Member states set to dilute proposal for single hydrogen entity

Plans tabled by the European Commission to impose a single entity overseeing the future hydrogen market look set to be diluted but not abandoned if a compromise proposal by the Spanish presidency gains traction at negotiations in Brussels this week (8 December), according to EU diplomats.

MEPs and Energy Ministers will gather in Brussels in an attempt to finalise the regulation that will determine governance of the hydrogen market in the bloc during a so-called trilogue discussion between the Commission, the Parliament and the Council.

One of several sticking points in the talks persists over the creation of a single entity to promote a dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction — the so-called European Network of Network Operators for Hydrogen. Originally proposed by the Commission, such an entity is backed by the majority of EU countries, including France, Germany, Luxembourg and Spain, according to a well-placed European Parliament source, but the legislative body opposes the idea and has instead proposed to reform the existing network of natural gas transmission operating entities to also cover hydrogen network operators.

A source from the socialists group told Euronews that the European Parliament position needs to move closer to the Council’s since most member states are very keen on the idea of a single entity model.

Czechia, Greece, Romania and Bulgaria however have backed the Parliament’s position, which would see merger of the markets for hydrogen and natural gas within the network of existing gas operators, an EU diplomat told Euronews.

“The likely outcome is to have two separate entities with a phase-in period, where initially a lot of operational procedures would be common, moving towards more independence for an independent hydrogen [entity] in the coming years,” the diplomat said.

“This would address Parliament’s concerns but also those from some Member States who are worried about the cost of an independent hydrogen operator for those who lack hydrogen networks,” the diplomat added.

Another EU diplomat told Euronews that a compromise proposal by the EU Spanish Presidency, which would see an independent hydrogen entity launched in the context of enhanced cooperation with the existing European gas and electricity operators, has gained the support of the majority of member states.

“We need to avoid giving the ‘hydrogen keys’ to the gas sector. Combining these two entities [European gas operators with a hydrogen operator] would contribute for more gas repurposing. We need an independent operator,” a Green Parliamentary Assistant told Euronews .

“Postponing it [the creation of a dedicated body] to ‘when the hydrogen sector is developed’ as proposed by the Spanish Presidency should be avoided, as it could be subject to arbitrary interpretation,” a spokesperson for industry association Hydrogen Europe told Euronews.

If EU Energy Ministers reach an agreement on December 8, the law will pass by the Industry, Research and Energy Committee before its final adoption expected by March 2024.