provisions relating to autonomy in the implementation of the allocated budget of the regulatory authority should be implemented within the framework defined by national budgetary law and rules. While contributing to the independence of the regulatory authority from any political or economic interest through an appropriate rotation scheme, it should be possible for Member States to take due account of the availability of human resources and of the size of the board.

Removed:Article 52 – paragraph 1 – point b: (b) include information on the extent to which repurposed natural gas pipelines will be used for the transport of hydrogen, especially to rapidly deliver hydrogen to industrial customers in hard-to-decarbonise sectors with the highest greenhouse gas abatement potential and where no other more energy and cost efficient options are available;

Added:(102) In order to ensure effective market access for all market players, including new entrants, non-discriminatory and cost-reflective balancing mechanisms are necessary. This should be achieved through the setting up of transparent market-based mechanisms for the supply and purchase of gas, needed in the framework of balancing requirements. Regulatory authorities should play an active role to ensure that balancing prices are non-discriminatory and cost-reflective. At the same time, appropriate incentives should be provided to balance the in-put and off-take of gas and not to endanger the system.

Removed:Since hydrogen will remain a scarce commodity for the foreseeable future, in the early stages of the market development, hydrogen use should be prioritised for hard to decarbonise sectors where no other more energy and cost efficient options are available.

Added:(103) Regulatory authorities should be able to fix or approve tariffs, or the methodologies underlying the calculation of the tariffs, on the basis of a proposal by the transmission system operator or distribution system operator(s) or liquefied natural gas (LNG) system operator, or on the basis of a proposal agreed between those operators and the users of the network. In carrying out those tasks, regulatory authorities should ensure that transmission and distribution tariffs are non-discriminatory and cost-reflective, and should take account of the long-term, marginal, avoided network costs from demand-side management measures.

Removed:Article 52 – paragraph 1 – point b a (new): (ba) identify investment gaps, in particular with respect to cross-border capacities; and

Added:(104) Regulatory authorities should promote, in close cooperation with the Agency for the Cooperation of Energy Regulators (ACER), established by Regulation (EC) No 942/2019 of the European Parliament and of the Council, an open, competitive, secure and environmentally sustainable internal market in hydrogen with unhindered cross-border flows. Regulatory authorities need to be able to take decisions in relation to all relevant regulatory issues if the internal market in hydrogen is to function properly.

Removed:Article 52 – paragraph 1 – point c: (c) be in line with the integrated national energy and climate plan and its updates, and with the integrated national energy and climate reports submitted in accordance with Regulation (EU) 2018/1999, support the climate-neutrality objective set out in Article 2(1) of Regulation (EU) 2021/1119 and be consistent with the Union-wide ten-year network development plan for hydrogen as set out in Article 43 of Regulation ... [recast Gas Regulation as proposed in COM(2021) xxx].

Added:(105) Energy regulators should have the power to issue binding decisions in relation to natural gas or hydrogen undertakings and to impose effective, proportionate and dissuasive penalties on natural gas or hydrogen undertakings which fail to comply with their obligations or to propose that a competent court impose such penalties on them. Energy regulators should also be granted the power to decide, irrespective of the application of competition rules, on appropriate measures ensuring customer benefits through the promotion of effective competition necessary for the proper functioning of the internal market in natural gas and in hydrogen. The establishment of gas-release programmes is one of the possible measures that can be used to promote effective competition and ensure the proper functioning of the market.

Removed:Article 52 – paragraph 5: 5. Hydrogen network operators shall, at least every two years, publish a joint report on the development of the hydrogen system based on the overview submitted to the regulatory authority. They shall take the examination of the regulatory authority under paragraph 4 into account. The regulatory authority may issue an opinion on the report, assess its consistency with the Union-wide ten-year-development plan, and recommend amendments.

Added:(106) Energy regulators should also be granted the powers to contribute to ensuring high standards of public service in compliance with market opening, to the protection of vulnerable customers, and to the full effectiveness of consumer protection measures. Those provisions should be without prejudice to both the Commission’s powers concerning the application of competition rules including the examination of mergers with a Union dimension, and the rules on the internal market such as the free movement of capital. The independent body to which a party affected by the decision of a regulatory authority has a right to appeal could be a court or other tribunal empowered to conduct a judicial review.

Removed:This amendment aims for regulatory consistency between the hydrogen network development report and the network development plan for gas. While this amendment does not intend to burden hydrogen network operators in the ramp-up phase of the market, it should ensure a consumer-centred and energy efficient network development that is accompanied by the regulatory authority.

Added:(107) Any harmonisation of the powers of regulatory authorities should include the powers to provide incentives to undertakings and to impose effective, proportionate and dissuasive penalties on undertakings or to propose that a competent court impose such penalties. Moreover, regulatory authorities should have the power to request relevant information from undertakings, make appropriate and sufficient investigations and settle disputes.

Removed:Article 52 – paragraph 6: 6. Member States may decide to apply the requirements pursuant to Article 51 to hydrogen network operators. From 1 January 2031, a network development plan pursuant to Article 51 shall be mandatory for hydrogen network operators. If a Member States opts for a system of regulated third party access to hydrogen networks in accordance with Article 31, the requirements pursuant to Article 51 shall apply immediately.

Added:(108) The regulatory authorities and ACER should provide information on the hydrogen market to ensure transparency, including aspects such as supply and demand, transport infrastructure, quality of service, sources, cross-border trade, investments, wholesale and consumer prices, market liquidity.

Removed:Article 52 a (new): Article 52a / Local heating and cooling planning / 1. Member States shall ensure that regional and local authorities prepare local heating and cooling plans that support the comprehensive heating and cooling assessment in accordance with Article 23(1) of Directive ... [recast of the directive on energy efficiency 2021/0203 (COD)]. / 2. Those plans shall at least: / (a) represent the result of a thorough assessment of a specific area’s current and future demand for heating and cooling and analyse the potential of decarbonisation; / (b) take into account the local or regional renewable energy sources, including the potential of biomethane, the potential of system efficiency through sector integration and the capacity for seasonal storage at local or regional level; / (c) be in line with the local heating and cooling plans referred to in Article 23(6) of Directive ... [recast of the directive on energy efficiency 2021/0203(COD)], the national building renovation plan referred to in Article 3 of Directive ... [recast of the directive on the energy performance of buildings 2021/0462 (COD)], as well as the joint scenario framework and the hydrogen network development report referred to in Article 52(2), point (e) and Article 52(5) of this Directive; / (d) include a strategy that establishes requirements for the infrastructure necessary on distribution level, including decommissioning, to meet the current and future demand for heating and cooling of a specific area in the most energ…

Added:(109) Transmission system operators and hydrogen transmission network operators play an important role in ensuring cost effective investments in gas networks that contribute to the achievement of the Union’s climate and energy targets. For an optimised planning across energy carriers and to bridge the gap between the diverse national and Union-wide network planning approaches, additional requirements for consistent planning are introduced. The network planning should also take account of the increased interlinkages between natural gas and electricity, as well as hydrogen and district heating. To ensure a cost effective infrastructure rollout and to avoid stranded assets, the transmission system operators of gas and electricity and the hydrogen transmission network operators should develop a joint network development plan combining natural gas, hydrogen and electricity. The network planning should be transparent and allow the relevant stakeholders to participate. To that effect, the operators as well as the regulatory authorities should be required to conduct an extensive stakeholder consultation. The European Scientific Advisory Board on Climate Change, established under Regulation (EU) 2021/1119 should be able give its opinion on the draft network development plan. The network development plan should promote energy system integration and prioritise hydrogen to end-users in hard-to-decarbonise sectors where no more energy and cost efficient alternatives are available.

Removed:Member States should ensure that regional and local authorities prepare local heating and cooling plans that aim to support the use of local renewable sources and energy system integration on local level. They should include a strategy that defines the requirements of the infrastructure necessary on distribution level in order to meet the current and future demand of heating and cooling of a specific area. The strategy should provide transparency for the public and final customers as well as a reliable timeframe for investors and distribution system operators.

Added:(110) When developing the network development plan, it is important that infrastructure operators take the energy efficiency first and system efficiency principles into account, in particular, the expected consumption used for the joint scenario development. Demand-side solutions should be prioritised whenever they are more cost-effective than investments in infrastructure and the direct electrification of end-use sectors.

Removed:Article 53 – paragraph 9 a (new): 9a. Paragraphs 1 to 9 shall not apply to hydrogen distribution network operators.

Added:(111) The energy system integration strategy points out the importance of the coordinated planning and operation of the energy system in achieving the decarbonisation objectives. Therefore it is necessary to draw up a network development plan based on a joint scenario developed on a cross-sectoral basis. ▌Infrastructure operators should work towards a higher level of integration taking into account system needs beyond specific energy carriers.