Artelys contributes significantly to the European Commission’s Hydrogen and Decarbonised Gas Package

• Constrained market/grid access for producers of renewables/low-carbon gases.
• Missing grid connections as potential barriers for the exploitation of domestic renewable gas potentials.
• Intra-EU gas entry/exit tariffs as a barrier for a fully integrated EU gas market.
• Gas quality rules at the transport level are driven by quality considerations for fossil methane, disregarding hydrogen blending or other renewable/low-carbon gases.

• Although biomethane is quite abundant across the EU, the associated costs still exceed significantly current gas prices and require public support or an important carbon price level to become cost-competitive.
• A review of the intra-EU gas entry/exit tariffs for cross-border exchanges could increase market efficiency and slightly decrease marginal gas prices, but would require significant administrative efforts.
• Hydrogen blending into existing gas transport networks comes at significant investment costs when exceeding a blending rate of 5% as the entire gas supply chain would be affected. Even if blending may facilitate the establishment of a European hydrogen economy, it would contribute only marginally to the reduction of GHG emissions. Higher blending rates would imply CO2 abatement costs of more than 400 €/t (see graph above) and would require coordinated European legislation to prevent a fragmentation of the EU gas market.
• Providing negotiated third-party access to all LNG terminals facilitates an increase of the level of LNG imports, thereby potentially reducing the EU gas price.
• The joint planning of networks for gas, electricity, and hydrogen at European, regional, and country levels reveals synergies between energy carriers and prevents investments in stranded assets and technology lock-ins.

• The emergence of a pan-European hydrogen network by 2030 facilitates the exploitation of least-cost renewable electricity potentials, thereby driving down the costs of domestic EU hydrogen supply and helping national hydrogen prices to converge.
• A concerted planning of hydrogen generation and cross-border hydrogen (and electricity) transmission capacities across EU Member States will significantly lower the costs of introducing hydrogen into the EU energy mix. National electrolyzer build-out objectives should be set in coordination with the other Member States, as hydrogen imports may be less costly than electricity imports for local hydrogen production.
• A significant part of future hydrogen cross-border interconnection capacities may rely on the repurposing of existing gas pipelines while ensuring sufficient gas capacities remain to meet the 2030 methane demand.
• Allowing electrolyzers to run on electricity from the grid (in addition to dedicated RES capacity investments) may effectively reduce system costs, yet at the expense of increasing carbon emissions. Maintaining a carbon constraint enables emission reduction at an abatement cost of approximately 27 €/tCO2.