Brussels, 4 July 2024
“Check against delivery”
Good afternoon, everybody!
Let me first thank Eurogas for inviting me to address you today. I’m sorry I could not be there in person. But I wanted to thank you personally for your award recognising my contribution to decarbonising the gas sector.
I’m very proud of the progress over these past five years. We did a complete 180 when we shifted from natural gas to decarbonised gases.
And we did this together: Industry, stakeholders, Member States, European institutions – we all know how important decarbonised gases are. They provide flexibility to the energy system and will replace more carbon intensive fuels in maritime and aviation transport sectors.
As we approach the end of this Commission’s mandate, I want to take a moment to look back at how far we have come together.
As I said, the first thing that comes to mind is how much the ground has shifted on gas. At the start of this mandate, we knew that we had to completely rethink the role of the gas sector. From the get-go, it was clear that there was no real alternative: If we were to deliver on the Green Deal and our ambitious climate targets, we had to decarbonise the gas sector.
We had to transition to renewable gases. So this is what we began working towards. In 2020, we presented the European Hydrogen Strategy, with concrete roll-out objectives and actions.
A year later, we put forward a proposal for a new regulatory framework to boost the development of hydrogen and other decarbonised gases. The idea was to have rules to allow renewable gases to compete with natural gas – and this would give certainty to investors.
Then the invasion of Ukraine and the energy crisis happened. And it confirmed one thing very clearly: Renewable gas is a strategic investment – not only for our planet and our competitiveness, but also for our energy security. Our response to the crisis was the REPowerEU Plan to cut our dependence on Russian fossil fuels, diversify our suppliers and promote hydrogen and biomethane.
We raised our objectives for domestic hydrogen production and imports. We also set objectives for biomethane production in the EU to 35 billion cubic metres per year by 2030. And we put in place a biomethane action plan to make this happen.
Then we continued the work to complete our hydrogen legal framework:
- We defined requirements for the production of renewable hydrogen;
- We set binding targets in the Renewables Directive for hydrogen consumption in transport and industry sectors;
- We adopted the first list of hydrogen projects of Common European Interest;
- We set up a financial instrument, the European Hydrogen Bank, to support the first industrial scale hydrogen projects in the EU;
In June this year we launched a pilot mechanism to support the development of a hydrogen market by allowing European off-takers to match with both European and foreign suppliers. And the European Network of Network Operators for Hydrogen has just taken the first steps to be formally established.
So where are we now, compared to 5 years ago?
On biomethane, we’ve removed barriers and accelerated industrial developments and investments. We now have the Biomethane Industrial Partnership for policymakers, industry, and other stakeholders. This is an important forum which will ensure we don’t just deliver on our biomethane objective for 2030. It will also put in place the right conditions to further build on its potential with 2050 in mind.
It’s starting to pay off: EU combined biogas and biomethane production amounted to 18 bcm in 2022 – this is the equivalent of Poland’s gross inland gas consumption. And if we look specifically at biomethane, we see that its production in the EU has more than doubled between 2018 and 2022 to 3.4 bcm. On top of that, last year, we saw an important increase of investments in new biomethane projects.
On hydrogen, we now have an almost complete legal framework for Europe’s hydrogen economy in place and a clear direction of travel for industry and business. This year we will present rules for calculating greenhouse gas emissions savings on low-carbon hydrogen. And with that, the framework will be fully in place. We have certification schemes for renewable hydrogen. We have 65 hydrogen projects on the PCI list. This will give these projects preferential conditions including on permitting and the possibility to access EU funding. We have also closed the first EU-wide auction under the Hydrogen Bank. The response from hydrogen project promoters was encouraging – with 132 bids. We have now selected 7 renewable hydrogen projects that will receive EUR 720 million in funding to help them get off the ground.
The winning bidders plan to produce 1.58 million tonnes of renewable hydrogen over ten years – and in turn this will reduce CO2 emissions by 10 million tonnes. We are now preparing the second EU-wide action to be launched later this year with a budget of EUR 1.2 billion. Add to this the financing for hydrogen projects that comes from other EU and national funds:
- We have authorised over 17 billion in State Aid for roughly 80 hydrogen projects across the EU.
- We also have allocated 1,7 billion to support 106 projects under different EU funding programmes.
And innovative hydrogen projects are also eligible under the Innovation Fund’s latest call for proposals which has a record budget of EUR 4 billion. All in all, today, we have 254 renewable hydrogen projects in the EU, of which 170 are in operation and 84 under construction.
Finally, over the course of this mandate, we have put hydrogen at the heart of the EU’s energy diplomacy. This is key given hydrogen is poised to be an internationally traded commodity.
In a short space of time, we have concluded Memoranda of Understanding on hydrogen with a whole host of countries – Japan, Kazakhstan, Egypt, Namibia, Ukraine, and Uruguay, and soon also Saudi Arabia.
Ladies and Gentlemen,
When I attended your first annual renewable gas conference last year, I said that the building blocks for decarbonising the gas sector would soon be in place. Those building blocks are now in place.
We have done everything we had set out to do –– and by doing so, we have positioned Europe as a leader in the transition to renewable gases. This achievement is also thanks to Eurogas and its members. We would not be where we are today without industry support.
So thank you. Let’s continue building on this strong cooperation for an ever cleaner and more secure European gas market.
Thank you for your attention.
Source – EU Commission