Supporting the EU in developing their hydrogen network

We supported the European Commission in defining its new market rules for hydrogen which were published on 15 December as part of the ECā€™s new ā€˜Decarbonisation Gas Markets Packageā€™ proposal under the ā€˜Fit for 55 Packageā€™, also known as the European Green Deal.

Together with hydrogen and gas market experts from Guidehouse, Frontier Economics and Artelys, we created a framework for the impact assessment for this new rulemaking, which has to carefully balance the benefits of network integration with the benefits of allowing market actors to find the most efficient path to creating a pan-European hydrogen grid.

The ECā€™s proposal contains three key points:

  • In principle, the regulatory principles that the EU already has in place for electricity and gas networks should also apply to hydrogen networks, including vertical unbundling, regulated third party access (TPA) and tariff regulation.
  • However, given the early stages of hydrogen network development, a transition phase will apply until 2030. In this phase, regulatory exemptions for existing hydrogen networks are possible.
  • The costs of hydrogen networks are to be borne by hydrogen network users, rather than shared between natural gas and hydrogen customers by the utility supplying both groups. However, during the early stage of hydrogen network development some cross-subsidisation between hydrogen, gas and electricity networks can be granted.

You can read our report for the EC here.