What changed between the draft committee report and the plenary report

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

5 unchanged paragraphs

on the proposal for a regulation of the European Parliament and of the Council on the internal markets for renewable and natural gases and for hydrogen (recast)

(COM(2021)0804 – C90470/2021 – 2021/0424(COD))

(Ordinary legislative procedure – recast)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2021)0804),

Changed:– having regard to Article 294(2) and Article 173(3)194(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90470/2021),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the reasoned opinions submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Czech Chamber of Deputies and the Czech Senate, asserting that the draft legislative act does not comply with the principle of subsidiarity,

Changed:– having regard to the opinion of the European Economic and Social Committee of [xx19 xxMay 2022],2022,

Changed:– having regard to the opinion of the Committee of the Regions of [xx10 xxOctober 2022],2022,

– having regard to the Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts,

Changed:– having regard to the letter of XX2 2022February 2023 sent by the Committee on Legal Affairs to the Committee on Industry, Research and Energy in accordance with Rule 110(3) of its Rules of Procedure,

– having regard to Rules 110 and 59 of its Rules of Procedure,

– having regard to the opinion of the Committee on Agriculture and Rural Development,

Changed:– having regard to the report of the Committee on Industry, Research and Energy (A90000/2022),(A9-0032/2023),

4 unchanged paragraphs

A. whereas, according to the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, the Commission proposal does not include any substantive amendments other than those identified as such in the proposal and whereas, as regards the codification of the unchanged provisions of the earlier acts together with those amendments, the proposal contains a straightforward codification of the existing texts, without any change in their substance;

1. Adopts its position at first reading hereinafter set out, taking into account the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission;

3. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

4. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 1

Removed:Recital 3 a (new): (3a) Recognising the volatilities created by the Union's overdependence on natural gas imports, in particular with regard to a monopolist supplier, and its wider geopolitical, security and economic impact, an effective policy and regulatory framework for internal market penetration of renewable and low-carbon gases, and in particular hydrogen, must ensure that the risk of sustained or new volatilities and dependencies on external suppliers are effectively addressed. For that purpose, the modernisation of existing and commissioning of new import infrastructure linking Member States and the internal market with third countries and external suppliers must take due account of the need for security of supply in terms of diversification of routes and suppliers, including by avoiding overdependence of any Member State with a single export country.

Added:AMENDMENTS BY THE EUROPEAN PARLIAMENT*

Removed:Recital 4: (4) This Regulation aims to facilitate the penetration of renewable and low-carbon gases into the energy system enabling a shift from fossil gas, and to allow these new gases to play an important role towards achieving the EU’s 2030 climate objectives and climate neutrality in 2050. The Regulation aims also to set up a regulatory framework that enables and incentivises all market participants to take the transitional role of fossil gas into account while planning their activities to avoid lock-in effects and ensure gradual and timely phase-out of fossil gas notably in all relevant industrial sectors and for individual heating purposes, while mitigating increasing energy poverty.

Added:to the Commission proposal

Removed:Recital 8: (8) It is, generally, most efficient to finance infrastructure by revenues obtained from the users of that infrastructure and to avoid cross-subsidies. Moreover, such cross-subsidies would, in the case of regulated assets, be incompatible with the general principle of cost-reflective tariffs. In exceptional cases, such cross-subsidies could nonetheless bring societal benefits, in particular during earlier phases of network development where booked capacity is low compared to technical capacity and uncertainty as to when future capacity demand will materialise is significant. Cross-subsidies could therefore contribute to reasonable and predictable tariffs for early network users and de-risk investments for network operators. Cross-subsidies could thus contribute to an investment climate supportive to the Union’s, decarbonisation objectives. Cross-subsidies should not be financed by network users in other Member States and it is thus appropriate to collect financing for cross-subsidies from exit points to final customers within the same Member State and, in addition, from interconnection points for cross-border network financing. Moreover, as cross-subsidies are exceptional, it should be ensured that they are proportional, transparent, limited in time and set under regulatory supervision.

Added:---------------------------------------------------------

Removed:It is important to provide predominantly transit Member States the necessary tools to develop the hydrogen networks without the need to redistribute the costs throughout a limited number of exit points. Therefore, the collection of the dedicated charge that will ease the development of the hydrogen network should not be limited to end-users exit points of the gas network.

Added:2021/0424 (COD)

Removed:Recital 25: (25) Access to natural gas storage facilities, liquefied natural gas (LNG) facilities and hydrogen facilities is insufficient or non-existent in some Member States, and therefore the implementation of the existing rules needs to be improved as regards transparency and the objectives of the communication of the Commission of 18 May 2022 on REPowerEU Plan (the ‘REPowerEU Plan’), in particular rapidly reducing the Union's dependence on Russian energy resources. Such improvement should take into account the potential and uptake of renewable and low-carbon gases, in particular hydrogen and biomethane, for these facilities in the internal market. Monitoring by the European Regulators' Group for Electricity and Gas concluded that the voluntary guidelines for good third-party access practice for storage system operators, agreed by all stakeholders at the Madrid Forum, are being insufficiently applied and therefore need to be made binding.

Added:Proposal for a

Removed:The REPowerEU Plan set ambitious goals for hydrogen imports (10 mln tonnes by 2030) and biomethane production (35 bcm by 2030). This will require securing access to hydrogen and biomethane facilities for relevant Member States.

Added:REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

Removed:Recital 43: (43) The blending of hydrogen into the natural gas system is a last resort solution, as it is less efficient compared to using hydrogen in its pure form and diminishes the value of hydrogen. It also affects the operation of gas infrastructure, end-user applications, and the interoperability of cross-border systems. The priority is the production and use of renewable and low-carbon hydrogen in their pure form in the hard-to-decarbonise sectors, such as in industry and transport applications. At the same time, Member States’ decision on whether to apply blending hydrogen in their national natural gas systems should be preserved. Therefore, harmonised rules on coordination on cross-border restrictions due to differences in hydrogen blending levels will limit the risk of market segmentation.

Added:on the internal markets for renewable gas and natural gas and for hydrogen (recast)

Removed:Recital 47: (47) In order to ensure optimal management of the Union hydrogen network and to allow trading and supplying hydrogen across borders in the Union, ENTSO for Gas should be renamed as the joint EU organisation for Gas Transmission System Operators and Hydrogen Network Operators (ENTSOG&H) and incorporate Hydrogen Network Operators into its membership, while its tasks should be expanded to include hydrogen activities. Those tasks should be carried out in compliance with Union competition rules, be well-defined and be performed in a manner representative to gas and hydrogen. The working method of ENTSOG&H should ensure efficiency and transparency. The network codes prepared by ENTSOG&H should not replace the necessary national network codes for non cross-border issues.

Added:THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Removed:Recital 48: deleted

Added:Having regard to the Treaty on the Functioning of the European Union, and in particular Article 194 (2) thereof,

Removed:Recital 49: (49) In order to ensure the transparent and efficient development of the hydrogen network in the Union, the ENTSOG&H should establish, publish and regularly update a single, non-binding Union-wide ten-year network development plan for gas and hydrogen paying due consideration to the needs of the developing hydrogen markets. Viable hydrogen transportation networks and necessary interconnections, relevant from a commercial point of view, should be included in that network development plan. The ENTSOG&H should continue to participate in the development of the energy system wide cost-benefit analysis – including the interlinked energy market and network model including electricity, gas and hydrogen transport infrastructure as well as storage, LNG and electrolysers –, the scenarios for the ten-year network development plans and the infrastructure gaps identification report as set out in Articles 11, 12 and 13 of [the TEN-E Regulation as proposed in COM(2020) 824 final] for the development of the lists of projects of common interest. For that purpose, the ENTSOG&H should closely cooperate with the ENTSO for Electricity to facilitate system integration.

Added:Having regard to the proposal from the European Commission,

Removed:Recital 50: (50) All market participants have an interest in the work expected of the ENTSOG&H. An effective consultation process is therefore essential. Overall, ENTSOG&H should seek, build on and integrate in its work experience with infrastructure planning, development and operation in cooperation with other relevant market participants and their associations.

Added:After transmission of the draft legislative act to the national parliaments,

Removed:Recital 53: (53) The ENTSOG&H will establish a central, web-based platform for making available all data relevant for market participants to gain effective access to the network.

Added:Having regard to the opinion of the European Economic and Social Committee,

Removed:Recital 57: (57) The network codes prepared by the ENTSOG&H are not intended to replace the necessary national rules for non-cross-border issues.

Added:Having regard to the opinion of the Committee of the Regions,

Removed:Recital 71: (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 they 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 shall ensure that any joint purchasing agreement complies with the EU competition rules, and in particular with the requirements of Article 101 TFEU. The notification done to assess the compliance with this Regulation is without prejudice to the notification of aids granted by States, where applicable, under Article 108(3) TFEU.

Added:Acting in accordance with the ordinary legislative procedure,

Removed:Article 2 – paragraph 1 – point 12: (12) ‘network user’ means a customer or a potential customer of a transmission system operator or hydrogen network operator, and transmission system operators or hydrogen network operators themselves in so far as it is necessary for them to carry out their functions in relation to transport of natural gas and hydrogen;

Added:Whereas:

Removed:Article 3 a (new): Article 3a / Diversification of pipeline natural gas supplies obligation / In order to decrease dependence on pipeline natural gas imports from third countries and to diversify gas supplies to safeguard the security of energy supply and the essential security interests of the Union in line with the REPowerEU Plan objectives, each Member State shall ensure that pipeline natural gas supplied from any third country does not exceed 33% of relevant Member State's annual natural gas imports by 31 December 2026 and 25% by 31 December 2029. Those limitations shall not apply to imports from European Economic Area countries.

Added:(1) Regulation (EU) No 715/2009 of the European Parliament and of the Council has been substantially amended several times. Since further amendments are to be made, that Regulation should be recast in the interests of clarity.

Removed:Article 3 b (new): Article 3b / Mainstreaming biomethane in the gas system / In order to support sustainable production of biomethane to safeguard the security of gas supply in the Union and decrease dependence on fossil natural gas imports, Member States shall, by 31 December 2030, ensure collectively that at least 35 bcm of biomethane is produced and injected into natural gas system at transmission system operators and distribution system operators levels in line with the REPowerEU Plan objectives.

Added:(2) The internal market in natural gas, which has been progressively implemented since 1999, aims to deliver real choice for all consumers in the Union, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices and higher standards of service, and to contribute to security of supply and sustainability.

Removed:Article 3 c (new): Article 3c / Upscaling renewable gases and low-carbon gases in coal and carbon-intensive regions / The Commission shall support and provide incentives to encourage the penetration of renewable gases and low-carbon gases, in particular hydrogen and biomethane, into the Union energy system, in particular in coal and carbon-intensive regions pursuant to Regulation (EU) 2021/1056 through an enabling framework that includes: / (a) additional financial resources, including Union funds, to facilitate a just transition of these regions with the aim of increasing the share of renewable gases and low-carbon gases, in particular in industrial processes, district heating and energy storage for enhancing flexibility of the energy system; / (b) effective support measures to accelerate the phase out of solid fossil fuels in industrial and district heating sectors through investments in their modernisation, innovation and development as well as to decarbonise existing fossil-based hydrogen production sites; / (c) upskilling and reskilling programmes and projects aiming to create and strengthen a hydrogen-ready workforce; / (d) the fast-track implementation of hydrogen valleys and Important Projects of Common European Interests (IPCEI), in particular innovation projects enabling the conversion from fossil fuels to renewable hydrogen and biomethane.

Added:(3) The Commission communication of 11 December 2019 entitled ‘The European Green Deal’ and Regulation (EU) 2021/1119 of the European Parliament and of the Council set the target for the Union to reduce its emissions by at least 55% compared to 1990 levels by 2030 and become climate neutral by 2050 in a manner that contributes to Union competitiveness, growth and jobs. This Regulation should contribute to achieving those targets. For a decarbonised gas markets to be set up and contribute to the energy transition, significantly higher shares of renewable energy sources in an integrated energy system with an active participation of consumers in competitive markets are needed.

Removed:Article 4 – paragraph 2 – introductory part: 2. Notwithstanding paragraph 1, a Member State may allow financial transfers between regulated services that are separate as meant in the first paragraph, provided that:

Added:(3a) Recognising the volatilities created by the Union's overdependence on natural gas imports, in particular with regard to a monopolist supplier, and its wider geopolitical, security and economic impact, an effective policy and regulatory framework for internal market penetration of renewable gas and low-carbon gas, and in particular hydrogen, must ensure that the risk of sustained or new volatilities and dependencies on external suppliers are effectively addressed. To that end, the modernisation of existing and commissioning of new import infrastructure linking Member States and the internal market with third countries and external suppliers must take due account of the need for security of supply in terms of diversification of routes and suppliers, including by avoiding overdependence of any Member State on a single export country.

Removed:Article 4 – paragraph 2 – point b: (b) the dedicated charge is collected from exit points to final customers located on any network within the same Member States as the beneficiary of the financial transfer; for cross-system network use financing, the dedicated charge may, additionally, be collected from other points, such as interconnection points, provided that the regulatory authorities of the Member States where the interconnection points are located reach an agreement; where the regulatory authorities concerned cannot reach an agreement within six months, ACER shall take a decision, following the process pursuant to Article 6(10) of Regulation (EU) 2019/942;

Added:(3b) In light of the Russian Federation's unprovoked and unjustified military aggression against Ukraine and in order to prevent putting at risk the Union's energy security, the natural gas, renewable gas and low-carbon gas originating from the Russian Federation or other bodies controlled by Russian natural or legal persons or undertakings established in the Russian Federation, should be excluded from the Member States' and Union's imports.