Overview of the legislation for gas and hydrogen

The Austrian gas transmission network can make a significant contribution to the climate-neutral energy future by transporting hydrogen and biomethane to and through Austria via the existing gas pipelines. Based on the current legislation for gas and renewable gases, we provide an overview of the legal landscape relevant to us and also want to point out where we think the stumbling blocks lie or where action is needed.

EU gas package

Hydrogen (H2) is a key technology for the future  security of supply of European industry and citizens. The "EU Gas Package" includes a revision of the Internal Gas Market Directive and Regulation and defines the future design of the hydrogen market. In Austria, the Gaswirtschaftsgesetz (GWG) will be amended as part of the implementation of the Internal Gas Market Directive. We have two main concerns in this context, as Gas Connect Austria GmbH (GCA) intends to own and operate a hydrogen pipeline network in the future:

  1. As a hydrogen transmission system operator (TSO), GCA should be able to remain legally within the VERBUND group structure as an Independent Transmission Operator (ITO).
  2. To own and operate a hydrogen pipeline network within the existing GCA company, i.e. only accounting distinction between hydrogen and natural gas operations.

Both concerns are included as options in the current draft of the internal gas market directive, which has to be granted by Austria and the national regulator E-Control. In general, we believe that over-regulation of the hydrogen market is not conducive to its development and we welcome the retention of proven regulations from the methane sector.

EU Metha Emission Reduction Regulation (MERR)

Methane is  believed to be one of the causes of climate change. For this reason, the EU member states have agreed to reduce methane emissions in the energy sector and from energy imports. According to the Austrian Association of Gas and Water Industries (ÖVGW), the energy sector is responsible for only 9% of total methane emissions; gas transport, gas production and gas storage account for less than 0.3% of Austria's greenhouse gas emissions. The gas sector is already a highly technological industry with very low methane emissions (compared to other sec-tors of the economy). This is possible thanks to strict ÖVGW guidelines and international benchmarking initiatives, in which GCA consistently ranks among the leaders. However, the detailed, closely staggered reporting obligations currently envisaged will be very intensive and time-consuming, and therefore also labour and cost intensive.

Gas Connect Austria has made many efforts and investments to reduce methane emissions in its pipeline network. Excessive reporting and monitoring requirements ultimately lead to higher prices not only for natural gas, but also for all other energy sources that are to be transported through the pipeline system (e.g. hydrogen). It should also be noted that the high costs of the planned reporting and monitoring obligations are not in any measurable positive proportion to the resulting benefits.

Renewable Energy Expansion Acceleration Act (EABG)

The EABG aims to further promote the generation of energy from renewable sources in order to secure the energy requirements  of households and businesses. Furthermore, the climate targets are to be achieved and dependence on fossil fuels reduced. There are two main areas of focus, on the one hand an independent procedure, which should help to speed up the process, and on the other hand to provide qualitative guidelines for further energy-related spatial planning.

Gas Connect Austria welcomes the acceleration of approval procedures in order to  drive forward the development of the energy infrastructure. Although there is no concrete draft of the law yet, hydrogen networks are already explicitly mentioned in a ministerial presentation. It is therefore important to us that the term "hydrogen networks" also includes methane networks, which are in principle "H2-ready" but are still used for methane transport for reasons of supply security. Our intention is to use the existing gas pipelines for large-scale hydrogen transport at a later stage.

Renewable Gases Act (EGG)

The expansion of renewable gas production (biogas, wood gas, hydrogen) is necessary to achieve climate targets and is generally welcomed by the entire energy industry. The current draft stipulates, that gas suppliers supplying end consumers  must replace a certain proportion (quota) of their gas supply with renewable gases. If this quota is not met, compensation payments must be made. This would lead to enormous costs for all gas consumers, as it can be assumed that the supply of renewable gas will be limited and this "penalty" will be passed on to customers. The planned compensation amount is too high and will ultimately be borne by gas consumers. This amount should be drastically reduced in order to avoid an unjustified burden on end consumers.

Austria has a high potential for biogas production from damaged wood, biomass and biowaste. This potential is currently untapped and should be more strongly supported and promoted politically, as it is climate-neutral and locally produced.