Klima-, Energi- og Forsyningsudvalget 2020-21
KEF Alm.del Bilag 367
Offentligt
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The Danish Government’s response to the European Commission’s public
consultation on the Hydrogen and Gas Market Decarbonisation Package
Danish key priorities for the Hydrogen and Gas Market Decarbonisation Package
An efficient green transition of the gas system
o
Modernization of the gas market legislation to support the decarbonisation of the
gas sector through a market for green gasses and by phasing out fossil energy.
Integrate rules for pure hydrogen systems in existing (natural) gas legislation
Provide level playing conditions for various types of gas (harmonised classification
based on climate friendliness)
Tap into existing knowledge of ENTSO-G to facilitate sufficient planning of
conversion to hydrogen and gas quality compatibility
o
o
o
A common framework for a transparent and non-discriminatory market for hydrogen
and other green gasses
o
Draw up guidelines for pure hydrogen which are suited for the maturity of the
hydrogen market
Provide sufficiently flexible rules to facilitate the hydrogen market
Utilise competence of NRA’s to provide flexibility for the emerging hydrogen market
through the posibillity of temporary exemptions
Member States must find their own model for hydrogen transmissions system
operators
o
o
o
Danish support to decarbonisation of the gas market
The Danish Government welcomes a revision of the gas market legislation. It is im-
portant that the revision supports a decarbonisation of the EU energy system and will
be in line with the climate target of at least 55 pct. by 2030 and climate neutrality by
2050. Gas market legislation should be modernized to support the decarbonisation
of the gas sector by paving the way for a market for green gasses such as biogas
and hydrogen and phasing out fossil energy, including unabated natural gas.
Overall, Denmark supports European Commission’s proposal for the development of
a hydrogen market from the natural gas market. The market should be transparent,
supporting a level playing field and sector couplings (e.g. between energy generation
and transportation) and with a strong focus on renewable hydrogen. Appropriate reg-
ulation must take into account the maturity of the hydrogen market. Thus, the EU
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should aim for gas market legislation embracing cross-border trade of flammable
gasses, whether they are biogas/methane based or pure hydrogen.
Conversion of the gas market through green gasses and hydrogen regulation
To achieve the goal of climate neutrality by 2050, a full decarbonisation of Europe’s
energy supply is required. This entails a phase-out of fossil energy, including una-
bated natural gas.
To achieve decarbonisation, the natural gas system, including the established infra-
structure, can play an important role. Converting the natural gas system by expand-
ing the energy infrastructure will enable renewable energy such as biogas and re-
newable hydrogen to flow freely throughout the EU. This can also offer long-term
solutions for storing and distributing renewable energy.
In this regard, legislation for natural gas should take account of new hydrogen sys-
tems. As there is currently no cross-border hydrogen market, gas regulation should
set the rules for such cross-border trade. Since hydrogen is a gas, capable of
transport and storage in a similar manner as biogas/methane, Denmark suggests
incorporating cross-border hydrogen in the Gas Directive and Gas Regulation. Here,
there is need for a well-functioning internal market with harmonized standards if the
principles used for gas market legislation are to be extended to hydrogen.
Consequently, it should be possible to exchange and transport gas across borders.
This is the case for Denmark and our production of biogas. Biogas is produced in
Denmark and is being upgraded to match the natural gas quality before being
brought into the gas system. This makes the renewable gas transportable across the
entire Union. The same approach should be able to extend to hydrogen.
Moreover, if considering the possibility to blend pure hydrogen in the existing gas
mix, it is vital for the green transition of gas markets to ensure that the existing gas
market legislation encompasses this transition. Denmark suggests the conversion of
the biogas/methane infrastructure to pure hydrogen by establishing a single legal
framework with a long-term goal of establishing common legislation.
It is also important that gas market legislation can cover different scenarios, if the
specifics of the green transition are not yet determined. A shift to pure hydrogen may
not happen. A substantial part of Denmark’s
gas consumption (approx.
20 pct.) is
covered by upgraded biogas (renewable methane). The upgraded biogas blends well
with the fossil natural gas so the share of renewable biogas may increase substan-
tially. In Denmark, our ambition is to increase the share to fifty-fifty by 2030. Blending
of methanised green hydrogen is another pathway towards renewable gas.
Rules for pure hydrogen must follow the maturity of the hydrogen market
Full incorporation of the rules from both the electricity and gas market should be the
long-term goal for a mature hydrogen market. However, it might prove a barrier for
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an upcoming hydrogen market. When creating rules for pure hydrogen systems,
these should allow for sound level playing field exemptions. They should, however,
not damage cross-border competition.
Thus, it is vital, that whilst addressing the long-term goals by incorporating hydrogen
rules into the existing legal gas framework, there should also be an option for tem-
porary exceptions. Denmark proposes that common gas market legislation
–
for both
biogas and hydrogen
–
should address whether a specific known rule from the elec-
tricity and gas market is immediately applicable for pure hydrogen. The possibility for
exceptions will thus address the maturity of the hydrogen market.
Such an approach is a feasible way forward but is only possible if there is a strict
requirement for approval and scrutiny by the national regulators. This entails a coor-
dinated approach to exceptions through the European Union Agency for the Coop-
eration of Energy Regulators (ACER) and the Council of European Energy Regula-
tors (CEER). At the same time, Denmark foresees the need for thresholds for when
an exception is disrupting the functioning of the internal market
–
or other sound
principles known from exception rules in the Gas directive Art. 36 and Art. 49 a.
Here, thresholds for exceptions etc. should follow the procedure known from network
codes (through the European Network of Transmission System Operators for Gas
(ENTSO-G) and subsequent approval of Member States), as a coordinated approach
to exceptions needs a political mandate, which national regulators are not able to
provide by themselves.
Role of ENTSO-G and hydrogen
Denmark also finds a need to tap into the existing knowledge embedded in the EN-
TSO-G. It is vital that the ENTSO-G ensures a harmonised approach to planning and
security of supply in the hydrogen sector. Especially when considering that methane
pipes could be converted.
Even though Denmark finds the need for the ENTSO-G to play an active role, and
subsequently also the gas transmission system operators, it should still be a matter
of national competence to decide who should own and operate pure hydrogen sys-
tems. It should be incorporated into the legal framework that Member States retain
their national competence to appoint owners and operators of hydrogen systems.
Facilitating the transition
It is of vital importance to Denmark that there is a strong focus on renewables. At the
same time, Denmark recognises that there is currently work in progress with low-
carbon gas and other decarbonised gasses, which are not renewable, but could
lower the carbon footprint of the existing gas sector. On this subject, Denmark would
like to see a clear and uniform classification of energy forms. Thus, for cross border
trade to function, Member States need to have the same classification of various
types of gas to ensure a focus on renewable gasses.
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