Natural-gas pipelines will be banned from receiving EU energy infrastructure funding, with the money instead being focused on electricity grids, offshore wind power lines and clean-hydrogen networks, according to new rules unveiled on Tuesday by the European Commission.
Since 2014, about €1bn ($1.2bn) of EU taxpayer money has been spent on cross-border natural-gas infrastructure, through the Commission’s Connecting Europe Facility (CEF) fund, which has so far allocated €4.6bn under rules set by the EU’s Trans-European Energy Networks (TEN-E) regulations.
Under the revisions to TEN-E, announced on Tuesday by Energy Commissioner Kadri Simson, natural-gas projects will no longer eligible for EU funding and fast-track permitting.
“Without any doubt, one of the most debated issues in the context of this revision concerns gas,” she said. “While natural gas will play a role in the energy transition in the upcoming decade... the sector needs to start decarbonising.
“The closer we move to our climate neutrality target [in 2050], the more natural gas will be replaced by renewables and low-carbon gases, in particular biogas and hydrogen… We therefore propose to exclude natural gas infrastructure from the future TEN-E policy.
“Instead, the focus is on promoting the uptake of renewable and low-carbon gases and hydrogen in particular.”
She explained that, from now to 2030, investments in electricity grids “will have to double, compared to the last decade, reaching more than €50bn per year”, with €530bn and €65bn of investments needed for offshore grids and clean hydrogen, respectively, by 2030.
“Therefore, it is time to re-design our TEN-E Regulation so that it helps deliver the investments we need in future-proof cross-border infrastructure.”
The TEN-E changes also set out new regulations for fast-tracking offshore grids.
“Member states around the same sea basin will have to set out long-term commitments for offshore generation deployment and put together integrated offshore network development plan,” Simson explained.
“We also propose to streamline the permitting process for cross-border offshore transmission infrastructure by introducing a one-stop shop per sea basin.”
Electrolysers that produce green hydrogen will be included as Projects of Common Interest (PCI) for the first time, but will only be eligible for fast-track permitting, not CEF funding.
CO2 transport infrastructure, as part of carbon capture and storage projects, will remain eligible for CEF funding.
“Finally, we propose a new PCI category for smart clean gas grids targeting the network upgrades necessary for the integration of renewable and low-carbon gases from the local distribution to transmission level,” said Simson.
“Again, let me be very clear here, this category does not mean support to natural gas pipelines. It means allowing for reverse flow of clean gases from the distribution network to the transmission network.”
The new TEN-E regulations will also speed up permitting for important energy infrastructure projects by treating all appeals as urgent and clarifying rules to “avoid duplications between national and EU obligations for public consultations”.
Projects linking non-EU states to the bloc will also become eligible for EU funding for the first time.
The proposed changes still have to be approved by the 27 member states and European Parliament, but are not expected to meet any opposition.