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(1) Directive 2009/73/EC of the European Parliament and of the Council has been substantially amended several times. Since further amendments are to be made, that Directive 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) Directive 2003/55/EC of the European Parliament and of the Council and Directive 2009/73/EC have made a significant contribution towards the creation of the internal market for natural gas.

(4) Regulation (EU) 2019/943 of the European Parliament and of the Council and Directive (EU) 2019/944 of the European Parliament and of the Council brought about a further step in the development of the internal market for electricity with citizens at its core and contributing to the Union’s objectives of transition to a clean energy system and reducing greenhouse gas emissions. The internal market for natural gas should be built on those same principles and, in particular, ensure an equal level of consumer protection. In particular, Union energy policy should address vulnerable customers and tackle energy poverty.

(5) By means of Regulation (EU) 2021/1119 of the European Parliament and of the Council , 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 Commission communications of 8 July 2020 entitled ‘Powering a climate-neutral economy: An EU Strategy for Energy System Integration’ (the ‘EU Energy System Integration Strategy’) 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 storage . This Directive 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.

(6) This Directive complements related Union policy and legislative instruments, in particular those proposed pursuant to Commission communication of 11 December 2019 entitled the ‘European Green Deal’, such as Regulations (EU) 2023/857 , (EU) 2023/957 , (EU) 2023/1805 and (EU) 2023/2405 and Directives (EU) 2023/959 , (EU) 2023/1791 and (EU) 2023/2413 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 Directive 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.

(7) The Commission communication of 8 March 2022 entitled ‘REPowerEU: Joint European Action for more affordable, secure and sustainable energy’ (REPowerEU), which was adopted after the beginning of Russia’s unprovoked and unjustified military aggression against Ukraine, highlighted the importance of diversification of gas supplies to phase out the Union’s dependency on Russian energy. That communication recognised that scaling up sustainable biomethane and the roll-out of renewable hydrogen could play a decisive role and, to that end, called on the legislators to swiftly adopt this Directive and Regulation (EU) 2024/1789 of the European Parliament and of the Council .

(8) Regulation (EU) No 1227/2011 of the European Parliament and the Council ensures a set of obligations on gas market participants. National regulatory authorities as referred to in that Regulation are responsible for ensuring that that Regulation is enforced in the Member States. Those provisions are key to ensure that trading for gas is subject to transparency obligations.

(9) This Directive 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 Directive 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.

(10) The integration of sustainable biomethane in accordance with the criteria set out in Directive (EU) 2018/2001 of the European Parliament and of the Council in the natural gas system supports the Union’s climate objectives and helps to diversify the energy supply. Requests for the grid connection of renewable gas production should be assessed within reasonable time limits and monitored by the relevant regulatory authorities. It should be possible to prioritise connection requests at transmission and distribution level for renewable gas production over connection requests for the production of natural gas and low-carbon gas.

(11) 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 Directive should thus facilitate the emergence of markets for hydrogen, commodity-based hydrogen trading and liquid trading hubs. Any undue barriers in that regard 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 Directive 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.

(12) In line with the EU Hydrogen Strategy, renewable hydrogen is expected to be deployed on a large-scale basis from 2030 onwards for the purpose of decarbonising certain sectors, ranging from aviation and shipping to hard-to-decarbonise industrial sectors. All final customers connected to hydrogen systems should benefit from basic consumer rights applicable to final customers connected to the natural gas system such as the right to switch supplier and accurate billing information. Where customers are connected to the hydrogen network, for example industrial customers, they should benefit from the same consumer protection rights applicable to natural gas customers. However, consumer provisions designed to encourage household customers’ participation on the market such as price comparison tools and active customers should not apply to the hydrogen system.

(13) In line with the EU Hydrogen Strategy, the priority for the Union is to develop renewable hydrogen produced using mainly wind and solar energy. Renewable hydrogen produced using biomass energy falls under the definition of biogas, as defined in Directive (EU) 2018/2001. Renewable hydrogen is the most compatible with the Union’s climate-neutrality objective and zero-pollution goal in the long term and the most coherent with an integrated energy system. However, renewable hydrogen production is not likely to be scaled up fast enough to meet the expected growth in demand for hydrogen in the Union. Therefore, low-carbon fuels such as low-carbon hydrogen may play a role in the energy transition in line with the Union’s climate targets, particularly in the short and medium term, to rapidly reduce emissions of existing fuels and to support the transition of the Union’s customers in hard-to-decarbonise sectors in which more energy or cost-efficient options are not available. In order to support the transition, it is necessary to establish a threshold for greenhouse gas emission reductions for low-carbon hydrogen and synthetic gaseous fuels. Such threshold should become more stringent for hydrogen produced in installations starting operations from 1 January 2031 to take into account technological developments and better stimulate the dynamic progress towards the reduction of greenhouse gas emissions from hydrogen production.