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1. Suppliers shall be free to determine the price at which they supply natural gas and hydrogen to customers. Member States shall take appropriate actions to ensure effective competition between suppliers and to ensure reasonable prices for the final customers.

2. Member States shall ensure the protection of customers affected by energy poverty and vulnerable household customers pursuant to Articles 26 to 29 by social policy or by other means than public interventions in the price setting for the supply of natural gas and hydrogen.

3. By way of derogation from paragraphs 1 and 2, Member States may apply public interventions in the price setting for the supply of natural gas to customers affected by energy poverty or vulnerable household customers. Such public interventions shall be subject to the conditions set out in paragraphs 4 and 5.

4. Public interventions in the price setting for the supply of natural gas shall:

(a) pursue a general economic interest and not go beyond what is necessary to achieve that general economic interest;

(b) be clearly defined, transparent, non-discriminatory and verifiable;

(c) guarantee equal access for Union natural gas undertakings to customers;

(d) be limited in time and proportionate as regards their beneficiaries;

(e) not result in additional costs for market participants in a discriminatory way;

(f) not hamper the gradual and timely phase-out of fossil gas in order to reach the Union 2030 climate target and climate-neutrality objective set out in Regulation (EU) 2021/1119.

5. Any Member State applying public interventions in the price setting for the supply of natural gas in accordance with paragraph 3 of this Article shall also comply with Article 3(3), point (d), and Article 24 of Regulation (EU) 2018/1999, regardless of whether the Member State concerned has a significant number of household customers affected by energy poverty. Prior to the removal of public interventions in the price setting for the supply of natural gas, Member States shall ensure adequate support measures for customers affected by energy poverty and vulnerable household customers in accordance with paragraph 2 of this Article.

6. In order to establish effective competition for natural gas supply contracts between suppliers, and to achieve fully effective market-based and affordable retail pricing of natural gas in accordance with paragraph 1, Member States may, for a transitional period, apply public interventions in the price setting for the supply of natural gas to household customers that do not benefit from public interventions pursuant to paragraph 3, and to microenterprises.

7. Public interventions pursuant to paragraph 6 shall comply with the criteria set out in paragraph 4 and shall:

(a) be accompanied by a set of measures to achieve effective competition and a methodology for assessing progress with regard to those measures;

(b) be set using a methodology that ensures non-discriminatory treatment of suppliers;

(c) be set at a price that is above cost, at a level where effective price competition can occur;

(d) be designed to minimise any negative impact on the wholesale market for natural gas;

(e) ensure that all beneficiaries of such public interventions have the possibility to choose competitive market offers and are directly informed at least every quarter of the availability of offers and savings in the competitive market, and shall ensure that they are provided with assistance to switch to a market-based offer;

(f) ensure, in the case the Member State proceeds with the deployment of smart metering systems in accordance with Article 17, that all beneficiaries of such public interventions are directly informed of the possibility of installing smart meters and are provided with necessary assistance;

(g) not lead to direct cross-subsidisation between customers supplied at free market prices and those supplied at regulated supply prices.

8. Member States shall notify the measures taken in accordance with paragraphs 3 and 6 to the Commission within one month after their adoption and may apply them immediately. The notification shall be accompanied by an explanation of why other instruments were not sufficient to achieve the objective pursued, of how the requirements set out in paragraphs 4, 5 and 7 are fulfilled and of the effects of the notified measures on competition. The notification shall describe the scope of the beneficiaries, in particular customers affected by energy poverty and vulnerable household customers, as well as potential other beneficiaries, the duration of the measures and the number of household customers affected by the measures, and shall explain how the regulated prices have been determined.

9. By 15 March 2025 and every two years thereafter, as part of the integrated national energy and climate progress reports, Member States shall submit reports to the Commission on the implementation of this Article and the necessity and proportionality of public interventions under this Article, and an assessment of the progress towards achieving effective competition between suppliers and the transition to market-based prices. Member States that apply regulated prices in accordance with paragraph 6 shall report on the compliance with the conditions set out in paragraph 7, including on compliance by suppliers that are required to apply such interventions, as well as on the impact of regulated prices on the finances of those suppliers.

10. The Commission shall review the implementation of this Article for the purpose of achieving market-based retail pricing of natural gas and submit a report to the European Parliament and to the Council. The report shall, where appropriate, include an assessment of the impact of those measures on the progress in achieving the Union’s climate-neutrality objective and the other energy and climate objectives. It may be combined with the report referred to in Article 5(10) of Directive (EU) 2019/944 on the implementation of that Article. The report shall be submitted together with or followed by a legislative proposal, if appropriate. Such a legislative proposal may include an end date for regulated prices.