Competitive, customer-centred, flexible and non-discriminatory markets for natural gas and hydrogen
1. Member States shall ensure that all customers are free to purchase natural gas and hydrogen from the supplier of their choice and shall ensure that all customers are free to have more than one supply contract for natural gas or hydrogen at the same time, provided that the required connection and metering points are established.
2. Member States shall ensure that their national law does not unduly hamper cross-border trade in natural gas and hydrogen, the functioning and emergence of liquid trading for natural gas and hydrogen, consumer participation, investments into, in particular, renewable gas and low-carbon gas, or energy storage between Member States, and shall ensure that prices for natural gas and hydrogen reflect actual demand and supply.
3. Member States shall ensure that no undue barriers exist within the internal markets for natural gas and hydrogen as regards market entry and exit, trading and operation.
4. Member States and regulatory authorities shall ensure that energy undertakings are subject to transparent, proportionate and non-discriminatory rules, fees and treatment, in particular with regard to connection to the network, access to wholesale markets, access to data, switching processes and billing regimes and, where applicable, licensing.
5. Member States shall ensure that market participants from third countries, when operating within the internal markets for natural gas and hydrogen, comply with applicable Union and national law, including that relating to environment and safety.
6. Member States shall ensure a customer-centred and energy efficient approach in the market for hydrogen. The use of hydrogen shall be targeted for customers in hard-to-decarbonise sectors with a high greenhouse gas abatement potential where no more energy and cost-efficient options are available.
7. Member States shall ensure that this Directive is implemented in a manner which fosters energy system integration while not unduly discriminating against more energy efficient solutions, such as direct electrification, in line with the energy efficiency first principle.
Market-based supply prices
1. Suppliers shall be free to determine the price at which they supply natural gas and hydrogen to customers. Member States shall take appropriate actions to ensure effective competition between suppliers and to ensure reasonable prices for the final customers.
2. Member States shall ensure the protection of customers affected by energy poverty and vulnerable household customers pursuant to Articles 26 to 29 by social policy or by other means than public interventions in the price setting for the supply of natural gas and hydrogen.
3. By way of derogation from paragraphs 1 and 2, Member States may apply public interventions in the price setting for the supply of natural gas to customers affected by energy poverty or vulnerable household customers. Such public interventions shall be subject to the conditions set out in paragraphs 4 and 5.
4. Public interventions in the price setting for the supply of natural gas shall:
(a)
pursue a general economic interest and not go beyond what is necessary to achieve that general economic interest;
(b)
be clearly defined, transparent, non-discriminatory and verifiable;
(c)
guarantee equal access for Union natural gas undertakings to customers;
(d)
be limited in time and proportionate as regards their beneficiaries;
(e)
not result in additional costs for market participants in a discriminatory way;
(f)
not hamper the gradual and timely phase-out of fossil gas in order to reach the Union 2030 climate target and climate-neutrality objective set out in Regulation (EU) 2021/1119.
5. Any Member State applying public interventions in the price setting for the supply of natural gas in accordance with paragraph 3 of this Article shall also comply with Article 3(3), point (d), and Article 24 of Regulation (EU) 2018/1999, regardless of whether the Member State concerned has a significant number of household customers affected by energy poverty. Prior to the removal of public interventions in the price setting for the supply of natural gas, Member States shall ensure adequate support measures for customers affected by energy poverty and vulnerable household customers in accordance with paragraph 2 of this Article.
6. In order to establish effective competition for natural gas supply contracts between suppliers, and to achieve fully effective market-based and affordable retail pricing of natural gas in accordance with paragraph 1, Member States may, for a transitional period, apply public interventions in the price setting for the supply of natural gas to household customers that do not benefit from public interventions pursuant to paragraph 3, and to microenterprises.
7. Public interventions pursuant to paragraph 6 shall comply with the criteria set out in paragraph 4 and shall:
(a)
be accompanied by a set of measures to achieve effective competition and a methodology for assessing progress with regard to those measures;
(b)
be set using a methodology that ensures non-discriminatory treatment of suppliers;
(c)
be set at a price that is above cost, at a level where effective price competition can occur;
(d)
be designed to minimise any negative impact on the wholesale market for natural gas;
(e)
ensure that all beneficiaries of such public interventions have the possibility to choose competitive market offers and are directly informed at least every quarter of the availability of offers and savings in the competitive market, and shall ensure that they are provided with assistance to switch to a market-based offer;
(f)
ensure, in the case the Member State proceeds with the deployment of smart metering systems in accordance with Article 17, that all beneficiaries of such public interventions are directly informed of the possibility of installing smart meters and are provided with necessary assistance;
(g)
not lead to direct cross-subsidisation between customers supplied at free market prices and those supplied at regulated supply prices.
8. Member States shall notify the measures taken in accordance with paragraphs 3 and 6 to the Commission within one month after their adoption and may apply them immediately. The notification shall be accompanied by an explanation of why other instruments were not sufficient to achieve the objective pursued, of how the requirements set out in paragraphs 4, 5 and 7 are fulfilled and of the effects of the notified measures on competition. The notification shall describe the scope of the beneficiaries, in particular customers affected by energy poverty and vulnerable household customers, as well as potential other beneficiaries, the duration of the measures and the number of household customers affected by the measures, and shall explain how the regulated prices have been determined.
9. By 15 March 2025 and every two years thereafter, as part of the integrated national energy and climate progress reports, Member States shall submit reports to the Commission on the implementation of this Article and the necessity and proportionality of public interventions under this Article, and an assessment of the progress towards achieving effective competition between suppliers and the transition to market-based prices. Member States that apply regulated prices in accordance with paragraph 6 shall report on the compliance with the conditions set out in paragraph 7, including on compliance by suppliers that are required to apply such interventions, as well as on the impact of regulated prices on the finances of those suppliers.
10. The Commission shall review the implementation of this Article for the purpose of achieving market-based retail pricing of natural gas and submit a report to the European Parliament and to the Council. The report shall, where appropriate, include an assessment of the impact of those measures on the progress in achieving the Union’s climate-neutrality objective and the other energy and climate objectives. It may be combined with the report referred to in Article 5(10) of Directive (EU) 2019/944 on the implementation of that Article. The report shall be submitted together with or followed by a legislative proposal, if appropriate. Such a legislative proposal may include an end date for regulated prices.
Access to affordable energy during a natural gas price crisis
1. The Council may, acting on a proposal from the Commission, by means of an implementing decision, declare a regional or Union-wide natural gas price crisis, if the following conditions are met:
(a)
the existence of very high average prices in wholesale natural gas markets of at least two-and-a-half times the average price during the previous five years, and at least 180 EUR/MWh, which is expected to continue for at least six months, subject to the calculation of the average price during the previous five years not taking into account periods during which a regional or Union-wide natural gas price crisis was declared;
(b)
sharp increases in natural gas retail prices in the range of 70 % occur which are expected to continue for at least three months.
2. The implementing decision referred to in paragraph 1 shall specify its period of validity which may be for a period of up to one year. That period may be extended in accordance with the procedure set out in paragraph 8 for consecutive periods of up to one year.
3. The declaration of a regional or Union-wide natural gas price crisis pursuant to paragraph 1 shall ensure a fair competition and trade across all Member States affected by the implementing decision so that the internal market is not unduly distorted.
4. Where the conditions laid down in paragraph 1 are fulfilled, the Commission shall submit a proposal to declare a regional or Union-wide natural gas price crisis which shall include the proposed period of validity of the implementing decision.
5. The Council, acting by a qualified majority, may amend a Commission proposal submitted pursuant to paragraph 4 or 8.
6. Where the Council has adopted an implementing decision pursuant to paragraph 1 of this Article, Member States may, for the duration of the validity of that decision, apply temporary targeted public interventions in price setting for the supply of natural gas to small and medium-sized enterprises (SMEs), household customers and essential social services as defined in Article 2, point (4), of Regulation (EU) 2017/1938. Such public interventions shall:
(a)
be limited to at most 70 % of the beneficiary’s consumption during the same period of the previous year and retain an incentive for demand reduction;
(b)
comply with the conditions set out in Article 4(4) and (7);
(c)
where relevant, comply with the conditions set out in paragraph 7;
(d)
be designed to minimise any negative fragmentation of the internal market.
7. Where the Council has adopted an implementing decision pursuant to paragraph 1 of this Article, Member States may for the duration of the validity of that decision, by way of derogation from Article 4(7), point (c), when applying targeted public interventions in price setting for the supply of natural gas pursuant to Article 4(6) or to paragraph 6 of this Article, exceptionally and temporarily set a price for the supply of natural gas which is below cost provided that the following conditions are fulfilled:
(a)
the price set for household customers only applies, at most, to 80 % of median household consumption and retains an incentive for demand reduction;
(b)
there is no discrimination between suppliers;
(c)
suppliers are compensated for supplying below cost in a transparent and non-discriminatory manner;
(d)
all suppliers are eligible to provide offers for the price for the supply of natural gas which is below cost on the same basis;
(e)
measures proposed do not distort the internal market for natural gas.
8. In due time before the expiry of the period of validity specified pursuant to paragraph 2, the Commission shall assess whether the conditions laid down in paragraph 1 continue to be fulfilled. If the Commission considers that the conditions laid down in paragraph 1 continue to be fulfilled, it shall submit to the Council a proposal to extend the period of validity of an implementing decision adopted pursuant to paragraph 1. Where the Council decides to extend the period of validity, paragraphs 6 and 7 shall apply during such extended period.
The Commission shall continuously assess and monitor the impact resulting from any measures adopted under this Article and publish on a regular basis the results of such assessments.
Public service obligations
1. Member States shall ensure, on the basis of their institutional organisation and with due regard to the principle of subsidiarity, that, without prejudice to paragraph 2, natural gas and hydrogen undertakings are operated in accordance with the principles of this Directive with a view to achieving competitive, secure and environmentally sustainable markets for natural gas and hydrogen. Member States shall not discriminate between those undertakings as regards their rights or obligations.
2. Having full regard to the relevant provisions of the TFEU, in particular Article 106 thereof, Member States may impose on natural gas and hydrogen undertakings, in the general economic interest, public service obligations which may relate to security, including security of supply, regularity and quality of supplies, and environmental protection, including energy efficiency, energy from renewable sources and climate protection and to the price of natural gas supply. Such obligations shall be clearly defined, transparent, non-discriminatory, verifiable and shall guarantee equality of access for natural gas undertakings and hydrogen undertakings of the Union to national consumers. Public service obligations which concern public interventions in the price setting for the supply of natural gas shall comply with the requirements set out in Articles 4 and 5 of this Directive.
3. Public service obligations related to the security of gas supply shall ensure compliance of natural gas undertakings with the gas supply standard pursuant to Article 6 of Regulation (EU) 2017/1938 and shall be consistent with the results of the national risk assessments carried out pursuant to Article 7(3) of that Regulation, as detailed in the preventive action plans prepared pursuant to Article 9(1), points (c), (d) and (k), of that Regulation. Public service obligations going beyond what is necessary to ensure compliance with Article 6 of Regulation (EU) 2017/1938 shall comply with the criteria set out in Article 8(1) of that Regulation.
4. Where financial compensation or other forms of compensation are granted by a Member State for the fulfilment of the obligations set out in this Article, it shall be done in a non-discriminatory and transparent manner.
5. Member States shall, upon transposition of this Directive, inform the Commission of all measures adopted to fulfil public service obligations, including consumer and environmental protection, and their possible effect on national and international competition, whether or not such measures require a derogation from this Directive. They shall notify the Commission subsequently every two years of any changes to such measures, whether or not they require a derogation from this Directive.
6. When imposing public service obligations pursuant to paragraph 2, Member States shall consult the relevant stakeholders at an early stage and in an open, inclusive and transparent manner. All official documents related to the consultations and documents used for development of the public service obligation shall be made public while preserving the confidentiality of commercially sensitive information and data protection.
Promotion of regional cooperation and integration
1. Member States as well as the regulatory authorities shall cooperate with each other for the purpose of integrating their national markets at one and more regional levels, towards the creation of regional markets, where Member States or their regulatory authorities so decide, and further towards the creation of a fully liberalised internal market. In particular, Member States or, where Member States have so provided, the regulatory authorities shall promote and facilitate the cooperation of natural gas transmission system operators and hydrogen transmission network operators at a regional level, including on cross-border issues and on the decommissioning of assets, with the aim of ensuring cost-effective decarbonisation in line with the Union’s climate-neutrality objective and creating competitive internal markets for natural gas and hydrogen, foster the consistency of their legal, regulatory and technical framework and facilitate integration of the isolated systems forming natural gas islands that persist in the Union. The geographical areas covered by such regional cooperation shall include cooperation in geographical areas defined in accordance with Article 31(3) of Regulation (EU) 2024/1789. Such cooperation may cover other geographical areas. Where the Commission considers that the rules at Union level are relevant for the regional integration of markets for natural gas and hydrogen, it shall provide appropriate non-binding guidance taking into account the specificities of those markets and the impact on neighbouring markets.
2. The Agency for the Cooperation of Energy Regulators (ACER) shall cooperate with regulatory authorities and transmission system operators and hydrogen transmission network operators to ensure the compatibility of regulatory frameworks between and within the regions with the aim of creating competitive internal markets for natural gas and hydrogen. Where ACER considers that binding rules on such cooperation are required, it shall make appropriate recommendations.
3. Where vertically integrated transmission system operators participate in a joint undertaking established for implementing such cooperation, the joint undertaking shall establish and implement a compliance programme which sets out the measures to be taken to ensure that discriminatory and anticompetitive conduct is excluded. That compliance programme shall set out the specific obligations of employees to meet the objective of excluding discriminatory and anticompetitive conduct. It shall be subject to the approval of ACER. Compliance with the programme shall be independently monitored by the compliance officers of the vertically integrated transmission system operators.
Authorisation procedure
1. In circumstances where an authorisation, such as a licence, permission, concession, consent or approval, is required for the construction or operation of natural gas facilities, hydrogen production facilities and hydrogen system infrastructure, the Member States or any competent authority they designate shall grant authorisations to build or operate such facilities, infrastructure, pipelines or associated equipment on their territory, in accordance with paragraphs 2 to 11. Member States or any competent authority they designate may also grant authorisations on the same basis for the supply of natural gas and hydrogen and for wholesale customers.
2. Where Member States have a system of authorisation, they shall lay down objective and non-discriminatory criteria and transparent procedures, which shall be met where an undertaking applies for an authorisation to supply natural gas and hydrogen or to construct or operate natural gas facilities, hydrogen production facilities or hydrogen system infrastructure. The criteria and procedures for the granting of authorisations shall be made public. Member States shall ensure that authorisation procedures for such facilities, infrastructure, pipelines or associated equipment take into account the importance of the project for the internal markets for natural gas and hydrogen where appropriate. Member States shall ensure consistency of the system of authorisation for hydrogen system infrastructure with the network development plans for hydrogen transmission and distribution networks adopted pursuant to Articles 55 and 56.
3. For natural gas suppliers, Member States may assess the financial strength and technical capabilities of applicants as criteria for authorisation. Such criteria shall be fully transparent and non-discriminatory.
4. Member States shall ensure that any national rules concerning the authorisation procedure referred to in this Article are proportionate, necessary and contribute to the implementation of the general rules for the organisation of the markets for natural gas and hydrogen and infrastructure access, to the energy efficiency first principle, to achieving the Union’s climate and energy targets and to the implementation of Member States’ integrated national energy and climate plans, as well as their long-term strategies adopted pursuant to Regulation (EU) 2018/1999.
5. The authorisation procedures for the activities referred to in paragraph 1 shall not exceed two years, including all relevant procedures of competent authorities. Where duly justified on the grounds of extraordinary circumstances, that two-year period may be extended by up to one year.
6. Member States shall assess which national legislative and non-legislative measures are necessary to streamline authorisation procedures, including, without hampering, any procedural steps related to environmental impact assessment procedures and public consultations. Member States shall report to the Commission on the results of such an assessment as part of their integrated national energy and climate plans as referred to in Article 3 of Regulation (EU) 2018/1999, and in accordance with the procedure set out in Articles 7 to 12 of that Regulation, and as part of their integrated national energy and climate progress reports pursuant to Article 17 of that Regulation.
7. The time limits established in paragraph 5 of this Article shall apply without prejudice to obligations under applicable Union environmental and energy law, including Directive (EU) 2018/2001, to judicial appeals, remedies and other proceedings before a court or tribunal, and to alternative dispute resolution mechanisms, including complaints procedures, non-judicial appeals and remedies, and may be extended for the duration of such procedures.
8. Member States shall set up or designate one or more contact points. Those contact points shall, upon request by the applicant, and free of charge, guide the applicant through and facilitate the entire authorisation procedure for the activities referred to in paragraph 1 up to the delivery by the responsible authorities at the end of the procedure. The applicant shall not be required to contact more than one contact point for the entire process.
9. Member States shall ensure that authorisations under national law for the construction and operation of natural gas system infrastructure also apply to hydrogen system infrastructure. This is without prejudice to the right of Member States to revoke those authorisations if the hydrogen infrastructure does not comply with technical safety rules for hydrogen system infrastructure set out in Union or national law.
10. Member States shall ensure that existing land-use rights for the construction and operation of natural gas pipelines and other network assets shall be also applied to pipelines and other network assets for the transport of hydrogen.
11. In the event of a transfer of infrastructure ownership within the same undertaking to meet the requirements of Article 69, the authorisations and land-use rights pertaining to that infrastructure shall equally be transferred to the new owner.
12. Member States shall ensure that the reasons for any refusal to grant an authorisation are objective and non-discriminatory and that they are provided to the applicant. Reasons for such refusals shall be notified to the Commission for information. Member States shall establish a procedure enabling the applicant to appeal against such refusals.
13. For the development of newly supplied areas and efficient operation generally, and without prejudice to Article 34, Member States may decline to grant a further authorisation to build and operate distribution pipeline systems for natural gas in any particular area, once such pipeline systems have been or are authorised to be built in that area and if existing or proposed capacity is not saturated.
14. Member States shall decline to grant an authorisation to construct and operate a transmission or a distribution infrastructure for natural gas in areas where the network development plan pursuant to Article 55 provides for the decommissioning of the transmission system or relevant parts thereof or a distribution network decommissioning plan has been approved pursuant to Article 57.
15. Where an authorisation within the meaning of paragraph 1 of this Article falls within the scope of application of Article 15 and Articles 15b to 17 of Directive (EU) 2018/2001, only those provisions shall apply.
Certification of renewable gas and low-carbon fuels
1. Renewable gas shall be certified in accordance with Articles 29, 29a and 30 of Directive (EU) 2018/2001. Low-carbon fuels shall be certified in accordance with this Article.
2. In order to ensure that the greenhouse gas emissions savings from the use of low-carbon fuels are at least 70 %, Member States shall require economic operators to show that that threshold and the requirements established in the methodology referred to in paragraph 5 of this Article have been complied with. For those purposes, they shall require economic operators to use a mass balance system in line with Article 30(1) and (2) of Directive (EU) 2018/2001.
3. Member States shall ensure that economic operators submit reliable information regarding compliance with the 70 % greenhouse gas emissions savings threshold referred to in paragraph 2 and with the greenhouse gas emissions saving methodology referred to in paragraph 5, and that economic operators make available to the relevant Member State, upon request, the data that were used to provide that information. Member States shall require economic operators to put in place an adequate standard of independent auditing of the information submitted, and to provide evidence that this has been done. The auditing shall verify that the systems used by economic operators are accurate, reliable and protected against fraud.
4. The obligations laid down in paragraph 2 shall apply regardless of whether low-carbon fuels are produced within the Union or are imported. Information about the geographic origin and feedstock type of low-carbon fuels or low-carbon hydrogen per fuel supplier shall be made available to consumers on the websites of operators, suppliers or the relevant competent authorities and shall be updated on an annual basis.
5. By 5 August 2025, the Commission shall adopt delegated acts in accordance with Article 90 to supplement this Directive by specifying the methodology for assessing greenhouse gas emissions savings from low-carbon fuels. That methodology shall ensure that credit for avoided emissions is not given for carbon dioxide from fossil sources the capture of which has already received an emission credit under other provisions of law and shall cover the life cycle of greenhouse gas emissions and consider indirect emissions resulting from the diversion of rigid inputs. That methodology shall be consistent with the methodology for assessing greenhouse gas emissions savings from renewable liquid and gaseous transport fuels of non-biological origin and from recycled carbon fuels, including the treatment of emissions due to the leakage of hydrogen, and take into account methane upstream emissions and actual carbon capture rates.
6. Where appropriate, the Commission shall submit a report to the European Parliament and to the Council that evaluates hydrogen leakage, including environmental and climate risks, technical specificities and adequate maximum hydrogen leakage rates. On the basis of that report, the Commission shall, if appropriate, submit a legislative proposal to introduce measures that minimise possible risks of hydrogen leakage, set maximum hydrogen leakage rates and establish compliance mechanisms. Relevant maximum hydrogen leakage rates shall be included in the methodology referred to in paragraph 5.
7. The Commission may adopt decisions recognising that voluntary national or international schemes setting standards for the production of low-carbon fuels or low-carbon hydrogen provide accurate data on greenhouse gas emission savings for the purposes of this Article and demonstrate compliance with the methodology referred to in paragraph 5 of this Article. The Commission shall adopt such decisions only if the scheme in question meets adequate standards of reliability, transparency and independent auditing in line with the requirements set out in Commission Implementing Regulation (EU) 2022/996 ( 42 ) for the certification of renewable fuels.
8. Where an economic operator provides evidence or data obtained in accordance with a scheme that has been the subject of a recognition pursuant to paragraph 7, a Member State shall not require the economic operator to provide further evidence of compliance with the criteria for which the scheme has been recognised by the Commission.
9. Competent authorities of the Member States shall supervise the operation of certification bodies that are conducting independent auditing under a voluntary scheme. Certification bodies shall submit, upon the request of competent authorities, all relevant information necessary to supervise the auditing, including the exact date, time and location of audits. Where Member States find issues of non-conformity, they shall inform the voluntary scheme without delay.
10. At the request of a Member State, which may be based on a request by an economic operator, the Commission shall, on the basis of all available evidence, examine whether the greenhouse gas emissions saving criteria laid down in this Article, the methodology developed in line with paragraph 5 of this Article, and the greenhouse gas emissions savings thresholds indicated in Article 2, points (11), (12) and (13), have been met. Within six months of receipt of such a request, the Commission shall decide whether the Member State concerned may:
(a)
accept the evidence already provided to show compliance with the greenhouse gas emissions saving criteria for low-carbon fuels; or
(b)
by way of derogation from paragraph 8, require suppliers of the source of low-carbon fuels to provide further evidence of their compliance with the greenhouse gas emissions saving criteria and the 70 % greenhouse gas emissions savings threshold.
11. Member States shall require the relevant economic operators to enter into the Union database established pursuant to Article 31a(1) of Directive (EU) 2018/2001, or into national databases that are linked to that Union database, in accordance with Article 31a(2) of that Directive, information on the transactions made and the sustainability characteristics of renewable gas and low-carbon fuels in line with the requirements for renewable fuels established in Article 31a of that Directive. Where guarantees of origin have been issued for the production of a consignment of low-carbon gas, they shall be subject to the same rules as those set out in in that Article for guarantees of origin issued for the production of renewable gas.
12. The Commission shall adopt by means of implementing acts decisions on recognition pursuant to paragraph 7 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 91(3). Such decisions shall have a limited period of validity, not exceeding five years.
Technical rules
1. Member States or, where Member States have so provided, the regulatory authorities shall ensure that technical safety criteria are established and that technical rules establishing the minimum technical design and operational requirements for the connection to the system of LNG facilities, natural gas storage facilities, other transmission or distribution systems, or direct lines, as well as to the hydrogen system, are developed and made public. Those technical rules shall ensure the interoperability of systems and shall be objective and non-discriminatory. ACER may make appropriate recommendations towards achieving compatibility of those rules, where appropriate. Those rules shall be notified to the Commission in accordance with Article 5 of Directive (EU) 2015/1535 of the European Parliament and of the Council ( 43 ) .
2. Where relevant, Member States or, where Member States have so provided, the regulatory authorities shall require transmission system operators, distribution system operators and hydrogen network operators in their territory to publish technical rules in accordance with this Article, in particular regarding network connection rules that include gas quality, gas odorisation and gas pressure requirements. Member States shall also require transmission and distribution system operators to publish the connection fees to connect gas from renewable sources based on objective, transparent and non-discriminatory criteria.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
