Regulatory environment

In July 2021, the European Commission published the ‘Fit for 55’ package - a set of legislative proposals intended to update EU regulations to ensure the alignment of EU policies with the adopted climate targets. 

The ‘Fit for 55’ legislative package includes an amendment to the Renewable Energy Directive (RED II and RED III) and energy efficiency, an updated Hydrogen and Gas Markets Decarbonisation Package, a new regulation aiming to reduce methane emissions in the energy sector, an amendment to the Energy Taxation Directive, the introduction of a so-called "carbon border tax" and a revision of the EU Emissions Trading Scheme. A number of these legislative proposals were adopted in 2023 and 2024, and their implementation by Member States is pending. 

The new Hydrogen and Gas Markets Decarbonisation Package, comprising Regulation (EU) 2024/1789 and Directive (EU) 2024/1788 of 13 June 2024 on common rules for the internal markets in renewable and natural gases and in hydrogen, entered into force on 4 August 2024. The new hydrogen market rules complement the existing regulations for the natural gas market and introduce new provisions to support the decarbonisation of the gas sector and the achievement of the EU's climate goals. The package also aims to increase security of gas supply and reduce dependence on fossil fuels imported from outside the EU.

Hydrogen and Gas Market Decarbonisation Package introduces: 

• an amendment to the common rules for the transmission, distribution, supply and storage of natural gas and the functioning of the gas market;
• common rules to promote the decarbonisation of gas infrastructure through the integration of renewable and low carbon gases;
• common rules regarding the creation and operation of the market and infrastructure for hydrogen transport, supply and storage. 

The regulation will become effective six months following its entry into force, i.e. from 5 February 2025. Member States are granted 24 months to implement the directive after its entry into force, i.e. until 5 August 2026.

RED III (Renewable Energy Directive III), which entered into force in November 2024, is the EU's response to the much-needed increase in the use of energy from renewable sources in order to meet the objectives of Green Deal and the REPowerEU Plan. RED III sets an EU target for the use of renewable hydrogen (Renewable Fuel of Non-Biological Origin - RFNBO). It assumes that 42% of hydrogen consumed in industrial processes and at least 1% of energy used in transport will be based on renewable hydrogen by 2030.

The European Union's Alternative Fuels Infrastructure Regulation (AFIR) adopted in July 2023 is intended to provide refuelling infrastructure for alternative fuels, including but not limited to hydrogen and liquefied methane, across all Member States. 

In response to the geopolitical developments in the region, in May 2022, the European Commission announced the REPowerEU Plan which aims to reduce the EU's dependence on Russian fossil fuels by accelerating the transition towards renewable energy. The principal measures to reduce the EU's demand for fossil fuels and increase the use of renewables include the development of RES and improved energy efficiency. Consequently, it proposes raising the EU's binding target of RES share in energy mix to a minimum of 42.5% with the aspiration to reach 45%, to achieve 35 billion m3 of biomethane production capacity in the EU, and to achieve 10 million tonnes of domestic production and 10 million tonnes of imports of renewable hydrogen by 2030. 

The draft update of the NECP of February 2024 stipulates, likewise the EPP2040, that natural gas shall remain a transition fuel in the process towards renewable, zero-carbon energy, but also clearly emphasises the need for change and the importance of further accommodating the infrastructure to transport decarbonised gases, i.e. biomethane and hydrogen and its derivatives. The Polish Hydrogen Strategy builds on the goals set out in the NECP and the EPP2040, and envisages the deployment of hydrogen technologies in power, heating, transport, and industry.

Once completed, the updated strategic documents for the energy sector will allow the national agenda for a low-carbon energy transition including the role of hydrogen be defined, not only in the context of strengthening energy security and energy sovereignty, but also in supporting Poland's contribution to achieving the EU's climate and energy goals by 2030 and beyond. Ultimately, hydrogen may become the fuel that will play an essential role in Poland's climate and energy transition, owing to its versatile applications in such areas as industry, transport, electricity and district heating.

A summary of EU and domestic legislation references is available on the GAZ-SYSTEM website in the Legislation tab.

GAZ-SYSTEM is actively involved in state-wide and international initiatives of various industry, regulatory, technical, scientific, business, and analytical organisations that represent the interests of operators, as well as those related to energy transition.

Information on GAZ-SYSTEM's participation in organisations and initiatives promoting the development of decarbonised gases is available on the Company's website under Industry Associations tab.