Regulation (EU) 2024/1789 of the European Parliament and of the Council of 13 June 2024 on the internal markets for renewable gas, natural gas and hydrogen, amending Regulations (EU) No 1227/2011, (EU) 2017/1938, (EU) 2019/942 and (EU) 2022/869 and Decision (EU) 2017/684 and repealing Regulation (EC) No 715/2009 (recast) (Text with EEA relevance)
Regulation (EU) 2024/1789 of the European Parliament and of the Councilof 13 June 2024on the internal markets for renewable gas, natural gas and hydrogen, amending Regulations (EU) No 1227/2011, (EU) 2017/1938, (EU) 2019/942 and (EU) 2022/869 and Decision (EU) 2017/684 and repealing Regulation (EC) No 715/2009 (recast)(Text with EEA relevance)THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty on the Functioning of the European Union, and in particular Article 194(2) thereof,Having regard to the proposal from the European Commission,After transmission of the draft legislative act to the national parliaments,Having regard to the opinion of the European Economic and Social CommitteeOJ C 323, 26.8.2022, p. 101.,Having regard to the opinion of the Committee of the RegionsOJ C 498, 30.12.2022, p. 83.,Acting in accordance with the ordinary legislative procedurePosition of the European Parliament of 11 April 2024 (not yet published in the Official Journal) and decision of the Council of 21 May 2024.,Whereas:(1)Regulation (EC) No 715/2009 of the European Parliament and of the CouncilRegulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (OJ L 211, 14.8.2009, p. 36). has been substantially amended several times. Since further amendments are to be made, that Regulation should be recast in the interests of clarity.(2)The internal market for natural gas, which has been progressively implemented since 1999, aims to deliver real choice for all consumers in the Union, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices and higher standards of service, and to contribute to security of supply and sustainability.(3)By means of Regulation (EU) 2021/1119 of the European Parliament and of the CouncilRegulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 ("European Climate Law") (OJ L 243, 9.7.2021, p. 1)., the Union has committed to cutting greenhouse gas emissions. The internal market rules for gaseous fuels need to be aligned with that Regulation. In that context, the Union has set out how to update its energy markets, including as regards the decarbonisation of markets for gas, in the communications of the Commission of 8 July 2020 entitled "Powering a climate-neutral economy: An EU Strategy for Energy System Integration" and "A hydrogen strategy for a climate-neutral Europe" (the "EU Hydrogen Strategy"), as well as in the European Parliament resolution of 10 July 2020 on a comprehensive European approach to energy storageEuropean Parliament resolution of 10 July 2020 on a comprehensive European approach to energy storage (2019/2189(INI)) (OJ C 371, 15.9.2021, p. 58).. This Regulation should contribute to achieving the Union’s objective to cut greenhouse gas emissions at the same time as ensuring security of supply and the proper functioning of the internal markets for natural gas and hydrogen.(4)This Regulation complements related Union policy and legislative instruments, in particular those proposed pursuant to the communication of the Commission of 11 December 2019 entitled the "European Green Deal", such as Regulations (EU) 2023/857Regulation (EU) 2023/857 of the European Parliament and of the Council of 19 April 2023 amending Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement, and Regulation (EU) 2018/1999 (OJ L 111, 26.4.2023, p. 1)., (EU) 2023/957Regulation (EU) 2023/957 of the European Parliament and of the Council of 10 May 2023 amending Regulation (EU) 2015/757 in order to provide for the inclusion of maritime transport activities in the EU Emissions Trading System and for the monitoring, reporting and verification of emissions of additional greenhouse gases and emissions from additional ship types (OJ L 130, 16.5.2023, p. 105)., (EU) 2023/1805Regulation (EU) 2023/1805 of the European Parliament and of the Council of 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC (OJ L 234, 22.9.2023, p. 48). and (EU) 2023/2405Regulation (EU) 2023/2405 of the European Parliament and of the Council of 18 October 2023 on ensuring a level playing field for sustainable air transport (ReFuelEU Aviation) (OJ L, 2023/2405, 31.10.2023, ELI: http://data.europa.eu/eli/reg/2023/2405/oj). of the European Parliament and of the Council and Directives (EU) 2023/959Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union and Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading system (OJ L 130, 16.5.2023, p. 134)., (EU) 2023/1791Directive (EU) 2023/1791 of the European Parliament and of the Council of 13 September 2023 on energy efficiency and amending Regulation (EU) 2023/955 (OJ L 231, 20.9.2023, p. 1). and (EU) 2023/2413Directive (EU) 2023/2413 of the European Parliament and of the Council of 18 October 2023 amending Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/EC as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652 (OJ L, 2023/2413, 31.10.2023, ELI: http://data.europa.eu/eli/dir/2023/2413/oj). of the European Parliament and of the Council, which aim to incentivise the decarbonisation of the Union’s economy and ensure that it remains on a trajectory towards a climate-neutral Union by 2050, in accordance with Regulation (EU) 2021/1119. The main objective of this Regulation is to enable and facilitate such transition towards climate neutrality by ensuring the ramp-up of a market for hydrogen and an efficient market for natural gas.(5)This Regulation aims to facilitate the penetration of renewable gas and low-carbon gas and hydrogen into the energy system, enabling a shift away from fossil gas, and to allow renewable gas and low-carbon gas and hydrogen to play an important role in achieving the Union’s 2030 climate objectives and climate-neutrality by 2050. This Regulation also aims to set up a regulatory framework which enables and incentivises all market participants to shift away from fossil gas and plan their activities to avoid lock-in effects and aims to ensure a gradual and timely phase-out of fossil gas, in particular, in all relevant industrial sectors and for heating purposes.(6)The EU Hydrogen Strategy recognises that, as Member States have different potential for the production of renewable hydrogen, an open and competitive internal market with unhindered cross-border trade has significant benefits for competition, affordability and security of supply. Moreover, the EU Hydrogen Strategy stresses that moving towards a liquid market with commodity-based hydrogen trading would facilitate entry of new producers and be beneficial for deeper integration with other energy carriers and would create viable price signals for investment decisions and operational decisions. The rules laid down in this Regulation should thus facilitate the emergence of markets for hydrogen, commodity-based hydrogen trading and liquid trading hubs. Any undue barriers, including disproportionate tariffs at interconnection points, should be eliminated by Member States. While recognising the inherent differences, existing rules that enabled efficient commercial operations and trading developed for the markets for electricity and natural gas should also be considered for a market for hydrogen. While this Regulation lays down general principles applicable to the operation of the market for hydrogen, it is appropriate to take account of the stage of development of that market when applying those principles.(7)Supporting the coal and carbon-intensive regions in the phase-out of fossil fuels and phase-in of renewable energy is a key element of the just transition policy. That support has to be pursued consistently with the relevant legal framework, in particular the Just Transition Fund, established by Regulation (EU) 2021/1056 of the European Parliament and of the CouncilRegulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund (OJ L 231, 30.6.2021, p. 1)., which allows funding of technologies for renewable energy. The Commission plays a key role in ensuring such support to national policies aimed at progressively reducing existing coal and other solid fossil fuel generation and mining capacity. That process requires funding to address the social and economic impact, including the reskilling of the workforce for the purpose of the clean energy transition of regions that undergo structural change. The support to coal and carbon-intensive regions will need to take into account the specific goals, scopes and criteria of each relevant Union funding programme. The Just Transition Fund does not provide for funding of technologies other than renewable energy.(8)Directive (EU) 2024/1788 of the European Parliament and of the CouncilDirective (EU) 2024/1788 of the European Parliament and of the Council of 13 June 2024 on common rules for the internal markets for renewable gas, natural gas and hydrogen, amending Directive (EU) 2023/1791 and repealing Directive 2009/73/EC (OJ L, 2024/1788, 15.7.2024, ELI: http://data.europa.eu/eli/dir/2024/1788/oj). provides for the possibility of a combined system operator. The rules laid down in this Regulation do not therefore require modification of the organisation of national systems that are consistent with the relevant provisions of that Directive.(9)It is necessary to specify the criteria according to which tariffs for access to the network are determined, in order to ensure that they fully comply with the principle of non-discrimination and the needs of a properly functioning internal market, take fully into account the need for system integrity and reflect the actual costs incurred, insofar as such costs correspond to those of an efficient and structurally comparable network operator and are transparent, whilst including the appropriate return on investments, and enabling the integration of renewable gas and low-carbon gas. The rules on network access tariffs laid down in this Regulation are complemented by further rules on network access tariffs, in particular in the network codes and guidelines adopted pursuant to this Regulation, in Regulations (EU) 2022/869Regulation (EU) 2022/869 of the European Parliament and of the Council of 30 May 2022 on guidelines for trans-European energy infrastructure, amending Regulations (EC) No 715/2009, (EU) 2019/942 and (EU) 2019/943 and Directives 2009/73/EC and (EU) 2019/944, and repealing Regulation (EU) No 347/2013 (OJ L 152, 3.6.2022, p. 45). and (EU) 2024/1787Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942 (OJ L, 2024/1787, 15.7.2024, ELI: http://data.europa.eu/eli/reg/2024/1787/oj). of the European Parliament and of the Council and in Directive (EU) 2018/2001 of the European Parliament and of the CouncilDirective (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82). and Directive (EU) 2023/1791.(10)It is, in general, most efficient to finance infrastructure by means of revenue obtained from the users of that infrastructure and to avoid cross-subsidies. Moreover, cross-subsidies would, in the case of regulated assets, be incompatible with the general principle of cost-reflective tariffs. In exceptional cases, cross-subsidies could nonetheless bring societal benefits, in particular during earlier phases of network development where booked capacity is low compared to technical capacity and uncertainty as to when future capacity demand will materialise is significant. Cross-subsidies could therefore contribute to reasonable and predictable tariffs for early network users and de-risk investments made by network operators, thus contributing to an investment climate that supports the decarbonisation objectives of the Union. As an alternative to the expected higher network tariffs that would otherwise have to be charged to early hydrogen network users, it should be possible for hydrogen network operators to spread network development costs over time by allowing Member States to provide for the possibility that future users pay part of the initial costs, by way of an inter-temporal cost allocation. Such inter-temporal cost allocation and its underlying methodology and features should be approved by the regulatory authority. It should be possible for Member States to accompany such mechanism by measures to cover the financial risk of hydrogen network operators, such as a State guarantee, provided that they comply with Article 107 of the Treaty on the Functioning of the European Union (TFEU). Where the financing of networks through network access tariffs paid by network users is not viable, the regulatory authority should be able to allow financial transfers between separate regulated services from natural gas and hydrogen networks, subject to certain conditions. Costs associated with feasibility studies related to the repurposing of natural gas networks to hydrogen networks should not be considered to be cross-subsidies. Cross-subsidies should not be financed by network users in other Member States and it is thus appropriate to collect financing for cross-subsidies only from exit points to final customers within the same Member State. Moreover, as cross-subsidies are exceptional, it should be ensured that they are proportional, transparent, limited in time and established under regulatory supervision, subject to notification to the Commission and to the European Union Agency for the Cooperation of Energy Regulators (ACER) established by Regulation (EU) 2019/942 of the European Parliament and of the CouncilRegulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (OJ L 158, 14.6.2019, p. 22)..(11)The use of market-based arrangements, such as auctions, to determine tariffs is to comply with Directive (EU) 2024/1788 and Commission Regulation (EU) 2017/459Commission Regulation (EU) 2017/459 of 16 March 2017 establishing a network code on capacity allocation mechanisms in gas transmission systems and repealing Regulation (EU) No 984/2013 (OJ L 72, 17.3.2017, p. 1)..(12)A common minimum set of third-party access services is necessary to provide a common minimum standard of access in practice throughout the Union, to ensure that third-party access services are sufficiently compatible and to allow the benefits accruing from a properly functioning internal market for natural gas to be exploited.(13)Arrangements on third-party access should be based on the principles laid down in this Regulation. The organisation of entry-exit systems, which enable a free allocation of natural gas on the basis of firm capacity, was welcomed by the XXIV European Gas Regulatory Forum (Madrid Forum) in October 2013. Therefore a definition of entry-exit system should be introduced, which would help to achieve a level playing field for renewable gas and low-carbon gas connected to either the transmission or distribution level. Tariff setting for distribution system operators and hydrogen distribution network operators and the organisation of capacity allocation between the transmission and distribution levels for natural gas and hydrogen should be left to the regulatory authorities on the basis of the principles laid down in Directive (EU) 2024/1788.(14)Access to the entry-exit system should be generally based on firm capacity. Network operators should be required to cooperate in a way that maximises the offer of firm capacity, which in turn enables network users to freely allocate the natural gas entering or exiting on the basis of firm capacity to any entry or exit point in the same entry-exit system.(15)Member States should be able to establish full or partial regional integration where two or more adjacent entry-exit systems are merged. It should be possible for partial regional integration to encompass various balancing zones as an important step towards integrating fragmented markets for natural gas and improving the functioning of the internal market for natural gas.(16)Where regional market integration is undertaken, the transmission system operators concerned and regulatory authorities should address issues having a cross-border impact such as tariff structures, the balancing regime, capacities at remaining cross-border points, investment plans and the fulfilment of tasks of transmissions system operators and of regulatory authorities.(17)Conditional capacity should be offered only where network operators are not able to offer firm capacity. Network operators should define the conditions for conditional capacity on the basis of operational constraints in a transparent and clear manner. The regulatory authority should approve the conditions and ensure that the number of conditional capacity products is limited to avoid a fragmentation of the market for natural gas and to ensure compliance with the principle of providing efficient third-party access.(18)A sufficient level of cross-border natural gas interconnection capacity should be achieved and market integration fostered in order to complete the internal market for natural gas.(19)This Regulation aims to support the production of sustainable biomethane in the Union. In its staff working document of 18 May 2022 "Implementing the Repower EU Action Plan: Investment needs, hydrogen accelerator and achieving the bio-methane targets", accompanying the communication of the Commission of 18 May 2022 entitled "REPower EU Plan" (the "REPowerEU Plan"), the Commission proposed to increase significantly the production of sustainable biomethane in the Union up to 35 bcm per year by 2030.(20)The coordinated mapping for the deployment of biogas and biomethane serves as a tool for Member States to determine the contribution of biomethane to their estimated trajectories from 2021 to 2030, including the expected total gross final energy consumption and the total planned installed capacity, as provided for in their integrated national energy and climate plans. Where Member States have established national trajectories for biogas and biomethane, they should specify in their national energy and climate plans policies and measures for their development, such as adopting national strategies on sustainable biogas and biomethane or setting national targets of annual production or consumption of biomethane, either expressed in absolute volumes or as a percentage of the volume of natural gas consumed by customers connected to the natural gas network. In order to facilitate that, the Commission has provided Member States with significant biomethane potential an analysis of their national potential, as well as suggestions how the potential could be best harnessed. Furthermore, pursuant to Article 25(2), point (b), of Directive (EU) 2018/2001, Member States may take into account for the transport sector targets referred to in Article 25(1) of that Directive biogas that is injected into the national gas transmission and distribution infrastructure.(21)Increased cooperation and coordination among transmission system operators and, where relevant, distribution system operators is required to create network codes for providing and managing effective and transparent access to the transmission networks across borders, and to ensure coordinated and sufficiently forward looking planning and sound technical evolution of the natural gas system in the Union, including the creation of interconnection capacities, with due regard to the environment. The network codes should be in line with framework guidelines, which are non-binding in nature and which are developed by ACER. ACER should have a role in reviewing, on the basis of facts, draft network codes, including their compliance with the framework guidelines, and it should be enabled to recommend them for adoption by the Commission. ACER should assess proposed amendments to the network codes and it should be enabled to recommend them for adoption by the Commission. Transmission system operators should operate their networks in accordance with those network codes.(22)In order to ensure optimal management of the natural gas transmission network in the Union, a European Network of Transmission System Operators for Gas (the "ENTSO for Gas"), should be provided for. With the aim of ensuring a fair representation of small-size, non-interconnected or isolated Member States, in addition to natural gas transmission system operators, those natural gas system operators which benefit from a derogation from Article 60 of Directive (EU) 2024/1788 pursuant to Article 86 of that Directive, should be eligible to be members of the ENTSO for Gas. The Commission, when approving the statutes of the ENTSO for Gas, may seek to ensure an appropriate differentiation of membership rights reflecting the different status of the members. The tasks of the ENTSO for Gas should be carried out in accordance with Union competition rules which are applicable to the decisions of the ENTSO for Gas. The tasks of the ENTSO for Gas should be well defined and its working methods should ensure efficiency, transparency and the representative nature of the ENTSO for Gas. Where appropriate, network codes can be developed jointly by the ENTSO for Gas and the European Network of Network Operators for Hydrogen (ENNOH) with regard to cross-sectoral issues. The network codes prepared by the ENTSO for Gas are not intended to replace the necessary national technical rules applicable to non-cross-border issues. Given that more effective progress may be achieved through an approach at regional level, transmission system operators should set up regional structures within the overall cooperation structure, whilst ensuring that results at regional level are compatible with network codes and non-binding ten-year network development plans at Union level. Cooperation within such regional structures presupposes effective unbundling of network activities from production and supply activities. In the absence of such unbundling, regional cooperation between transmission system operators gives rise to a risk of anti-competitive conduct. Member States should promote cooperation and monitor the effectiveness of network operations at regional level. Cooperation at regional level should be compatible with progress towards a competitive and efficient internal markets for natural gas and hydrogen.(23)In order to ensure greater transparency regarding the development of the natural gas transmission network in the Union, the ENTSO for Gas should draw up, publish and regularly update a non-binding Union-wide ten-year network development plan for natural gas (the "Union-wide network development plan for natural gas") on the basis of a joint scenario and the interlinked model. The Union-wide network development plan for natural gas should be developed following a transparent process involving meaningful public consultation, including involvement of independent scientific bodies, and it should be based on objective and scientific criteria. To that end, the European Scientific Advisory Board on Climate Change may provide input on the scenarios for the Union-wide network development plan for natural gas pursuant to Regulation (EU) 2022/869. Viable natural gas transmission networks and necessary regional interconnections, relevant from a commercial or security of supply point of view, should be included in that Union-wide network development plan for natural gas. The Union-wide network development plan for natural gas should promote the energy efficiency first principle and energy system integration and contribute to the prudent and rational use of natural resources and the achievement of the Union’s climate and energy targets.(24)To enhance competition through a liquid wholesale market for natural gas, it is vital that natural gas can be traded independently of its location in the system. The only way to do this is to give network users the freedom to book entry and exit capacity independently, thereby creating natural gas transport through zones instead of along contractual paths. To ensure the freedom of booking capacity independently at entry and exit points, tariffs set for one entry point should therefore not be related to the tariff set for one exit point but should instead be offered for those points separately and the tariff should not bundle the entry and exit charge in a single price.(25)While Commission Regulation (EU) No 312/2014Commission Regulation (EU) No 312/2014 of 26 March 2014 establishing a Network Code on Gas Balancing of Transmission Networks (OJ L 91, 27.3.2014, p. 15). provides rules for setting up technical rules that build up a balancing regime, it leaves various design choices for each balancing regime that is applied in a specific entry-exit system. The combination of choices made lead to a specific balancing regime that is applicable in a specific entry-exit system, which are currently mostly reflecting Member States territories.(26)Network users should bear the responsibility of balancing their inputs against their off-takes with trading platforms established to better facilitate natural gas trade between network users. In order to ensure equal access to the market for renewable gas and low-carbon gas, the balancing zone should also cover, to the extent possible, the distribution system level. The virtual trading point should be used to exchange natural gas between balancing accounts of network users.(27)References to harmonised transport contracts in the context of non-discriminatory access to the network of transmission system operators do not mean that the terms and conditions of the transport contracts of a particular system operator in a Member State must be the same as those of another transmission system operator in that Member State or in another Member State, unless minimum requirements are set which must be met by all transport contracts.(28)Equal access to information on the physical status and efficiency of the system is necessary to enable all market participants to assess the overall demand and supply situation and to identify the reasons for movements in the wholesale price. That includes more precise information on supply and demand, network capacity, flows and maintenance, balancing and availability and usage of storage. The importance of that information for the functioning of the market requires alleviating existing limitations to publication for confidentiality reasons.(29)Confidentiality requirements for commercially sensitive information are, however, particularly relevant where data of a commercially strategic nature for the undertaking are concerned, where there is only a single user for a natural gas storage facility, or where data are concerned regarding exit points within a system or subsystem that is not connected to another transmission or distribution system but to a single industrial final customer, where the publication of such data would reveal confidential information as to the production process of that customer.(30)To enhance trust in the market, market participants need to be sure that those engaging in abusive behaviour can be subjected to effective, proportionate and dissuasive penalties. The competent authorities should be given the competence to investigate effectively allegations of market abuse. To that end, it is necessary that competent authorities have access to data that provides information on operational decisions made by supply undertakings. In the natural gas market, all those decisions are communicated to the system operators in the form of capacity reservations, nominations and realised flows. System operators should keep information in relation thereto available to and easily accessible by the competent authorities for a fixed period of time. The competent authorities should, furthermore, regularly monitor the compliance of the system operators with the rules.(31)Access to natural gas storage facilities and liquefied natural gas (LNG) facilities is insufficient in some Member States, and therefore the implementation of the existing rules needs to be improved as regards transparency and the objectives of REPowerEU Plan. Such improvement should take into account the potential and uptake of renewable gas and low-carbon gas for those facilities on the internal market.(32)Non-discriminatory and transparent balancing systems for natural gas, operated by transmission system operators, are important mechanisms, in particular for new entrants on the market which may have more difficulty balancing their overall sales portfolio than undertakings already established within a relevant market. It is therefore necessary to lay down rules to ensure that transmission system operators operate such mechanisms in a manner compatible with non-discriminatory, transparent and effective access conditions to the network.(33)Regulatory authorities should ensure compliance with this Regulation and the network codes and guidelines adopted pursuant thereto.(34)In the guidelines laid down in an annex, more detailed rules are established. Where appropriate, those rules should evolve over time, taking into account the differences of national natural gas systems and their development.(35)When proposing to amend the guidelines laid down in the annex, the Commission should ensure prior consultation of all relevant parties concerned by those guidelines, represented by the professional organisations, and of the Member States within the Madrid Forum.(36)The Member States and the competent national authorities should be required to provide, upon request, relevant information to the Commission. The request for the information should include the reasons why the information is necessary for the purposes of implementing this Regulation. Such information should be treated confidentially by the Commission.(37)This Regulation and the network codes and guidelines adopted pursuant thereto are without prejudice to the application of the Union competition rules.(38)Member States and the Energy Community Contracting Parties should closely cooperate on all matters concerning the development of an integrated natural gas trading region and should take no measures that endanger the further integration of natural gas markets or the security of supply of the Member States and the Contracting Parties.(39)The energy transition and the continuing integration of the market for natural gas requires further transparency with regard to the allowed or target revenue of the transmission system operator. A number of decisions related to natural gas networks are to be based on that information. For example, the transfer of transmission assets from a natural gas network operator to a hydrogen network operator or the implementation of an inter-transmission-system-operator compensation mechanism (ITC) require more transparency than currently exists. In addition, the assessments of tariff evolutions on the long term requires clarity on both natural gas demand and cost projections. Transparency with regard to allowed revenue is likely to facilitate cost projections. Regulatory authorities should, in particular, regularly provide information on the methodology used to calculate the revenue of transmission system operators, the value of their regulatory asset base and its depreciation over time, the value of operational expenditure, the cost of capital applied to transmission system operators and the incentives and premia applied, as well as the long-term evolution of transmission tariffs on the basis of the expected changes to the allowed or target revenue of transmission system operators and in natural gas demand. In order to ensure the proper coordination of the process of collecting and interpreting the data for the transparent and reproducible transmission system operator efficiency comparison study, ACER should liaise with the transmission system operators and ENTSO for Gas.(40)The expenditure of transmission system operators is predominantly fixed costs. Their business model and the current national regulatory frameworks rely on the assumption of a long-term utilisation of their networks entailing long depreciation periods: from 30 to 60 years. In the context of the energy transition, regulatory authorities should therefore be able to anticipate natural gas demand decrease to modify the regulatory arrangements in due time and prevent a situation where the cost recovery of transmission system operators through tariffs threatens the affordability of natural gas for consumers due to an increasing ratio of fixed costs to natural gas demand. Where necessary, the depreciation profile or remuneration of transmission assets could, for example, be modified.(41)The transparency of allowed or target revenue of transmission system operators should be increased to enable benchmarking and an assessment by network users. Transparency should also be increased to facilitate cross-border cooperation and the setting up of ITCs between transmission system operators either for regional integration or for the implementation of tariff discounts for renewable gas and low-carbon gas as laid down in this Regulation.(42)In order to exploit the most economic locations for the production of renewable gas and low-carbon gas, network users should benefit from discounts in capacity-based tariffs. Such discounts could include a discount for the injection from renewable gas and low-carbon gas production facilities, a discount for tariffs at entry points from and exit points to natural gas storage facilities, and a discount on the cross-border tariffs at interconnection points between Member States. Regulatory authorities should be able to decide not to apply the discounts to those tariffs under certain circumstances. In the case of a change of the value of non-cross border discounts, the regulatory authority should balance out the interest between network users and network operators taking into account stable financial frameworks specifically designed for existing investments, in particular for renewable production facilities. Where possible, indicators or conditions for changing the discount should be provided sufficiently before any decision to change the discount is taken. That discount should not affect the general tariff setting methodology, but should be provided ex post on the relevant tariff. In order to benefit from the discount, network users should submit to the transmission system operator the required information on the basis of a sustainability certificate registered in the Union database referred to in Article 31a of Directive (EU) 2018/2001.(43)Revenue decreases from the application of discounts should be treated as general revenue decreases, for example from reduced capacity sales, and would need to be recovered via tariffs in a timely manner, for instance by an increase of the specific tariffs in accordance with the general rules laid down in this Regulation.(44)In order to increase efficiency in the natural gas distribution networks in the Union and to ensure close cooperation with transmission system operators and the ENTSO for Gas, as well as to increase efficiency in the hydrogen distribution networks in the Union and to ensure close cooperation with hydrogen transmission network operators and the ENNOH, a European entity for distribution system operators (the "EU DSO entity") should be provided for. The EU DSO entity should also include natural gas distribution system operators and should be able to include hydrogen distribution network operators. The tasks of the EU DSO entity should be well defined and its working methods should ensure efficiency, transparency and representativeness among Union distribution system and hydrogen distribution network operators. The EU DSO entity should be free to establish its statutes and rules of procedure taking into account the differences between the natural gas, hydrogen and electricity sectors. The EU DSO entity should cooperate closely with the ENTSO for Gas and with the ENNOH on the preparation and implementation of the network codes, where applicable, and should work on providing guidance on the integration, inter alia, of distributed generation and other areas, which relate to the management of distribution networks.(45)Distribution system operators have an important role to play when it comes to the integration of renewable gas and low-carbon gas into the system, as for example about half of the biomethane production capacity is connected to the distribution grid. In order to facilitate the participation of such gas on the wholesale market, production facilities connected to the distribution grid in all Member States should have access to the virtual trading point. Furthermore, pursuant to this Regulation distribution system operators and transmission system operators should work together to enable reverse flows from the distribution to the transmission network or to ensure the integration of the distribution system through alternative means, equivalent in effect, to facilitate the market integration of renewable gas and low-carbon gas.(46)The mechanism for demand aggregation and the joint purchasing of natural gas, and the mechanism to support the market development of hydrogen can play a pivotal role in achieving the objectives of the Union’s energy policy: market transparency, decarbonisation, diversification and security of supply.(47)The mechanism for demand aggregation and the joint purchasing of natural gas, and the mechanism to support the market development of hydrogen contribute to the unity of the Union’s energy market by improving transparency, as well as ensuring visibility of demand for energy sources across Member States for suppliers concerned.(48)Demand aggregation for natural gas may enhance international outreach to natural gas suppliers, whether pipeline or LNG, that is essential to help achieve the objectives of the Union’s energy policy and the unity of the Union’s energy market. In particular, much stronger coordination with and among Member States as regards third countries by means of the mechanism for demand aggregation and the joint purchasing of natural gas, and the mechanism to support the market development of hydrogen would ensure a more effective use of the Union’s collective weight.(49)Demand aggregation for natural gas can contribute to the Union’s decarbonisation objectives by incorporating environmental standards in the aggregation of demand and the collection of offers. Launching the mechanism to support the market development of hydrogen may also help to achieve those objectives.(50)The mechanism for demand aggregation and the joint purchasing of natural gas established under this Regulation should include a number of steps, starting with natural gas undertakings or undertakings consuming natural gas established in the Union being enabled to aggregate their natural gas demand through a service provider, contracted by the Commission. That would allow natural gas suppliers to make offers on the basis of large, aggregated volumes, instead of many smaller offers to purchasers approaching them individually. The service provider would then collect the supply offers and match them with the amounts of natural gas previously aggregated. The negotiation and conclusion of contracts for the purchase of natural gas following demand aggregation should be voluntary.(51)Demand aggregation is able to ensure more equal access for undertakings across Member States to new or additional natural gas sources and lead to competitive contractual conditions for the purchase of natural gas from Member States and third countries, to the benefit of final customers. Demand aggregation should continue to support also those undertakings that were previously purchasing natural gas only or mainly from a single supplier by helping them to obtain natural gas supplies from alternative natural gas suppliers or providers in advantageous conditions. Demand aggregation could improve the position of such undertakings on the global LNG markets.(52)The Commission should ensure that service providers organise their tasks as laid down in this Regulation taking into account the objectives of the mechanism and the specificities of natural gas. In particular, when allocating supply offers of natural gas among undertakings aggregating demand, the service providers should apply methods that would not discriminate between smaller and larger participants. For instance, the service providers should allocate supply offers of natural gas in proportion to the volumes that individual undertakings declared as demand. This might be relevant where supply does not sufficiently cover demand for natural gas in the Union energy market. The Commission should specify the relevant requirements applicable to the tasks of the service providers in the relevant tender specifications.(53)The Commission should contract the necessary services of service providers through the relevant procurement procedures under Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the CouncilRegulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1). in order to implement the mechanisms established under this Regulation. In order to safeguard the essential security interests or the security of supply of the Union or of a Member State, the services should be procured from service providers established in the Union.(54)The process of aggregating demand for natural gas should be carried out by an appropriate service provider. The aggregation of demand and the purchasing of natural gas is a complex process, which needs to take into account various elements, which are not limited to prices, but also include volumes, delivery points and other parameters. Given the importance of the services relating to demand aggregation of natural gas and the mechanism to support the market development of hydrogen for transparency, diversification, decarbonisation, and the security of supply of the Union, in particular in the case of a deterioration of the security of supply situation, undertakings subject to Union restrictive measures adopted pursuant to Article 29 of the Treaty on European Union (TEU) or Article 215 TFEU, or directly or indirectly owned or controlled by, or acting on behalf or at the direction of any natural or legal person, entity or body subject to such Union restrictive measures, should be excluded from becoming a service provider for demand aggregation for natural gas or a service provider for the mechanism to support the market development of hydrogen. The Commission should specify the requirements applicable for the service providers in the tender specifications.(55)Industrial consumers which use natural gas intensively in their production processes, such as producers of fertilisers, steel, ceramic or glass, may also benefit from demand aggregation by enabling them to pool their demand, to contract natural gas and LNG supplies, and to structure them according to their specific needs. The process of organising the demand aggregation should have transparent rules on how to join it and should ensure its openness.(56)The mechanism for demand aggregation and the joint purchasing of natural gas, and the mechanism to support the market development of hydrogen should be open to undertakings established in the Union and, given the close alignment with the Union energy acquis and the internal energy market, undertakings established in the Energy Community Contracting Parties, provided that the necessary measures or arrangements are in place.(57)However, in order to phase out existing or avoid new dependencies of the Union on natural gas or hydrogen supplied by undertakings from third countries subject to Union restrictive measures, and to protect essential security interests, the mechanism for demand aggregation and the joint purchasing of natural gas, and the mechanism to support the market development of hydrogen should not be open to undertakings subject to Union restrictive measures adopted pursuant to Article 29 TEU or Article 215 TFEU, or directly or indirectly owned or controlled by, or acting on behalf or at the direction of, a natural or legal person, entity or body subject to such restrictive measures. Such undertakings should therefore be excluded from participating in both mechanisms, in particular as a supplier or buyer.(58)In order to effectively engage in the joint purchasing of natural gas and conclude natural gas agreements with suppliers, undertakings are able to create consortia or enter into other forms of cooperation with the purpose of jointly negotiating certain conditions of the purchase, such as volumes, delivery conditions of the purchase points and time, within the limits laid down in Union law. Undertakings engaging in joint purchasing should, however, ensure that the information directly or indirectly exchanged is limited to what is strictly necessary to achieve the objective pursued. The set-up and implementation of joint purchasing under this Regulation should be carried out in accordance with Union competition rules, in particular Articles 101 and 102 TFEU.(59)The protection of commercially sensitive information is of utmost importance when information is made available to the Commission, the Steering Board, coordination groups, expert groups or the service providers. The Commission should therefore apply effective instruments to protect that information against any unauthorised access and cybersecurity risks. Any personal data that might be processed as part of the mechanism for demand aggregation and the joint purchasing of natural gas, and the mechanism to support the market development of hydrogen should be processed in accordance with Regulations (EU) 2016/679Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1). and (EU) 2018/1725Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39). of the European Parliament and of the Council.(60)Russia’s unprovoked and unjustified war against Ukraine since February 2022, supported by Belarus, and subsequent weaponised reductions of natural gas supplies and manipulation of the markets through intentional disruptions of natural gas flows have laid bare vulnerabilities and dependencies in the Union and its Member States, with the clear potential of a direct and serious impact on their essential security interests and security of energy supply. At the same time, alternative gas supply sources from the global LNG market grew only modestly in 2022 and 2023. Significant new LNG liquefaction capacity is set to come online only in the course of 2025. Therefore, global natural gas markets remain very tight and are expected to remain tight for a certain period of time, leading to a continued vulnerable situation for the Union and its Member States. Against that background, it is appropriate to take measures to address that continued vulnerability.(61)The mechanism for demand aggregation and the joint purchasing of natural gas is an important instrument to organise the diversification of natural gas supplies and phasing out of the dependency on Russian natural gas in many Member States, in line with the communication of the Commission of 8 March 2022 entitled "REPowerEU: Joint European Action for more affordable, secure and sustainable energy" (the "REPowerEU"). In order to protect the essential security interests of the Union or of a Member State, in the interests of safeguarding security of supply, and to allow the effective and swift phase out of natural gas dependence, natural gas supplies originating in, and LNG supplies from LNG facilities located in, the Russian Federation or Belarus should not be offered through the mechanism for demand aggregation and the joint purchasing of natural gas until 31 December 2025. After that date, the Commission should be able to decide to temporarily exclude natural gas supplies originating in, or LNG supplies from LNG facilities located in, the Russian Federation or Belarus for periods of up to one year, which may be renewed if justified, where that is necessary to protect the essential security interests or security of supply of the Union or of a Member State. Any such limitations should not unduly disrupt the proper functioning of the internal natural market for gas, and cross-border flows of natural gas between Member States, should not undermine the security of supply of the Union or of a Member State, should respect the principle of energy solidarity, and should be taken in accordance with the rights and obligations of the Union or of the Member States with respect to third countries.(62)The Commission should take the appropriate available measures to ensure that the exclusion of natural gas or LNG supplies originating in, and LNG supplies from LNG facilities located in, the Russian Federation or Belarus from the mechanism for demand aggregation and the joint purchasing of natural gas is effective. In that regard, the Commission should request the relevant service provider to carry out the necessary verifications. Those verifications could take the form, inter alia, of a request from natural gas suppliers or producers participating in the mechanism for demand aggregation and the joint purchasing of natural gas to provide the relevant shipping documents when delivering the supplies, where technically feasible. Furthermore, participants in the mechanism for demand aggregation and the joint purchasing of natural gas should be requested to provide assurance on the compliance with their obligation not to offer or supply natural gas from, or LNG supplies from LNG facilities located in, the Russian Federation or Belarus, where applicable.(63)The Commission should be assisted by a Steering Board composed of representatives of Member States and the Commission with the aim of facilitating coordination and information exchange in relation to the demand aggregation of natural gas. The participation of Member States should be voluntary and depends in particular upon the agenda of the Steering Board’s meetings.(64)Hydrogen is an energy carrier with different features than natural gas in terms of quality, transport means and demand patterns. There is also still a significant gap between the costs of renewable and low-carbon hydrogen production and the market price of less sustainable alternatives, which may require public intervention to provide incentives until such time that electrolysers and other related hydrogen technologies and inputs are sufficiently competitive.(65)Nevertheless, the Union has a strong renewable and low-carbon hydrogen production potential. In that regard, the initiative of the European Hydrogen Bank was launched by the Commission in March 2023. The European Hydrogen Bank describes a number of activities, by which the Commission facilitates the creation of a Union hydrogen market, enables supplies from reliable international partners, and gathers and disseminates information on the development of the Union hydrogen market and on funding for hydrogen projects. Those activities are carried out within the framework of the relevant existing legal instruments, such as Directive 2003/87/EC of the European Parliament and of the CouncilDirective 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).. The voluntary tools applied to hydrogen in the framework of the European Hydrogen Bank, in particular the mechanism to support the market development of hydrogen, should focus on the acceleration of the scale-up of Union hydrogen production and market development, including by increasing the transparency of hydrogen demand, supply, flows and prices and playing a coordination role, connecting producers and consumers and facilitate blending with the existing financial instruments.(66)In the context of the work carried out under the European Hydrogen Bank, the Commission should be able to establish the mechanism to support the market development of hydrogen, with a focus on Union-based production. Given the characteristics of hydrogen and the hydrogen market, that mechanism should be established for a limited period in order to identify the most effective tools for the identification of the demand and supply of hydrogen in the Union and to explore the most optimal market and infrastructure arrangements.(67)Access to information for suppliers and off-takers in the context of the mechanism to support the market development of hydrogen should be subject to the consent of those undertakings and to compliance with Union competition law.(68)The Commission should itself be able to implement the mechanism to support the market development of hydrogen or should be able to do so through the relevant service providers. If the Commission decides to implement such a mechanism through a service provider, the provisions of this Regulation regarding the contracts with service providers, the criteria for selecting service providers, and the tasks of service providers should apply.(69)The mechanism to support the market development of hydrogen could consist of tools focused on transparency, market development visibility and voluntary demand assessment. That mechanism should be implemented under the European Hydrogen Bank. The European Hydrogen Bank should coordinate information on hydrogen supply, demand, flows and prices to strengthen confidence in the developing hydrogen market and to provide increased demand visibility for hydrogen producers and hydrogen off-takers. The mechanism to support the market development of hydrogen should take into account the maturity and liquidity of the hydrogen market as well as infrastructure availability.(70)If the Commission establishes a coordination group for matters related to the mechanism to support the market development of hydrogen, such a coordination group should be dedicated specifically to hydrogen.(71)The Union’s efforts aiming to phase out existing, and avoid new, dependence on natural gas supplies from the Russian Federation and protect the essential security interests of the Union and of the Member States should also be reflected in the context of the mechanism to support the market development of hydrogen also in view of the weaponisation of energy supplies by Russian Federation as evidenced by the reduction of natural gas supplies and disruptions of natural gas flows. The Commission should therefore have the possibility to decide to restrict activities in respect of the assessment of offers as regards hydrogen supplies originating in the Russian Federation or Belarus within the mechanism to support the market development of hydrogen by means of an implementing decision. Such a decision should be taken only where necessary to protect the essential security interests of the Union and of the Member States and should be based on the same principles as those applicable to participation in the mechanism for demand aggregation and the joint purchasing of natural gas, but adapted to the activities carried out through the mechanism to support the market development of hydrogen. In particular, the timeline for adoption and prior assessment of such a decision should be adjusted to the planned launch of the operation of the mechanism.(72)Prior to the expiry of the mechanism to support the market development of hydrogen and not later than 31 December 2029, the Commission should submit a report to the European Parliament and to the Council assessing the performance of that mechanism and, in particular, its contribution to the development of the hydrogen market in the Union. On the basis of such an assessment, the Commission should be able to submit a legislative proposal to develop a mechanism for voluntary demand aggregation and the joint purchasing of hydrogen.(73)The integration of growing volumes of renewable gas and low-carbon gas in the Union natural gas system will change the quality of natural gas transported and consumed in the Union. To ensure unhindered cross-border flow of natural gas, maintain the interoperability of markets and enable market integration, it is necessary to increase the transparency of gas quality and of the costs of its management, provide for a harmonised approach on the roles and responsibilities of regulatory authorities and system operators and reinforce cross-border coordination. While ensuring a harmonised approach on gas quality for cross-border interconnection points, Member States’ flexibility as regards the application of gas quality standards in their national natural gas systems should be maintained.(74)The blending of hydrogen into the natural gas system should be a last-resort solution, as it is less efficient compared to using hydrogen in its pure form and diminishes the value of hydrogen. It also affects the operation of natural gas infrastructure, end-user applications and the interoperability of cross-border systems. The production and use of hydrogen in its pure form and its transportation in the dedicated hydrogen system should therefore be prioritised. Best efforts should be made to avoid the use of hydrogen for applications with regard to which more energy-efficient alternatives exist. Member States’ right to take the decision on whether to apply blending of hydrogen into their national natural gas systems should be preserved. At the same time, a harmonised approach on blending of hydrogen into the natural gas system in the form of a Union-wide allowed cap at cross-border interconnection points between Member States, where transmission system operators have to accept natural gas with a blended hydrogen level below the cap, would limit the risk of market segmentation. Adjacent transmission systems should remain free to agree on higher or lower hydrogen blending levels for cross-border interconnection points. When considering such agreements, Member States should consult other Member States that are likely to be affected by the measure and take into account the situation in those Member States.(75)A strong cross-border coordination and dispute settlement process between transmission system operators on gas quality, including on biomethane and hydrogen blends, is essential to facilitate efficient transport of natural gas across natural gas systems within the Union and thereby to move towards greater internal market integration. Enhanced transparency requirements on gas quality parameters, including on gross calorific value, Wobbe Index and oxygen content, and hydrogen blends and their development over time combined with monitoring and reporting obligations should contribute to the proper functioning of an open and efficient internal market for natural gas.(76)Member States should remain able to use their original gas quality specifications where their regulatory authorities or ACER decide to maintain a cross-border restriction caused by differences in hydrogen blending levels or practices. The possibility of maintaining such cross-border restriction is particularly important in Member States with a single interconnection point or where natural gas volumes enter mainly through a single interconnection point. To ensure unhindered cross-border flows and preserve the integrity of the internal energy market, the regulatory authorities concerned and ACER, where relevant, should be empowered to restart the common dispute settlement process on a rolling basis, in order to reflect the developments that have occurred in markets for natural gas and technologies.(77)Interoperability and data exchange rules for the natural gas system that are laid down in Commission Regulation (EU) 2015/703Commission Regulation (EU) 2015/703 of 30 April 2015 establishing a network code on interoperability and data exchange rules (OJ L 113, 1.5.2015, p. 13). are essential, in particular with respect to interconnection agreements, including rules for flow control, measurement principles for natural gas quantity and quality, rules for the matching process and for the allocation of natural gas quantities, communication procedures in the case of exceptional circumstances; common set of units, gas quality, including rules on managing cross-border trade restrictions due to gas quality differences and due to differences in odorisation practices, short- and long-term gas quality monitoring and information provision; data exchange and reporting on gas quality; transparency, communication, information provision and cooperation among relevant market participants.(78)In order to ensure optimal management of the Union hydrogen network and to allow trading and supplying hydrogen across borders in the Union, the ENNOH should be established. The tasks of the ENNOH should be carried out in accordance with Union competition rules. The tasks of the ENNOH should be well defined and its working methods should ensure efficiency, transparency and the representative nature of the ENNOH. Where appropriate, network codes can be developed jointly by the ENTSO for Gas and the ENNOH on cross-sectoral issues.(79)In order to ensure that all Member States that are in the process of developing hydrogen transmission networks are represented in the ENNOH, they should, by way of a derogation from a general rule on ENNOH membership laid down in this Regulation, be able to nominate a hydrogen transmission network operator that benefits from a derogation from Article 68 of Directive (EU) 2024/1788 as a member of the ENNOH, provided that the operator is established in a Member State where no other hydrogen transmission network operator is a member of the ENNOH. Member States which do not yet have a dedicated hydrogen transmission network operator but which are planning to develop a hydrogen transmission network in accordance with their integrated national energy and climate plans, should be able to nominate an entity as associated partner within the ENNOH to be informed about the work undertaken by the ENNOH, and, as such, be able to attend assembly, board and committee meetings and participate in working groups, until their hydrogen network operators become members of the ENNOH. To that end, Member States can delegate the representative of a national association dedicated to hydrogen matters.(80)In order to ensure transparency regarding the development of the hydrogen network in the Union, the ENNOH should establish, publish and regularly update a non-binding Union-wide ten-year network development plan for hydrogen (the "Union-wide network development plan for hydrogen") targeted at the needs of the developing hydrogen markets. Viable hydrogen transport networks and necessary interconnections, relevant from a commercial point of view, should be included in the Union-wide network development plan for hydrogen. The ENNOH should participate in the development of the energy system wide cost-benefit analysis – including the interlinked energy market and network model including electricity, natural gas and hydrogen transport infrastructure as well as storage, LNG and electrolysers – the scenarios for the ten-year network development plans and the infrastructure gaps identification report as laid down in Articles 11, 12 and 13 of Regulation (EU) 2022/869 for the development of the Union lists of projects of common interest and projects of mutual interest. For that purpose, the ENNOH should closely cooperate with the European Network of Transmission System Operators for Electricity (the "ENTSO for Electricity") and the ENTSO for Gas to facilitate energy system integration.(81)To facilitate energy system integration, harness synergies and support overall system efficiency, the ENNOH, the ENTSO for Electricity and the ENTSO for Gas should cooperate closely in Union-level integrated network planning. That cooperation should cover the preparation of the joint scenarios for electricity, hydrogen and natural gas, the coordinated infrastructure gap reports, the consistent draft methodologies for energy system wide cost-benefit analysis and the integrated model pursuant to Articles 11, 12 and 13 of Regulation (EU) 2022/869. To make that cooperation efficient, the ENNOH, the ENTSO for Electricity and the ENTSO for Gas should set up common working groups preparing those deliverables. During the transitional period until 1 January 2027, the ENTSO for Gas should develop the 2026 Union-wide network development plan for hydrogen. To that end the ENTSO for Gas should fully involve hydrogen transmission network operators and the ENNOH as soon as the ENNOH is established. The 2026 Union-wide network development plan for hydrogen should consist of two separate chapters, one for hydrogen and one for natural gas. The ENNOH should develop the 2028 Union-wide network development plan for hydrogen in line with the Union-level integrated network planning pursuant to this Regulation.(82)All market participants have an interest in the tasks performed by the ENNOH. An effective consultation process is therefore essential. Overall, the ENNOH should seek, build on and integrate in its work experience with infrastructure planning, development and operation in cooperation with other relevant market participants and their associations.(83)Given that more effective progress could be achieved through an approach at regional level, hydrogen transmission network operators should set up regional structures within the overall cooperation structure, while ensuring that results at regional level are compatible with network codes and Union-wide network development plans for hydrogen. Member States should promote cooperation and monitor the effectiveness of the network at regional level.(84)Transparency requirements are necessary to ensure that trust in the emerging hydrogen markets in the Union can develop among market participants. Equal access to information on the physical status and functioning of the hydrogen system is necessary to enable all market participants to assess the overall demand and supply situation and to identify the reasons for market price developments. Information should be always disclosed in a meaningful, easily accessible and non-discriminatory manner.(85)The ENNOH should establish a central, web-based platform for making available all data relevant for market participants to obtain effective access to the hydrogen network.(86)The conditions for access to hydrogen networks in the early phase of market for hydrogen development should ensure efficient operation, non-discrimination and transparency for hydrogen network users while preserving sufficient flexibility for hydrogen network operators. Limiting the maximum duration of capacity contracts should reduce the risk of contractual congestion and capacity hoarding.(87)General conditions for granting third-party access to hydrogen storage facilities and hydrogen terminals should be laid down in this Regulation in order to ensure non-discriminatory access and transparency for hydrogen network users.(88)Hydrogen network operators should cooperate to develop network codes for the purpose of providing and managing transparent and non-discriminatory access to the hydrogen networks across borders and to ensure coordinated development of the hydrogen network in the Union, including the creation of interconnection capacities. The Commission should establish the first priority list for the identification of areas to be included in the development of hydrogen network codes one year after the establishment of the ENNOH as provided for in this Regulation. The network codes should be in line with framework guidelines developed by ACER. ACER should have a role in reviewing, on the basis of facts, draft network codes, including their compliance with the framework guidelines, and it should be enabled to recommend them for adoption by the Commission. ACER should assess proposed amendments to the network codes and it should be enabled to recommend them for adoption by the Commission. Hydrogen network operators should operate their hydrogen networks in accordance with those network codes.(89)The network codes prepared by the ENNOH are not intended to replace the necessary national rules for non-cross-border issues.(90)The quality of hydrogen transported and consumed in the Union can vary depending on its production technology and transport specificities. Therefore, a harmonised approach at Union level to hydrogen quality management at cross-border interconnectors should lead to the cross-border flow of hydrogen and to market integration.(91)Where the regulatory authority considers it to be necessary, hydrogen transmission network operators could become responsible for managing hydrogen quality in their networks, within the framework of applicable hydrogen quality standards, ensuring reliable and stable hydrogen quality for end-consumers.(92)A strong cross-border coordination and dispute settlement process between hydrogen transmission network operators is essential to facilitate the transport of hydrogen across hydrogen transmission networks within the Union and thereby to move towards greater internal market integration. Enhanced transparency requirements on hydrogen quality parameters and on their development over time combined with monitoring and reporting obligations should contribute to the proper functioning of an open and efficient internal market for hydrogen.(93)In order to amend non-essential elements of this Regulation or to supplement this Regulation in respect of non-essential elements of certain specific areas which are fundamental for market integration, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of providing guidelines setting out the details of the procedure to be followed by the transmission system operators or hydrogen transmission network operators, changing the discount levels to mitigate structural imbalances of revenue for transmission system operators, establishing the definition of the geographical area covered by each regional cooperation structure, taking into account existing regional cooperation structures, establishing network codes and guidelines for natural gas and hydrogen, amending guidelines laid down in an annex and setting guidelines as regards new natural gas and hydrogen infrastructure. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-MakingOJ L 123, 12.5.2016, p. 1.. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council should receive all documents at the same time as Member States’ experts, and their experts should systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.(94)In order to ensure uniform conditions for the implementation of this Regulation, implementing powers in accordance with Article 291 TFEU should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the CouncilRegulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ L 55, 28.2.2011, p. 13)..(95)Network codes and guidelines should be applied to entry points from and exit points to third countries. Specific circumstances, including the existence of existing long-term contractual arrangements or legal difficulties in establishing a dispute resolution procedure with transmission network operators or natural gas suppliers established in third countries, may prevent an effective application in the short term. Where justified on the basis of objective reasons, regulatory authorities should be able to apply to the Commission for a derogation from the application of the network codes or guidelines, or specific provisions thereof, which cannot be implemented at entry points from and exit points to third countries. Such derogations should be limited in time, for the minimum necessary period to remove the existing obstacles for the application of the network codes or guidelines.(96)To ensure the efficient operation of the European hydrogen networks, hydrogen network operators should be responsible for the operation, maintenance and development of the hydrogen transport network in close cooperation with other hydrogen network operators as well as with other system operators their networks are connected with, including to facilitate energy system integration.(97)It is in the interest of the proper functioning of the internal market to have standards which have been harmonised at Union level. Once the reference to such a standard has been published in the Official Journal of the European Union, compliance with it should raise a presumption of conformity with the corresponding requirements laid down in the implementing measure adopted pursuant to this Regulation, although other means of demonstrating such conformity should be allowed. In line with Article 10 of Regulation (EU) No 1025/2012 of the European Parliament and of the CouncilRegulation (EU) No 1025/2012 of the European Parliament and of the Council of 25 October 2012 on European standardisation, amending Council Directives 89/686/EEC and 93/15/EEC and Directives 94/9/EC, 94/25/EC, 95/16/EC, 97/23/EC, 98/34/EC, 2004/22/EC, 2007/23/EC, 2009/23/EC and 2009/105/EC of the European Parliament and of the Council and repealing Council Decision 87/95/EEC and Decision No 1673/2006/EC of the European Parliament and of the Council (OJ L 316, 14.11.2012, p. 12)., the Commission can request European standardisation organisations to develop technical specifications, European standards and harmonised standards. One of the main roles of harmonised standards should be to help operators in applying the implementing measures adopted pursuant to this Regulation and Directive (EU) 2024/1788.(98)The current Union standardisation framework, which is based on Regulation (EU) No 1025/2012, represents the framework by default to elaborate standards that provide a presumption of conformity with the relevant requirements of this Regulation or set out in specific delegated or implementing acts adopted pursuant to this Regulation. European standards should be market-driven and should take into account the public interest, as well as the policy objectives that are clearly stated in the Commission’s request to one or more European standardisation organisations to draft harmonised standards, within a set deadline and on the basis of consensus. However, in the absence of relevant references to harmonised standards, or where the standardisation process is blocked or there are delays in the establishment of appropriate harmonised standards, the Commission should be able to establish, by means of delegated or implementing acts, common specifications for the requirements of this Regulation, provided that in doing so it duly respects the role and functions of the European standardisation organisations. That option should be understood as an exceptional fallback solution to facilitate operators in applying relevant measures under delegated or implementing acts adopted pursuant to this Regulation and Directive (EU) 2024/1788. If a delay in establishing harmonised standards is due to the technical complexity of the standard concerned, that should be considered by the Commission before contemplating the establishment of common specifications.(99)In order to fully take into account the quality requirements of hydrogen end-users, technical specifications and standards for the quality of hydrogen in the hydrogen network should take into account already existing standards setting such end-user requirements, for example, the standard EN 17124.(100)Hydrogen transmission network operators should build sufficient cross-border capacity for the transport of hydrogen accommodating all economically reasonable and technically feasible demands for such capacity, thereby enabling market integration.(101)In view of the potential of hydrogen as an energy carrier and the possibility that Member States will engage in trade in hydrogen with third countries, it is necessary to clarify that the notification obligations in accordance with Decision (EU) 2017/684 of the European Parliament and of the CouncilDecision (EU) 2017/684 of the European Parliament and of the Council of 5 April 2017 on establishing an information exchange mechanism with regard to intergovernmental agreements and non-binding instruments between Member States and third countries in the field of energy, and repealing Decision No 994/2012/EU (OJ L 99, 12.4.2017, p. 1). for intergovernmental agreements in the field of energy relating to natural gas also applies to intergovernmental agreements relating to hydrogen, including hydrogen compounds such as ammonia and liquid organic hydrogen carriers. That Decision should therefore be amended accordingly.(102)Investments in major new infrastructure should be strongly promoted while ensuring the proper functioning of the internal markets for natural gas and for hydrogen. In order to enhance the positive effect of exempted infrastructure projects on competition and security of supply, market interest during the project planning phase should be tested and congestion management rules should be implemented. Where infrastructure is located in the territory of more than one Member State, ACER should handle as a last resort the request for exemption in order to take better account of the cross-border implications of the exemption and to facilitate the administrative handling of that request. Moreover, given the exceptional risk profile of constructing those exempted new major infrastructure projects, it should be possible temporarily to grant full or partial derogations to undertakings with supply and production interests in respect of the unbundling rules for the projects concerned. The possibility of temporary derogations should apply, for security of supply reasons, in particular to new pipelines within the Union transporting natural gas from third countries into the Union. Exemptions and derogations granted pursuant to Directives 2003/55/ECDirective 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC (OJ L 176, 15.7.2003, p. 57). and 2009/73/ECDirective 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (OJ L 211, 14.8.2009, p. 94). of the European Parliament and of the Council should continue to apply for the period for which they have been granted by the relevant exemption or derogation.(103)The escalation of the Russian military aggression against Ukraine since February 2022 has led to declining natural gas supplies from that country, and the resources from natural gas sales have been used to finance Russia’s war at the Union’s border. In particular, pipeline flows of natural gas from Russia through Belarus and the Nord Stream 1 pipeline have stopped and natural gas supplies through Ukraine have steadily decreased, seriously jeopardising the security of energy supply in the Union as a whole. Those weaponised reductions of natural gas supplies and manipulation of the markets through intentional disruptions of natural gas flows have laid bare vulnerabilities and dependencies in the Union and its Member States with the clear potential of a direct and serious impact on their essential international security interests. Past evidence has also shown that natural gas may be used to weaponise and manipulate energy markets, for instance by hoarding capacities in natural gas infrastructure, to the detriment of the Union’s essential international security interests. In order to mitigate the impact of such events, both in the current context and for the future, Member States should exceptionally be able to take proportionate measures to limit temporarily up-front bidding for capacity by any single network user at entry points and at LNG terminals for deliveries from the Russian Federation and Belarus, where necessary to protect their essential security interests and those of the Union, taking into account also the need to ensure security of supply in the Union. It should be possible for such temporary measures to be renewed where justified. That possibility should apply only in respect of the Russian Federation and Belarus, with a view to enabling Member States to respond with adequate measures to any threat to their essential security interests and those of the Union arising from the situation, including by phasing out their dependence on Russian fossil fuels, inter alia by taking early action in line with the REPowerEU objectives. Any such limitations should not run counter to international obligations of the Union or the Member States and should be in accordance with Article XXI of the General Agreement on Tariffs and Trade. Before applying any such limitations, Member States should consult the Commission and, in so far as they are likely to be affected by the limitation, other Member States, the Energy Community Contracting Parties, the Contracting Parties to the Agreement on the European Economic Area, and the United Kingdom of Great Britain and Northern Ireland, and take into account the situation in those Member States and third countries, in particular in terms of security of supply. Member States should take due account of potential effects of their measure on other Member States and in particular respect the principle of energy solidarity, including with a view to ensuring security of supply, when assessing the appropriateness and scope of any envisaged limitation.(104)The European energy sector is undergoing a significant change towards a highly efficient decarbonised economy based on renewable energy sources, while ensuring security of supply and competitiveness. While cybersecurity in the electricity subsector is already advancing with a network code on cross-border electricity flow, sector-specific mandatory rules for the natural gas subsector are needed to ensure security of the Union energy system.(105)In reaction to the significant and Union-wide energy price increases evidenced in autumn 2021 and their negative impacts, the communication of the Commission of 13 October 2021 entitled "Tackling rising energy prices: a toolbox for action and support" highlighted the importance of a proper functioning internal energy market and of a better coordination of security of supply across borders for the resilience against future shocks. On 20-21 October 2021, the European Council adopted conclusions inviting the Commission to swiftly consider measures that increase the resilience of the Union’s energy system and the internal energy market, including measures which enhance security of supply. In response to Russia’s invasion of Ukraine, the Commission on 8 March 2022 submitted REPowerEU in order to phase out the Union’s dependence on Russian fossil fuels and to accelerate the clean energy transition. To contribute to a consistent and timely response to that crisis and possible new crises at Union level, specific rules to improve cooperation and resilience, in particular concerning solidarity rules, should be introduced in this Regulation and in Regulation (EU) 2017/1938 of the European Parliament and of the CouncilRegulation (EU) 2017/1938 of the European Parliament and of the Council of 25 October 2017 concerning measures to safeguard the security of gas supply and repealing Regulation (EU) No 994/2010 (OJ L 280, 28.10.2017, p. 1).. Regulation (EU) 2017/1938 should therefore be amended accordingly.(106)As demonstrated in the Union-wide simulations of 2017, 2021 and 2022, regional cooperation and solidarity measures are essential to ensure the resilience of the Union in the case of a serious deterioration of the supply situation. Solidarity measures applicable in the case of an emergency should ensure the supply of protected solidarity customers such as households across borders. Member States should adopt the necessary measures for the implementation of the provisions concerning the solidarity mechanism, including by the Member States concerned agreeing on technical, legal and financial arrangements. Member States should describe the details of those arrangements in their emergency plans. For Member States who have not agreed on bilateral agreements, the default rules of this Regulation should apply in order to ensure such effective solidarity.(107)Such solidarity measures may therefore give rise to an obligation for a Member State to pay compensation to those affected by its measures. To ensure that the compensation paid by the Member State requesting solidarity to the Member State providing solidarity is fair and reasonable, the regulatory authorities and ACER should have, as independent authorities, the power to audit the amount of compensation requested and paid and, if necessary, request a rectification, in particular taking into account the level of indirect costs occurred due to the provision of solidarity on the basis of non-market-based measures. The newly established cooperation between indirectly connected Member States using market-based measures pursuant to this Regulation also helps to reduce potentially substantial costs that could arise when using more costly non-market-based measures.(108)Providing voluntary contributions of natural gas using market-based measures to indirectly connected Member States should be introduced in Regulation (EU) 2017/1938 in particular to avoid directly connected Member States having to use non-market-based measures where another non-directly connected Member State could provide natural gas volumes for solidarity by using market-based measures. The voluntary nature of the market-based measures and the resulting contribution of natural gas are without prejudice to the obligations of the Member States to assess and indicate in a timely manner whether and how market-based measures can provide the natural gas requested. Such a mechanism is intended to reduce the indirect and overall cost of solidarity, by avoiding the recourse to more costly non-market-based measures. Solidarity between indirectly connected Member States spreads to burden across more Member States and facilitates access of Member States without LNG facilities to global LNG supply.(109)The risk-based approach to assess the security of gas supply and the establishment of preventive and mitigation measures should include scenarios examining the impact of a decrease in natural gas demand through energy savings or energy efficiency measures, including in the Union-wide simulations of natural gas supply and infrastructure disruption scenarios pursuant this Regulation. Examining energy savings and energy efficiency scenarios ensures that the Union-wide simulation, as well as the subsequent national and common risk assessments and preventive measures, are future-proof and compatible with the energy efficiency first principle and the Union objectives of climate neutrality laid down in Regulation (EU) 2021/1119, and that they contribute to phasing out the dependence of the Union on Russian fossil fuels. This Regulation also enables Member States to reduce the non-essential gas consumption of protected customers to facilitate more natural gas savings, in particular during a crisis.(110)The risks for the security of gas supply brought about by the Russian military aggression against Ukraine that justified the amendments to Regulation (EU) 2017/1938 introduced by Regulation (EU) 2022/1032 of the European Parliament and of the CouncilRegulation (EU) 2022/1032 of the European Parliament and of the Council of 29 June 2022 amending Regulations (EU) 2017/1938 and (EC) No 715/2009 with regard to gas storage (OJ L 173, 30.6.2022, p. 17). persist today. In addition, supplementary risks should be considered such as further disruptions of critical infrastructures, following the acts of sabotage against the Nord Stream pipelines in September 2022 and the disruption of the Balticconnector pipeline in October 2023, and a deterioration of the geopolitical environment and threat landscape in supplying regions, for example with the crisis in the Middle East. Therefore, the report that the Commission is to submit by 28 February 2025 is to be accompanied, where necessary, by a legislative proposal to amend Regulation (EU) 2017/1938.(111)Certain provisions of this Regulation are building on the crisis measures introduced by Council Regulation (EU) 2022/2576Council Regulation (EU) 2022/2576 of 19 December 2022 enhancing solidarity through better coordination of gas purchases, reliable price benchmarks and exchanges of gas across borders (OJ L 335, 29.12.2022, p. 1). in reaction to the Russian war of aggression against Ukraine and the subsequent natural gas supply crisis. While Regulation (EU) 2022/2576 addressed an immediate and severe natural gas supply crisis, including by way of derogating from the existing permanent framework, this Regulation aims to transform some of the crisis measures into permanent features of the natural gas market. This concerns, in particular, the mechanism for demand aggregation and the joint purchasing of natural gas, measures to enhance the use of LNG facilities and natural gas storage, as well as additional solidarity measures in the event of a natural gas emergency. However, the implementation of those permanent features of the natural gas market requires time, inter alia due to the necessary tender procedures for the permanent mechanism for demand aggregation and the joint purchasing of natural gas, which will not be concluded before the end of 2024. In addition, the risks relating to natural gas supply are expected to last throughout 2024 in the Union. Therefore, in order to make sufficient allowance for the preparatory phase concerning those measures and with a view to avoiding an overlap with the measures introduced by Regulation (EU) 2022/2576, the relevant provisions of this Regulation should apply only from 1 January 2025. The provisions of this Regulation concerning the establishment and the selection of a service provider to perform tasks under the mechanism for demand aggregation and the joint purchasing of natural gas should apply from the date of entry into force of this Regulation, in order to ensure that the mechanism is operational from the date on which Regulation (EU) 2022/2576 expires.(112)Regulation (EU) No 1227/2011 of the European Parliament and of the CouncilRegulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (OJ L 326, 8.12.2011, p. 1). and Regulations (EU) 2019/942 and (EU) 2022/869 should therefore be amended accordingly.(113)Since the objective of this Regulation, namely the setting of fair rules for access conditions to natural gas transmission networks, storage and LNG facilities and of the measures with respect to the mechanism for demand aggregation and the joint purchasing of natural gas, and the mechanism to support the market development of hydrogen, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale or effects of such an action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,HAVE ADOPTED THIS REGULATION: