Traders Welcome EU Plan for Hydrogen Strategy

The European Federation of Energy Traders (Efet) has welcomed the European Commission (EC)'s roadmap for an EU hydrogen strategy, published in late May, the association said on June 11. 

The EC says investment in hydrogen will help the EU meet its 2050 climate-neutral goal while also supporting the post-coronavirus economic recovery. It plans to adopt a new strategy by the end of this month.

The objectives of the initiative "reflect the interest of Efet in cost-effective decarbonisation of the European economy by harnessing market mechanisms and linking the gas and power markets at wholesale level," Efet said in a statement. "In order to contribute to the overall efficiency and flexibility of Europe's energy system, hydrogen must become an integral part of the European internal energy market."

The European Network Codes and other existing regulations like the Renewable Energy Directive II will need to be revised to ensure "a harmonised regulatory framework for the future gas market in Europe – where hydrogen, as well as other low carbon, renewable and decarbonised gases, are set to play a more prominent role."

The EU's emissions trading system will also need to be expanded and reformed, recognising the carbon abatement achieved by replacing natural gas with abated hydrogen.

In order for the EU economy to be decarbonised cost-effectively, the hydrogen strategy and the EU energy system integration strategy should also be supported by an economy-wide climate neutrality objective at an EU level, Efet said. Market-based mechanisms must also used and market instruments adapted to enable financial support for low-carbon energy sources, while respecting sectoral unbundling rules. Pan-European coordination and cross-border implementation of financial support schemes for renewable, decarbonised and low carbon gases should be ensured, especially in case national end-use prohibitions of hydrocarbons are foreseen.

There also needs to be technological neutrality, establishing a level playing field between power and gas systems so that users face the costs that reflect both types of grid without cross-subsidy, Efet said.