• Energy infrastructure policy to help achieve climate neutrality goals
  • Funds should support hydrogen, carbon capture and storage
  • Projects costs should not increase energy bills for consumers

The updated rules to select which energy projects will receive EU support were informally agreed between MEPs and the Slovenian Presidency of the Council, on Wednesday.

The draft legislation sets criteria and the methodology for selecting energy projects of common interest (PCIs), such as high-voltage transmission lines, pipelines, energy storage facilities or smart grids, which would benefit from fast-track administrative procedures and be eligible to receive EU funds. The aim is to align the existing regulation to the Green Deal objectives of the Union.

Boost hydrogen, phase out natural gas

During negotiations, MEPs supported including the funding of the development of hydrogen infrastructure, such as electrolysers, as well as carbon capture and storage. Eligible projects should also drive market integration and increase security of supply, the agreed text says.

The selected projects will have to help EU countries to move away from solid fossil fuels such as coal, lignite, peat and oil shale. MEPs secured funding for projects that repurpose existing natural gas infrastructure for hydrogen transport or storage during a transitional period. These projects would be eligible to receive EU financial assistance until 31 December 2027.

MEPs also secured a stronger involvement of stakeholders in the selection process and a wider representation of different sectors in the consultations. They also pushed for boosting offshore renewable energy projects and facilitate their integration into the EU networks with the aim of reaching the EU’s climate neutrality goals and the 300 GW objective.

Ending Cyprus and Malta’s energy isolation

Projects based on natural gas will no longer be eligible for EU funding. However, a temporary derogation will allow Cyprus and Malta to have one natural gas project each funded with a view of connecting them to the EU network, under strict conditions.

Consumers should not be penalised

MEPs reiterated that eligible projects have to be in line with the “energy efficiency first” principle, which stipulates that energy savings are the easiest way to save money for consumers and reduce greenhouse gas emissions. The cost of projects will have to ensure that consumers are not disproportionately burdened, especially if that could lead to energy poverty.

Finally, the legislation will not affect a country’s right to determine how to use its energy resources and define its own energy mix.

Next steps

The informal agreement will now have to be formally endorsed by Parliament and Council to come into force. The Industry, Research and Energy Committee will vote on the text on the 26th of January 2022.

Background

In its resolution of 10 July 2020, Parliament called for a revision of the trans-European networks in energy (TEN-E) regulation, which sets out EU guidelines for cross-border energy infrastructure and outlines the process for selecting projects of common interest (PCI). In December 2020, the Commission adopted a proposal to revise the TEN-E regulation.

PCIs are infrastructure projects considered essential for delivering on EU objectives in the energy field, including improved interconnection between national markets, greater competitiveness, security of supply and promotion of renewables.