Eleven EU countries hold firm in rejecting prolonged funding for gas projects

The draft text, seen by Climate Home News, waters down proposals made by the EU Commission last year – a move campaigners say would lock in fossil fuel infrastructure [Kodda / Shutterstock]

Eleven countries, including Germany, Denmark and the Netherlands, were set to reject a plan to prolong EU support for cross-border natural gas projects, and instead push for rules to exclude fossil fuels, according to a document seen by Reuters.

It came after Portugal, which currently holds the rotating presidency of EU countries, drafted a proposal that opened the door to fossil gas in the rules for funding cross-border projects.

Europe’s “TEN-E” rules define which cross-border energy projects can be labelled as Projects of Common Interest (PCI). This list is revised every two years and energy projects appearing on it can access certain EU funds and fast-tracked permits.

The EU is currently rewriting these to bring them in line with its climate targets. In December, the European Commission proposed a new version that excluded dedicated oil and gas infrastructure.

But the Portuguese draft, which was due to form the basis for discussions taking place on Wednesday (2 June), watered down the European Commission’s proposal. Instead, it introduced loopholes for gas pipelines, allowing these to receive funding until the end of the decade.

EU shifts energy infrastructure funding away from gas, into electricity grids

The European Commission on Tuesday (15 December) proposed rules to restrict EU funding for natural gas infrastructure and instead funnel cash into electricity and low-carbon energy networks to meet climate goals.

‘TEN-E should not support fossil gas’

The eleven countries opposed to this – Austria, Belgium, Denmark, Germany, Estonia, Ireland, Luxembourg, Latvia, the Netherlands, Spain and Sweden – reiterated their position from a month ago when they signed a declaration to keep fossil fuels out of the revision of the TEN-E regulation.

Denmark tweeted this again on Wednesday, saying, “Infrastructure investments must provide a viable pathway away from reliance on fossil fuels. 11 member states including Denmark call for [a] stop to EU funding of fossil fuel projects in preparation for discussions on TEN-E in Brussels today.”

“TEN-E must not facilitate investments in fossil fuel infrastructure nor blending of hydrogen with fossil fuels,” said the declaration. “TEN-E must contribute to developing the framework for a viable pathway away from reliance on fossil fuels.”

The rules will be a “litmus test” of the EU’s pledge to eliminate its net emissions by 2050, it said.

The declaration is an important statement ahead of the discussions between EU countries, according to Claude Turmes, the energy minister of Luxembourg, who write on Twitter ahead of the discussions on Wednesday (2 June).

“For Luxembourg, Denmark, Germany and eight other Member States, the new TEN-E regulation should not support fossil gas nor the blending of hydrogen,” he added.

France staying silent

This divide between EU countries on TEN-E echoes a wider dispute on the role of gas. Many, including the European Commission and central and eastern European countries, have said gas will be needed as a transition fuel out of more-polluting coal.

Climate Home News reported that nine countries, mainly in Eastern Europe, signed a joint statement arguing that gas projects already entered into the permit granting process should remain eligible for funding until 2030 “since all these projects contribute to the energy transition towards climate neutrality”.

France did not sign either statement, marking a continuation of its silence around the topic of natural gas, most likely due to its efforts to support nuclear power.

Gas until 2030

Portugal’s proposal stated that projects in the island countries of Malta and Cyprus with PCI status should retain it until they are fully connected to the European gas network. That could help ensure the completion of Greece, Cyprus and Israel’s Eastmed pipeline to supply Europe with gas from the eastern Mediterranean.

The proposal also said that, until 2030, investments to retrofit gas pipelines for carrying hydrogen should be allowed to carry natural gas blended with hydrogen.

But Luxembourg’s Claude Turmes has previously argued against this, saying, “This idea to mix very expensive champagne with cheap lemonade in a gas pipeline, that doesn’t make any sense because where we need the most green hydrogen is in industry and it is the chemical property of hydrogen which we need.”

Industry coalition calls for hydrogen blending into gas

More than 90 energy companies, equipment manufacturers and gas network operators have called on the European Commission to consider hydrogen blending into natural gas for parts of Europe that cannot yet afford a dedicated hydrogen network.

Campaign group Global Witness said the rules should not support fossil fuels. They pointed to the International Energy Agency report last month that said investments in new fossil fuel supply projects must cease if the world wants to reach net zero emissions by 2050.

Portugal is trying to satisfy the “lowest common denominators” to get a deal at any cost, Tara Connolly, a gas campaigner at Global Witness told Climate Home News.

“Make no mistake this is absolutely a failure on behalf of the Portuguese presidency to reach a progressive deal with member states that is fit for the climate emergency the world is facing,” she added.

Portugal declined to comment. EU ambassadors discussed the proposal on Wednesday (2 June). EU countries and the European Parliament must negotiate and approve the TEN-E rules.

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