What changed between the draft committee report and the plenary report

Removed:Hydrogen distribution network operator transport hydrogen through local and regional pipeline networks.

Added:(112) Network development plans are an important element to identify infrastructure gaps and provide information on infrastructure that ▌ needs to be built, that can be decommissioned or that could be used for other purposes, such as hydrogen transport. This is true irrespective of the unbundling model chosen for the network operators.

Removed:Article 62 – title: Unbundling of hydrogen transmission network operators

Added:(113) Providing information on infrastructure that can be decommissioned or repurposed within the network development plan may mean either leaving the infrastructure unused, dismantling it or using it for other purposes, such as hydrogen transport. The objective of this increased transparency on infrastructure takes into account that repurposed infrastructure is comparatively cheaper than newly built infrastructure and hence should enable a cost effective transition. Therefore, a joint network development plan for natural gas, hydrogen and electricity should support synergies and thereby lead the way to a faster and more cost-efficient development of the hydrogen infrastructure.

Removed:Article 62 – paragraph 3: 3. A Member State may decide not to apply paragraph 1, but to designate an independent hydrogen network operator unbundled in accordance with the rules on independent system operators for natural gas set out Article 55. Hydrogen network operators and transmission system operators for gas unbundled in accordance with Article 54(1) can act as independent hydrogen network operator.

Added:(114) In Member States where a hydrogen network will be developed, ▌the network development plan should ensure that the construction of a hydrogen system is based on a realistic, science-based and forward-looking demand projections including potential needs from the perspective of the electricity system. If Member States decide to allow for dedicated charges as a means of co-funding new hydrogen infrastructure, the network development plan should support the regulatory authority in its assessment of these charges. ▌

Removed:There is no apparent justification why independent hydrogen network operator should only be allowed to operate a network if the hydrogen network, by entry into force of the Directive, belonged to a vertically integrated undertaking.

Added:(115) Information contained in the network development plan should enable a forecast on the impacts on tariffs based on planning, decommissioning or repurposing affecting the regulatory asset base ▌.

Removed:Article 62 – paragraph 4: 4. Member State may designate an integrated hydrogen network operator unbundled in accordance with the rules on independent transmission operators for natural gas set out in Section 3 of Chapter IX.

Added:(116) Instead of providing a national network development plan on individual Member State level, Member States should be allowed to choose to draw up a network development plan on regional level including more than one Member State and in line with voluntary regional gas market integration.

Removed:All three unbundling models, set forth in the Third Energy Package, namely Ownership Unbundling (OU), Independent Transmission Operator (ITO) and Independent System Operator (ISO), have proven to be equally successful to ensure transparent and non-discriminatory network access while delivering the investments needed in the energy networks. Moreover, setting an end to the ITO model puts at risk the ramp-up of the hydrogen market at least in member states where the ITO model is the common unbundling model.

Added:(117) In contrast to electricity, the role of natural gas will increasingly decline in the future, which also affects the demand for infrastructure investments. The network development plan therefore needs to balance competition concerns and avoid stranded assets. Consequently, ownership unbundled transmission system operators should not be covered by Article 51(7).

Removed:Article 63: deleted / (deleted) / (deleted)

Added:(117a) Member States should require distribution system operators and hydrogen distribution network operators to set out distribution network development plans which include the main distribution infrastructure that is required to integrate renewable gas from new production facilities as well as infrastructure that will be decommisioned or repurposed. The regulatory authority should approve the plans. Those plans should support the development of the ten-year network development plans as they contain important information for determining the need for expansion, repurposing or decommissioning of the network. The distribution network development plans should promote the energy efficiency and energy system integration and be based on the local heating and cooling plans, in particular as regards the use of gas for the heating and cooling of buildings where more energy and cost efficient alternatives are available. Those plans should contribute to the achievement of the Union’s energy and climate targets and be based on reasonable assumptions about demand and production of gas as well as prioritise other available energy system resources where it is more efficient, demand-side solutions and end-users in hard-to-decarbonise sectors where no other more energy and cost efficient options are available. When preparing the plan, the operators should be required to conduct a consultation process involving all relevant stakeholders and make the draft plans publicly available. Member States should ensure regulatory guidance from the regulatory authorities and financial support for distribution system operators where parts of the distribution system may require decommissioning, in particular before the end of their originally projected depreciation time.

Removed:The Commission acknowledges that the joint operation for hydrogen and gas networks can create synergies. This amendment aims at allowing those synergies and, by that, promoting a faster and more cost-efficient development of the hydrogen network. Therefore, repurposing existing natural gas pipelines is essential and should not be hampered by the legal separation of activities related to hydrogen transport and transmission or distribution of natural gas.

Added:(117b) 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 in the most efficient way and sector integration at local level. They should include a strategy that provides for the necessary requirements for the infrastructure at the distribution level in order to meet the current and future demand for heating and cooling of a specific area, including the energy demand of final customers in industry, SMEs, buildings and transport. That strategy should provide transparency for the public and final customers as well as a reliable timeframe for investors and infrastructure operators on distribution level to meet an area’s heating and cooling needs. The plans should be based on the local heating and cooling planning provided for in Directive (EU) .../...+, taking into account the potential of energy efficiency as well as the energy performance of buildings, the joint scenario framework and the network development plan. Members States should complement the comprehensive heating and cooling assessment with a national strategy aiming to reduce the use of gas for the heating and cooling of buildings on distribution level where more energy and cost efficient alternatives are available.

Removed:Article 72 – paragraph 1 – point h: (h) examining and providing an assessment of the overview as well as providing an opinion and recommending amendments on the report submitted by hydrogen network operators on the development of hydrogen transport infrastructure in accordance with Article 52, taking the overall energy-economic necessity of the hydrogen network into account in this examination as well as the joint scenario framework under the Article 51 (2), point (e) on network development planning and 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:(118) Investments in major new infrastructure should be strongly promoted while ensuring the proper functioning of the internal market of gas. In order to enhance the positive effect of exempted infrastructure projects on competition and security of supply, market interest during the project planning phase should be tested and congestion management rules should be implemented. Where an infrastructure is located in the territory of more than one Member State, ACER should handle as a last resort the exemption request in order to take better account of its cross-border implications and to facilitate its administrative handling. Moreover, given the exceptional risk profile of constructing those exempted major infrastructure projects, it should be possible temporarily to grant partial or full derogations to undertakings with supply and production interests in respect of the unbundling rules for the projects concerned. The possibility of temporary derogations should apply, for security of supply reasons, in particular, to new pipelines within the Union transporting gas from third countries into the Union. Exemptions and derogations granted under Directives 2003/55/EC and 2009/73/EC with amendments should continue to apply until the scheduled expiry date as decided in the granted exemption decision or derogation.

Removed:This amendment aims at ensuring regulatory oversight of the hydrogen infrastructure planning during the transition period to avoid regulatory gaps. It also ensures the consistency between national and European reporting.

Added:(119) It is necessary to progress towards interconnected hydrogen markets in the Union and thereby facilitate investments in cross-border hydrogen infrastructure. After 31 December 2030 when the regulated third-party access regime is applied comprehensively in all Member States and in the absence of cross-border transportation tariffs, a system of financial compensation should provide financial incentives for market participants to develop cross-border interconnectors. When developing that system, hydrogen network operators should take into account Article 5(7) of Regulation (EU) 2022/869.

Removed:Article 72 – paragraph 1 – point t: (t) monitoring the time taken by natural gas transmission and distribution system operators or hydrogen network operators to assess network connection requests by renewable gases producers, including technical studies, and to make connections and repairs;

Added:(120) Trust in the market, its liquidity and the number of market participants needs to increase, and, therefore, regulatory oversight of undertakings active in the supply of gas needs to be increased. Such requirements should be without prejudice to, and compatible with, existing Union law in relation to the financial markets. Energy regulators and financial market regulators need to cooperate in order to enable each other to have an overview of the markets concerned.

Removed:The duties and power of the regulatory authorities should be adapted as a consequence of amending Articles 37 and 41, thus giving a legal ground for the regulators to monitor and report on the time taken by transmission or distribution system operators to deliver on connection requests.

Added:(121) Natural gas is mainly, and increasingly, imported into the Union from third countries. Union law should take account of the characteristics of natural gas, such as certain structural rigidities arising from the concentration of suppliers, the long-term contracts or the lack of downstream liquidity. Therefore, more transparency is needed, in particular with regard to the formation of prices, both wholesale and retail.

Removed:Article 72 – paragraph 1 – point ee: (ee) approving and amending the network development plan as referred to in Article 51 and Article 52(6);

Added:(122) Prior to the adoption by the Commission of guidelines defining further the record-keeping requirements, ACER and the Committee of European Securities Regulators (the ‘CESR’), established by Commission Decision 2009/77/EC, should confer and advise the Commission in regard to their content. ACER and the CESR should also cooperate to investigate further and advise on whether transactions in gas supply contracts and gas derivatives should be subject to pre- and/or post-trade transparency requirements and, if so, what the content of those requirements should be.

Removed:Article 72 – paragraph 1 – point ii: (ii) monitoring the removal of unjustified obstacles to and restrictions on the development of consumption of self-generated renewable natural gas and citizen energy communities and prevent the misuse of citizen energy communities by members and shareholder that are engaged in large-scale commercial activity and for which the energy sector does constitute a primary area of economic activity.

Added:(123) Member States or, where a Member State has so provided, the regulatory authority, should encourage the development of interruptible supply contracts.

Removed:Article 72 – paragraph 10: 10. The regulatory authorities shall monitor congestion management of national transmission networks and hydrogen networks including interconnectors, and the implementation of congestion management rules. To that end, transmission system operators , hydrogen network operators or market operators shall submit their congestion management rules, including capacity allocation, to the regulatory authorities. Regulatory authorities may request amendments to those rules. This paragraph shall not apply to hydrogen distribution network operators.

Added:(124) Member States should ensure that, taking into account the necessary quality requirements, biogas and gas from biomass, in particular biomethane, or other types of gas are granted non-discriminatory access to the gas system, provided that such access is permanently compatible with the relevant technical rules and safety standards. Those rules and standards should ensure that such gas can technically and safely be injected into and transported through the natural gas system and should also address their chemical characteristics.

Removed:Until now, the provisions under this paragraph as well as congestion management procedures and corresponding network codes only applied to transmission system operators. This should be mirrored in the hydrogen network.

Added:(125) Long-term contracts are an important part of the gas supply of Member States However, they should not constitute a barrier to the entry of renewable gas and low-carbon gas, which is why the duration of contracts for the supply of fossil gas will not be able to run beyond 2049. Such contracts should always comply with the objective of this Directive and ▌with the TFEU, including the competition rules. It is necessary to take into account long-term contracts in the planning of supply and transport capacity of undertakings. While unabated fossil gas is still playing an important role, its relevance for securing the Union’s energy supply will increasingly decline. In line with their national climate and energy plans, Members States should ensure the phase-out of fossil gas as soon as possible, taking into account the availability of alternatives. Member States may decide on an earlier end-date for the duration of long-term contracts for unabated fossil gas before the end of 2049.

Removed:Annex II – point 1 – paragraph 1 a (new): Such an economic assessment shall take into account network development plans pursuant to Article 51, in particular, paragraph 2, point (c) thereof, on decommissioning of networks.

Added:(126) In order to ensure the maintenance of high standards of public service in the Union, all measures taken by Member States to achieve the objectives of this Directive should be regularly notified to the Commission. The Commission should regularly publish a report analysing measures taken at national level to achieve public service objectives and comparing their effectiveness, with a view to making recommendations as regards measures to be taken at national level to achieve high public service standards.

Added:(127) Respect for the public service requirements is a fundamental requirement of this Directive, and it is important that common minimum standards, respected by all Member States, are specified in this Directive, which take into account the objectives of common protection, tackling energy poverty, price monitoring, security of supply, environmental protection and equivalent levels of competition in all Member States. It is important that the public service requirements can be interpreted on a national basis, taking into account national circumstances and subject to the respect of Union law.

Added:(128) It should be possible for measures implemented by Member States to achieve the objectives of social and economic cohesion to include, in particular, the provision of adequate economic incentives, using, where appropriate, all existing national and Union tools. It should be possible for such tools to include liability mechanisms to guarantee the necessary investment.

Added:(129) To the extent to which measures taken by Member States to fulfil public service obligations constitute State aid under Article 107(1) of the Treaty, there is an obligation under Article 108(3) of the Treaty to notify them to the Commission.

Added:(130) Market prices should give the right incentives for the development of the network.

Added:(131) Promoting fair competition and easy access for different suppliers should be of the utmost importance for Member States in order to allow consumers to take full advantage of the opportunities of a liberalised internal market in gas.

Added:(132) In order to contribute to security of supply whilst maintaining a spirit of solidarity between Member States, notably in the event of an energy supply crisis, it is important to provide for a framework for regional cooperation in a spirit of solidarity. Such cooperation may rely, if Member States so decide, ▌ on market-based mechanisms. Cooperation for the promotion of regional and bilateral solidarity should not impose a disproportionate burden on or discriminate between market participants.

Added:(133) With a view to creating an internal market in natural gas, Member States should foster the integration of their national markets and the cooperation of system operators at Union and regional level, also incorporating the isolated systems forming gas islands that persist in the Union.

Added:(134) Voluntary regional markets integration, notably market mergers, can provide various benefits, depending on the specificities of the markets. Market integration may be an opportunity to make best use of infrastructure provided it does not negatively impact neighbouring markets, for instance by increased cross-border tariffs. It is also a chance to increase competition, liquidity and trade to the benefit of the end-consumers in the region, by attracting suppliers which otherwise would not come due to the small market size. Market integration allows also to create bigger zones accessing more supply sources. Such diversification could have an impact on the wholesale market prices, thanks to an improved competition between sources, but may also improve security of supply if there is no remaining internal congestion in the new merged zone. Market integration could be a basis to further support the transformation of the natural gas market, including the deployment of renewable gas and low-carbon gas. Member States, regulatory authorities and transmission system operators should cooperate to facilitate regional integration.

Added:(135) The development of a true internal market in natural gas, through a network connected across the Union, should be one of the main goals of this Directive and regulatory issues on cross border interconnections and regional markets should, therefore, be one of the main tasks of the regulatory authorities, in close cooperation with ACER where relevant.

Added:(136) Securing common rules for a true internal market and a broad supply of gas should also be one of the main goals of this Directive. To that end, undistorted market prices would provide an incentive for cross-border trade while leading, to price convergence.

Added:(137) The regulatory authorities should also provide information on the market to permit the Commission to exercise its role of observing and monitoring the internal market in natural gas and its short, medium and long-term evolution, including aspects such as supply and demand, transmission and distribution infrastructure, quality of service, cross-border trade, congestion management, investments, wholesale and consumer prices, market liquidity and environmental and efficiency improvements. Regulatory authorities should report to the competition authorities and the Commission about those Member States in which prices negatively affect consumers, impair competition and proper functioning of the market.

Added:(138) Since the objective of this Directive, namely the creation of a fully operational internal market in natural gas and in hydrogen, 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 Directive does not go beyond what is necessary in order to achieve that objective.

Added:(139) Under Regulation (EC) No 715/2009 of the European Parliament and of the Council, the Commission may adopt guidelines or network codes to achieve the necessary degree of harmonisation. Such guidelines or network codes, which constitute binding rules adopted as Commission Regulations, are, also with regard to certain provisions of this Directive, a useful tool which can be adapted quickly where necessary.

Added:(140) In particular, the Commission should be empowered to adopt the guidelines necessary for providing the minimum degree of harmonisation required to achieve the aim of this Directive.

Added:(141) In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents, Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. With regard to this Directive, the legislator considers the transmission of such documents to be justified, in particular following the judgment of the European Court of Justice in Case Commission vs Belgium (case C-543/17).

Added:(142) This Directive respects the fundamental rights, and observes the principles, recognised in particular by the Charter of Fundamental Rights of the European Union. Accordingly, this Directive should be interpreted and applied in accordance with those rights and principles, in particular the right to the protection of personal data guaranteed by Article 8 of the Charter. It is essential that any processing of personal data under this Directive comply with Regulation (EU) 2016/679 of the European Parliament and of the Council.

Added:(143) In order to provide the minimum degree of harmonisation required to achieve the aim of this Directive, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of non-essential elements of certain specific areas which are fundamental for achieving the objectives of this Directive. It is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level and with the public, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the public, the European Parliament and the Council receive all documents at the same time as Member States' experts and the public, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of the delegated acts. The Commission should also ensure that the public has access to all documents submitted to the Commission in connection with the adoption of the delegated acts.

Added:(144) In order to ensure uniform conditions for the implementation of this Directive, implementing powers should be conferred on the Commission to determine interoperability requirements and non-discriminatory and transparent procedures for access to data. Those powers should be exercised in accordance with Regulation (EU) No 182/2011.

Added:(145) The obligation to transpose this Directive into national law should be confined to those provisions which represent a substantive amendment as compared to the earlier Directive. The obligation to transpose the provisions which are unchanged arises under the earlier Directive.

Added:(146) In order to ensure a smooth and effective implementation of the provisions laid down in this Directive, the Commission supports Member States through the Technical Support Instrument providing tailor-made technical expertise to design and implement reforms, including those promoting a competitive internal market in natural gas and in hydrogen, enabling the integration of renewables and low-carbon gas, and increasing cooperation and coordination among transmission and distribution system operators. The technical support, for example, involves strengthening of administrative capacity, harmonising the legislative frameworks, and sharing of relevant best practices.

Added:(147) This Directive should be without prejudice to the obligations of the Member States relating to the time-limits for the transposition into national law and the date of application of the Directives set out in Annex III, Part B,

Added:HAVE ADOPTED THIS DIRECTIVE:

Added:Subject matter, scope and definitions

Added:-1. This Directive establishes a common framework for the decarbonisation of the gas market. To that end, it promotes the energy efficiency first principle, the integration of renewable gas and further energy system integration, contributes to the prudent and rational use of natural resources and to the achievement of the Union’s climate and energy targets, and provides for fair attributions of costs and benefits as well as for a clear identification of responsibilities among market participants.

Added:1. This Directive establishes common rules for the transmission, distribution, supply and storage of gas using the natural gas and hydrogen system, and consumer protection provisions, with a view to creating a truly integrated, competitive, consumer-centred, flexible, fair, transparent and non-discriminatory gas market in the Union. It lays down the rules relating to the organisation and functioning of those sectors, access to the market, the criteria and procedures applicable to the granting of authorisations for transmission, distribution, supply and storage of gas using the natural gas and hydrogen system and the operation of systems.

Added:2. This Directive establishes rules for the transport, supply and storage of natural gas and the transition, including decommissioning and repurposing, of the natural gas system towards an integrated highly efficient system based on renewable gas and low-carbon gas where no more energy or cost efficient alternatives are available.