EU countries agree to prolong funding for selected gas projects, with caveats

Kadri Simson (L), EU energy commissioner, and João Pedro Matos Fernandes (R), Portuguese minister for the environment and climate action, arrive for the press conference at the conclusion of the Energy Council meeting in Luxembourg, 11 June 2021. [Copyright: European Union]

European Union energy ministers on Friday (11 June) agreed to prolong EU support for some cross-border natural gas projects, despite a push from 11 countries and the European Commission who said such funding should end to comply with climate change goals.

The EU’s “TEN-E” rules define which cross-border energy projects can be labelled Projects of Common Interest (PCI), giving them access to EU funds and fast-tracked permits.

The EU is upgrading the rules to comply with its climate change targets, and in December the European Commission proposed a new version excluding dedicated oil and gas infrastructure.

Energy ministers from EU countries on Friday agreed their position on the rules, which they must now negotiate with the European Parliament.

Exception for Malta and Cyprus

Ministers agreed that while new dedicated gas and oil projects should generally not receive support, projects in the island countries of Malta and Cyprus with PCI status should retain it until those countries 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.

Portugal’s environment minister, João Pedro Matos Fernandes, said the agreement is “right in line with the decarbonisation” of Europe because the only cases in which the TEN-E will contemplate projects of “non-renewable gases” will be in Malta and Cyprus.

“In everything else, the Union’s financial support for fossil fuels has ended and, therefore, we are in line with the decarbonisation objective, knowing that energy has a very significant influence in this decarbonisation,” he said at a press conference after the meeting.

According to an EU Council press release, the revision of the TEN-E regulation also updates the categories of infrastructure that are “eligible for support”, with a “special emphasis on decarbonisation”, adding a “new focus” on “offshore electricity grids, hydrogen infrastructure and smart grids”.

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.

Hydrogen blending with natural gas

Ministers also said that until 2028, support could go to converting gas pipelines to carry hydrogen, and those projects could continue to carry natural gas blended with hydrogen until 2030.

Those projects should demonstrate how they will shift to carry hydrogen only by the end of this period, the EU council, which represents member states, said in a statement.

“During a transitional period until 31st December 2029, dedicated hydrogen assets converted from natural gas can be used to transport or store a pre-defined blend of hydrogen with natural gas or biomethane,” the statement said.

“The purpose is to gradually decarbonise this sector and increase the share of renewable gases in the pipelines,” it added.

Germany, Spain, Austria and Luxembourg did not support the agreement.

Those countries, plus others including Denmark and the Netherlands, had called ahead of the meeting for rules to exclude fossil fuels, including gas. The TEN-E policy will be a “litmus test” of the EU’s commitment to eliminate its net emissions by 2050, they said.

Now that the Council have agreed their “general approach” to the TEN-E revision, negotiations can start with the European Parliament, which has an equal say on the matter.

“We count on the Parliament to improve the text,” said Claude Turmes, the energy and infrastructure minister of Luxembourg, in comments posted on Twitter.

Other states, including the Czech Republic and Slovakia, had wanted gas blending to be allowed until 2035.

[Additional reporting by Tiago Almeida,, and Frédéric Simon,]

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