Gas and hydrogen package: the Council adopted its position, Parliament took its own in March. What about biomethane?

On 28 March 2023 the Council of the EU agreed a general approach to the package of acts on the markets for renewable gas, natural gas and hydrogen, and the European Parliament adopted its position on 15 March. The package recasts the directive and the regulation on the internal gas market and is meant to prepare the EU gas system for the transition: to make it easier to feed in renewable and low-carbon gases and to create a framework for hydrogen. The Council extended the transitional period, during which the hydrogen market rules may be more lenient, until the end of 2035.

What is changing

The Commission's proposal of December 2021 provides for many changes, particularly important for biomethane:

• easier grid connection for installations producing renewable gas,
• the possibility of reduced transmission tariffs for renewable and low-carbon gases fed into the system,
• common rules for certifying low-carbon gases and an extension of the guarantees of origin system,
• network planning that takes renewable gases and hydrogen into account,
• rules for the operation of hydrogen networks, including operators and unbundling.

Parliament and the Council differ on the details: the level of consumer protection, transitional periods, the rules on blending hydrogen in the grid and the certification rules. For biomethane, the most important provisions are those facilitating connection and lowering the cost of grid access.

Significance for the industry in Poland

For the Polish biogas industry the package is crucial, because it will set the framework for biomethane in the gas system. The country does not yet have complete national rules, so EU requirements on connection and tariffs may serve as a model for Polish regulations. Network operators, including GAZ-SYSTEM and the distribution system operators, will in turn have to take renewable gases into account when planning network development.

It is worth remembering the role of hydrogen: introducing it into the grid in a mixture with natural gas affects the quality parameters of the gas, including biomethane, and the appliances of customers. Setting common rules for the limit values of gas parameters is of great importance for investment planning.

What matters for biomethane producers

In practice a biomethane producer looks at three things: whether the network operator has an obligation to connect on clear terms, how charges for feeding gas into the grid are calculated, and how the certificate confirming the renewable character of the gas will be recognised. Each of these elements affects profitability. From the grid's perspective, gas quality standards and the ability to take biomethane during periods of low demand, for example in summer when gas consumption falls, are important.

What next

Once both institutions have adopted their positions, trilogue negotiations will begin. The parties must agree the rules for hydrogen, tariffs and the certification of low-carbon gases. The biogas industry will press for provisions guaranteeing non-discriminatory grid access and charges that encourage the injection of renewable gas.