EU Hydrogen and the Decarbonized Gas Market Package : Unbundling, Third-Party Access, Tariffs and Discounts Rules at the Core of Transport of Hydrogen

The current European energy crisis, prompted by the Russian invasion of Ukraine, created an unparalleled set of legislative efforts and regulatory developments in the European Union (“EU”) throughout 2022. Some initiatives were made in response to the crisis while others had been in the legislative pipeline for a while. The regulation of gases in Europe, both of natural gas and hydrogen, lies somewhere in between these two positions. Since December 2021, the European Commission (“the Commission”) and the EU legislature, the European Parliament and the Council of the European Union have been working towards the adoption of a legislative proposal related to the decarbonization of the EU gas market by integrating renewable and low carbon gases and creating a framework applicable to the developing hydrogen market: the so-called “Draft Hydrogen and Decarbonised Gas Market Package”.In this chapter, we seek to explore key regulatory elements connected to the regulation of hydrogen infrastructure in light of the ongoing legislative proposals: third-party access, unbundling and the tariffs applicable to the use of the transmission network. We should preface our work with two comments on the content thereof. First, one of the most salient features of this regulatory development is that hydrogen infrastructure is existing only to a minimal extent, and with reports pointing to no more than 3,000 km of insulated pipelines in Europe and the US. Thus, the regulation is being developed before any large projects are in place, contrary to the case of electricity and natural gas. In the regulation of hydrogen, therefore, the rules precede the market. Secondly, the proposed texts and provisions we analyse are not final, consequently by the time of publication of this article, our research may have been superseded by new text proposals or the final approved and enacted texts. Nonetheless, we are confident that the issues of unbundling, third-party access and tariffs remain key to the future regulation of hydrogen infrastructure and have a preponderant role in the regulatory texts. Without these tools it would be challenging to effectively develop an EU internal or even national market