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11 January 2022
Publication series – 73 of 85 Insights
Fit for 55 – Hydrogen and the Reform of the European Gas Market
- Briefing
The first part of the Fit for 55 package published last summer was followed by further legislative proposals from the European Commission at the end of December 2021. In particular, these were the proposals for the reform of the European gas market, which had already been previously leaked and which primarily aim at its decarbonisation. Hydrogen plays a central role in this process.
You can read about what “Fit for 55” actually involves, which projects are included in the overall package and which projects are of key importance for the energy industry in our Q&A Energy & Infrastructure: #8 Fit for 55.
Below, we answer the most important questions surrounding the Commission’s proposals for the reform of the European gas market, focusing on hydrogen.
Question: What are the key proposals of the draft legislative package on the EU gas market with respect to hydrogen?
Answer: For the first time, hydrogen is included in a legislative package to reform the European gas market, primarily within the framework of the amended Gas Internal Market Directive. Until now, no regulatory concept existed at the European level. The current legal framework for gaseous energy carriers has so far not been geared towards the use of hydrogen as an independent energy carrier and its transportation via dedicated hydrogen networks. At EU level, there are no rules for tariff-based investments in networks or concerning ownership and operation of hydrogen networks. There are also no harmonised rules for the quality of (pure) hydrogen. According to the European Commission, the present proposal is intended to remedy this situation and promote the development of a cost-efficient, cross-border hydrogen infrastructure and a competitive hydrogen market.
The importance of hydrogen in the present legislative package is particularly evident in the objectives associated with the proposals of the EU Commission. In addition to the orientation of the European gas market towards the goal of climate neutrality, the legislative package pursues four central goals:
- the creation of a legal framework for a hydrogen market,
- facilitated feed-in of renewable and low-CO2 gases into the existing gas grid,
- the phasing out natural gas by 2050 and
- the empowerment of gas consumers and prosumers.
Planned amendments concern the Gas Directive and Regulation from 2009. In addition, the EU Commission presented a proposal for a regulation on methane emission reduction in the energy sector. The main contents of the package concern specifications for the unbundling of gas and hydrogen networks, the definition and feed-in of low-CO2 and renewable gases, and the organisation of transmission and distribution networks. The package proposes rules on the operation and financing of hydrogen networks, on the transparency of gas quality parameters and hydrogen blending, on the reallocation of natural gas networks for the transport of hydrogen, and on unbundling and non-discriminatory access to the network.
Question: What is the significance of the proposed regulations for Germany’s legal requirements for hydrogen regulation?
Answer: The German regulation for pure hydrogen networks, which came into force in mid-2021 and was intended from the start as a transitional solution, will not last longer than 2030. This is because the Commission’s draft for an internal gas market directive provides for a transitional period until 2030, during which the national legislators do not yet have to fully implement the stricter regulatory requirements.
In Germany, following the amendment of the Energy Industry Act (EnWG) in June 2021, operators of pure hydrogen networks can submit to regulation in accordance with Section 28 j et seq. by submitting a declaration (“opt-in regulation”). The declaration is irrevocable, unlimited in time and applies to all networks of the operator. It is questionable whether this will actually create the economic conditions for a market ramp-up, especially with regard to the generation, transport and use of pure hydrogen. So far, no “opt-in” applications have been submitted to the BNetzA, but the first applications are expected in spring 2022. At that time, funding for hydrogen will also be possible within the framework of the Important Projects for Common European Interest (IPCAI); these projects will be subject to a simplified needs assessment by the BNetzA.
The German legal framework stipulates that the operator of a hydrogen network may neither own nor operate a hydrogen production, storage or distribution facility. In addition, the confidentiality of commercially sensitive information must be ensured, especially vis-à-vis affiliated companies. If information is disclosed, this must be done in a non-discriminatory manner (informational unbundling). Access to the pure, regulated hydrogen networks is to be granted by way of negotiated access in accordance with Section 28n EnWG, in deviation from the other regulatory model. Conditions and fees for network access are approved by the BNetzA. Incentive regulation does not apply.
In the EU Commission’s draft directive on the internal gas market, the operation of hydrogen networks is to be separated from the activities of energy production and supply in order to avoid the risk of conflicts of interest on the part of network operators. However, the Member States should be able to rely on the alternative unbundling model of the “integrated hydrogen network operator” until 2030 in order to grant the existing vertically integrated hydrogen networks a transition period. Member States should also have the possibility to allow the “independent hydrogen network operator” model so that vertically integrated hydrogen network owners remain owners of their networks and at the same time the non-discriminatory operation of these networks is guaranteed after 2030. In contrast to the first draft, transmission system operators should be allowed to operate hydrogen networks without ownership unbundling until 2030.
Question: What do the proposed regulations of the draft Internal Gas Market Directive mean for the independence of the German Federal Network Agency?
Answer: The stricter requirements formulated by the CJEU in September 2021 for electricity and gas will also have to be observed for hydrogen from 2031 at the latest according to the Commission’s draft for the Gas Internal Market Directive.
The CJEU ruling of 2 September 2021 has strengthened the independence of national regulatory authorities and formulated doubts about the sufficient independence of the BNetzA in Germany. The CJEU found that Germany had not implemented the requirements of EU Directives 2009/72/EC (Internal Electricity Market Directive) and the still applicable 2009/73/EC (Internal Gas Market Directive) in accordance with European law. In particular, the CJEU stated that the BNetzA, as a regulatory authority, must be independent and that the conditions for network access and charges must be set free from political influence. Section 24(1) EnWG, which authorises the federal government to issue corresponding ordinances, however, allows political influence on the BNetzA to an impermissible extent, according to the CJEU.
However, the German Federal Government is convinced that this ruling will have no impact on the hydrogen sector - at least not with regard to the Hydrogen Network Charges Ordinance (Wasserstoff-NEV), which came into force in September 2021. The judgement only covers the areas of electricity and natural gas (in particular on the basis of the still valid Directive on the Internal Market for Natural Gas), but does not cover the regulation of pure hydrogen networks. Whether such a strict separation of the different energy carriers was actually the basis of the judgement may be doubted - especially since the European legislator seems to include hydrogen under the term gas in addition to natural gas. On the other hand, the draft of an internal gas market directive that has now been presented deliberately provides for a transitional period. This is because according to this draft, the regulatory authorities will only have to be in a position to set or approve charges and calculation methods for access to hydrogen networks from 1 January 2031. This will have to be understood as an exclusive competence, which, against the background of the CJEU ruling that the draft directive takes up, excludes any political influence, including through framework requirements in the form of regulations, even if this requirement can be critically questioned, not least against the background of the democratic legitimisation of the legislator.
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Revision of energy efficiency requirements for data centres: an overview of the amendment to the Energy Efficiency Act
29 April 2026
Geothermal Energy in Germany: technology, current status and the legal framework for the heat transition
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24 April 2026
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EEG 2027 – Overview of the Planned Amendment to the Renewable Energy Sources Act
10 March 2026
by Dr. Markus Böhme, LL.M. (Nottingham), Dr. Christian Ertel
The NIS2 Directive: Challenges Renewable Energy Companies
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EU specifies certification of permanent CO₂ removals
11 February 2026
by Dr. Janina Pochhammer, Dr. Niels L. Lange, LL.M. (Stellenbosch)
Electricity Tax Amendment 2025/2026: New rules for BESS, charging infrastructure and renewable energies
14 January 2026
Battery storage systems in outdoor areas - current classification in accordance with § 35 BauGB
19 December 2025
HR compliance in the energy sector – customs authorities step up the fight against sham-employment
15 December 2025
The Current Challenges for Offshore Wind Energy in Germany
2 December 2025
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Offshore wind in Germany: from market premiums to Contracts for Difference?
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Energy Sharing under Section 42 of the German Energy Industry Act (EnWG)
26 November 2025
Bundestag Decides on the Privileging of Battery Storage Facilities in Outdoor Areas under § 35 (1) BauGB
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Industrial electricity price: Initial assessment and opportunities for companies
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FIDIC – An introduction to the FIDIC Suite 2017
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The Renewable Energy Expansion Acceleration Act – a boost for the energy transition in Austria?
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Federal Network Agency discussion paper on reforming grid fees for industry and commerce
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German-Dutch Treaty on Cross-Border Energy Projects
18 September 2025
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New amendment to the Energy Industry Act (EnWG) introduced in July and August 2025
8 September 2025
Clean Industrial Deal State Aid Framework (CISAF) – a new state aid framework for the green transformation of industry
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by Dr. Michael Brüggemann, Johannes Schaadt-Wambach, LL.M. (Prag)
Industrial electricity prices: initial assessment and opportunities for businesses
18 August 2025
by Johannes Schaadt-Wambach, LL.M. (Prag), Dr. Markus Böhme, LL.M. (Nottingham)
Regulatory Framework for Transmission System Operators in Germany
18 August 2025
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Court ruling on the effectiveness of availability guarantees for wind turbines
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New Legal Framework for the Commercial Use of Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU)
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Are offshore wind converter platforms a bottleneck in the energy transition? New German government wants to create production capacities at German shipyards
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Speeding up the energy transition - the new German government’s plans for gas and steam power plants and its quest for the right technology for renewable energy
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Update - Change of government opens the door to carbon capture and storage and carbon capture and utilisation
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The special fund for infrastructure and climate protection - what is next?
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Changes to CBAM through Omnibus legislative package
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The role of heat probes in the energy transition: Authorisation procedures and potential
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CJEU judgement on customer installations in accordance with Section 3 No. 24a Law on the Energy Industry EnWG
26 March 2025
by Dr. Markus Böhme, LL.M. (Nottingham), Dr. Christian Ertel
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Waste heat from data centres - new reporting obligations under the EnEfG
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Decision day: Grid fee exemption in customer systems and energy price brake put to the test
28 November 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Hydrogen core network - The Federal Network Agency’s strategy for the energy transition
11 November 2024
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Amendment to the Energy Industry Act: changes for energy supply companies and grid and system operators
18 September 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Standard Essential Patents: A new challenge for the IoT and smart meter world
10 September 2024
Land acquisition and data protection: The importance of the GDPR when project developers request owner data
18 July 2024
by Dr. Patrick Vincent Zurheide, LL.M. (Aberdeen), Dr. Julia Wulff
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Solar Package I - Overview of Changes to Ground-Mounted and Building-Mounted PV Systems
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Mandatory special charge for open space photovoltaic systems in Brandenburg
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Updating the National Hydrogen Strategy
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by Dr. Niels L. Lange, LL.M. (Stellenbosch), Dr. Janina Pochhammer
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by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Alexander Schmalenberger, LL.B.
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Challenges for data center operators - The federal government’s draft bill for an energy efficiency act
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Ordinance for Determining Critical Infrastructures (KritisV): Renewable energy plants as critical infrastructure and requirements for IT protection
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Renewable Energy Wrap-Up - United Kingdom
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Renewable Energy Wrap-Up – Netherlands
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Renewable Energy Wrap-Up – Poland
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Renewable Energy Wrap-Up – Austria
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Renewable Energy Wrap-Up - Germany
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Floating Foundations for Offshore Wind Farms
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