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Position paper - EU hydrogen and gas market decarbonisation package
AmCham EU welcomes the European Commission (Commission) proposal for a recast Gas Directive and Regulation. The proposal reflects the EU’s increased ambitions for reform in the gas market to reduce greenhouse gas emissions and for the deployment of sustainable and decarbonised hydrogen, gases and fuels.
In light of Russia’s war on Ukraine, the reform of the gas market tabled by the Commission last December will need to be revised and accelerated, as was acknowledged by the Commission in the REPowerEU Communications. Reducing the EU’s dependence on Russian natural gas has become one of the EU’s main objectives, and the regulatory framework must enable the ever-faster deployment of renewable and low-carbon alternatives to natural gas. At the same time, the Commission must take an objective and rational approach so as to not destroy those areas of the economy where natural gas is still required in the mid- or long-term when combined with carbon capture and storage or used as feedstock.
In this respect, key areas where the Commission’s proposal can be improved include:
- Provide, as soon as possible, the methodology and reference point applicable to calculating the greenhouse gas emissions reduction at the core of the definition of the newly introduced notion of ‘low-carbon hydrogen, gases, and fuels’. Only then can the market determine what, in practice, can benefit from this status and thereby trigger investment. The definition of low-carbon hydrogen, gases and fuels should be harmonised throughout EU law.
- Treat low-carbon hydrogen, gases and fuels in a non-discriminatory and technology-neutral way compared to renewable fuels and in light of their respective climate benefits.
- Clarify the prohibition of long-term supply contracts for ‘unabated fossil gas’ on the basis of the ultimate use of the gas, not the product at stake in such contracts. This would ensure supply security for EU regions that will need natural gas for energy purposes beyond 2050 (as long as they use carbon capture and storage technology), or for companies that will use natural gas as a feedstock without greenhouse gas emissions.
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