Latest EU hydrogen push prolongs gas industry hold over Europe’s energy transition – new report

The report, Hallucinating Hydrogen: Why the PCI/PMI Process Must Be Overhauled, is available here: https://bankwatch.org/publication/hallucinating-hydrogen-why-the-pci-pmi-process-must-be-overhauled 

The PCI/PMI list, some of whose electricity projects are truly high-priority, includes over a hundred hydrogen projects, with twice as many hydrogen pipelines as in the previous list. Alarmingly, 42 out of the 59 pipeline projects will most likely ship fossil gas-based hydrogen, according to the new analysis. 

Any transboundary energy infrastructure granted the lucrative status of ‘Project of Common Interest’ or ‘Project of Mutual Interest’ is eligible for EU subsidies via the Connecting Europe Facility and benefits from faster permitting. 

Yet, while the Commission boasts that PCI/PMI projects will catalyse decarbonisation, today’s report reveals that many of them will make no meaningful contribution to cutting emissions, and their necessity is little more than speculation. 

This is no coincidence. The vast majority of hydrogen projects on the list were originally proposed by the fossil fuel industry, and specifically members of ENTSOG, a gas transmission operators’ lobby group. 

In fact, as the report authors stress, the rules governing the PCI process – namely, the TEN-E Regulation – give ENTSOG a major role in the process from the early stages such as network development planning, to crafting the methodology for cost-benefit analyses and developing demand and supply scenarios. 

EU bodies – including the Agency for Cooperation of Energy Regulators and the European Advisory Board on Climate Change – and civil society have long been warning that the PCI exercise does not serve its purpose. 

Bankwatch and Food & Water Action Europe are therefore calling on Members of the European Parliament and the Council to reject the PCI/PMI list to prevent Europe being chained to fossil gas for decades to come. 

Gligor Radečić, Gas campaign leader at CEE Bankwatch Network: “While it is expected that some projects are promoted by transmission system operators, since they are often the only actors with the necessary know-how and capacity, it makes little sense that the very same companies – represented by ENTSOG – are also the ones responsible for assessing those projects.”  

Eliot Garnier-Karcenti, Senior Energy Advisor at Food & Water Action Europe: “Not voting against the PCI/PMI list would promote a carbon-intensive European Union dependent on fossil-based hydrogen. All European stakeholders are awaiting a review of the hydrogen strategy and the Trans-European Energy Networks (TEN-E) regulation. It makes no sense to support a list that will become obsolete within a few months.” 

The report’s warning is particularly timely given the new Grids Package released today by the Commission. As part of the legislative package, the proposed changes to the TEN-E Regulation could determine the future role of ENTSOG – and later also the European Network of Network Operators for Hydrogen (ENNOH) – in deciding on Europe’s transboundary energy infrastructure.  

However, the TEN-E regulation proposal, which was leaked to several media outlets last week, has so far failed to eliminate this conflict of interest in the PCI/PMI process. Aside from proposing that the Commission now develops the central scenario, all the other roles remain with ENNOH. Decision makers need to ensure that the revision of the TEN-E Regulation not only democratises the PCI/PMI process but also that it prioritises electrification to truly step up the energy transition. 

For additional information, please contact: 

Eliot Garnier-Karcenti
Senior Energy Advisor, Food & Water Action Europe
egarnierkarcenti@fweurope.org
+33 6 34 31 56 20
LinkedIn: https://linkedin.com/in/eltgk 

Gligor Radečić
Gas Campaign Leader, CEE Bankwatch Network
gligor.radecic@bankwatch.org