fisikon

European Regulatory Framework

The European Union (EU), viaprimary and secondary legislative regulations, aims at the development of a competitive, unified and highly liquid energy market, with equal access and a level-playing field among competitors, greater protection of consumers and overall at the creation of a solid basis so as to supply electricity and natural gas where it is needed.

The basic goals of EU energy policy in the context of free movement of persons, services and capital are solidified in art. 194 of the Treaty on the Functioning of the EU and consist of the completion of the internal energy market, the safeguarding of security of supply, sustainable development, and competition. More specifically:

a) Ensuring security of energy supply in the Union consists mainly of: i) the adoption of immediate measures for crisis mitigation, ii) the adoption of new solidarity mechanisms for the weak,iii) the strengthening of trans-European energy infrastructure, iv) the diversification of energy sources and import routes, v) the creation of common external energy policy (“speaking with one voice”), as well as vi) the mentioned bellow under points b) and c) goals. Relevant legislative acts are the Directives concerning measures for security of supply for electricity and gas and for the mandatory maintenance of minimum stocks of crude oil and/or petroleum products.

In particular, regarding natural gas, following the Russo-Ukrainian crisis during the winter of 2008-2009, Regulation (EU) No 994/2010, concerning measures to safeguard security of gas supply was issued, aiming at the re-enforcement of mechanisms for crisis prevention and resolution.

However, the repeal of the aforementioned Regulation and the issuance of a newer one was deemed necessary, having as a basic pillar the further reinforcement of regional cooperation for crisis prevention and the establishment of common emergency plans through the creation of a solidarity mechanism between interconnected Member States (directly or via third countries) in order to secure supply at least for the solidarity protected customers. Hence, Regulation (EU) 2017/1938 of 25 October 2017 was issued concerning measures to safeguard the security of gas supply, which was further amended by Regulation (EU) 2022/1032 with regard to gas storage, which entered into force on 1 July 2022 and required EU countries' gas storage facilities to be 80% full by 1 November 2022 and 90% for the following years (see below relevant section f) REPowerEU Plan.)

Furthermore, in order to reinforce EU energy security, Decision No 994/2012/EU of the European Council was enacted establishing information exchange mechanisms with the Commission concerning intergovernmental agreements between Member States and third countries in the field of energy. The decision in question was repealed on May 2nd 2017 by a newer Decision 2017/684/EU.

b) Climate Change - Promotion of energy efficiency and energy saving and the development of new and renewable energy sources (RES), use of alternative fuels, as well as the development of an emissions trading system. Relevant legislative acts are the rules concerning the:

  1. promotion of power generation from RES [Directive 2018/2001/EU, amends Directive 2009/28/EC and repeals the latter as of July 1st, 2020], which defines an EU wide binding target for RES of 32% – at least – of gross final energy consumption by 2030, by contribution of each Member State to the framework of the integrated national energy and climate plans. The Directive in question was amended by Directive (EU) 2023/2413 (see below relevant section e) "Fit for 55" Package.)
  2. use of biofuels and other renewables in transport [Directive 2003/30/EU], according to which biofuels or other renewable fuels are promoted for the replacement of diesel or petrol in transport, so as to contribute to the attainment of the climate change targets. Member States should have placed in their market by 31 December 2010 biofuels and other renewable fuels 5.75 %, calculated on the basis of energy content, of all petrol and diesel used for transport purposes,
  3. development of the trans-European transport network (Regulation (EU) No 1315/2013) and alternative fuel infrastructures [Directive 2014/94/EE] concerning the framework of measures for the deployment of alternative fuel infrastructures (defined as electricity, hydrogen, biofuels as defined in Directive 2009/28/EC, synthetic and paraffinic fuels, natural gas, including biomethane, and liquefied petroleum gas (LPG)), and the minimum standards of such infrastructure (including the recharging points for electric vehicles and natural gas and hydrogen vehicles refueling), in accordance with the specific national policy framework provisions,
  4. geological storage of CO2 [Directive 2009/31/EC], which enacts the legal framework for the environmentally safe storage of CO2, in the territory of the Member States, their exclusive economic zones and on their continental shelves, to contribute to the fight against climate change,
  5. greenhouse gas emission allowance trading system [Directive 2003/87/EC], which applies to energy activities, production and processing of ferrous metals and mineral industry, so as to promote the reduction of emissions (EU target for a decrease of at least by 40% until 2030) in a cost efficient and economically effective manner, which was amended by Directive (EU) 2018/410 of 14 March 2018 with the aim of enhancing cost-effective emission reductions and promoting low-carbon investments and Decision (EU) 2015/1814. Also, Directive 2003/87/EC-ETS I was amended by Directive (EU) 2023/959 – ETS II (see relevant sub-section 1 below) System for trading greenhouse gas emission rights within the Union - ETS (ETS) of section e) “Fit for 55” package),
  6. energy efficiency [Directive 2018/2002/EU, which amends Directive 2012/27/EU , repealing Directives 2004/8/EC and 2006/32/EC], which foresees an improvement of energy efficiency of at least 32.5% by 2030, as well as the energy performance of buildings [Directive 2018/844/EU], which mainly amends the provisions of [Directive 2010/31/EU], so as to adapt to the new technologies and for their further enhancement in order to achieve the target for reduction of greenhouse gas emissions (taking into consideration that the building stock is responsible for 36% of the total EU CO2 emissions), providing for a 3% average annual renovation rate,
  7. Regulation on the governance of the Energy Union and Climate Action [Regulation 2018/1999/EU,repealing Regulation (EU) 525/2013 as of 1 January 2021, that enacts a governance mechanism, so as to ensure the achievement of the 2030 and long-term objectives and targets of the Energy Union and to stimulate cooperation between Member States, on the basis of integrated national energy and climate plans covering 10-year periods. The Regulation in question, in conjunction with the aforementioned Directives for Renewable Energy 2018/2001/EU and Energy Efficiency 2018/2002/EU, comprise the framework which is predominantly known as the “Clean Energy Package”.

The roadmap for achieving the European Green Deal (COM (2019) 640) was issued by the EU on 11/12/2019. According to this roadmap it is expected that:

  • By March 2020, the first Energy Law will be issued, to ensure the climate neutrality goals for 2050 and the policies needed to achieve them by the member-states. In this regard, on 9.7.2021 Regulation (EU) 2021/1119 was published to establish a framework aiming to achieve climate neutrality and to amend regulations (EC) 401/2009 and (EU) 2018/1999 ("European climate legislation"), with entry into force from 29.07.2021. The Regulation sets a binding target for climate neutrality in the Union by 2050 so that net emissions are zero by that year, while at the same time it sets as a binding climate target for 2030 the domestic reduction of net greenhouse gas emissions (emissions after deduction of removals) by at least 55 % compared to 1990 levels. It is also projected that the contribution of net removals to the Union's 2030 climate target is limited to 225 Mt of CO2 equivalent. In addition, it is stated that no later than six months after the first global assessment referred to in Article 14 of the Paris Agreement, the Commission shall submit a legislative proposal, on a case-by-case basis, and based on a detailed impact assessment, to amend this Regulation to include the climate objective of the Union for 2040.
  • By June 2021, a revision of the framework for the reduction of greenhouse gas emissions, i.e. Directive 2003/87 / EC (ETS), so as to extend it to new sectors, of the Energy Efficiency Directive 2018/2002 / EC, the Directive on the promotion of RES 2018/2001/EC, Regulations 2018/841 and 2018/842 and, where appropriate, the Energy Law, as well as the Directive 2003/96/EC for the taxation of Energy Products Products (see relevant revisions below in section e) Fit for 55 Package),
  • By June 2020, an evaluation of the National Energy and Climate Plans (NECPs), and even more ambitious climate goals will be pursued in 2030, to be reflected in the NECPs of each member-state in their next revision in 2023. In this regard, the Commission's assessment (COM(2020) 564) of the EU-wide impact of NECPs for 2021-2030 was issued, which includes proposals for an ambitious climate target plan for reducing emissions in the EU by 55% by 2030 compared to 1990 levels,
  • Within 2020, an assessment to review the regulatory framework for infrastructure, including the TEN-E Regulation, so that its provisions are compatible with climate neutrality targets and so as to include new technologies (e.g. smart grids, CO2 storage, H2 networks, etc) (see below relevant section c) "Promoting the optimum interconnection of energy networks"),
  • By 2021, revision of the transport framework as defined by Directive 2014/94/EC and the TEN-T Regulation to accelerate the goal of zero or low emissions from vehicles and ships.The aforementioned Directive was repealed by virtue of Regulation (EU) 2023/1804 (AFIR regulation) (see below relevant section e) “Fit for 55” package).

c) Promotion of the optimum interconnection of energy networks, mainly through the characterization of projects as “Projects of Common Interest” (PCI) and funding from the European Investment Bank and the Cohesion Fund (art. 177 of the Treaty on the Functioning of the EU). According to Regulation (EC) No 2236/95, projects of common interest have priority in the granting of Community aid. Decision No 1364/2006/EC lays down the basic guidelines for trans-European energy networks which specify PCIs and priority projects among the trans-European electricity and gas networks. Regulation (EU) No 347/2013 (TEN-E) sets the guidelines for trans-European energy infrastructure, defining 12 corridors and priority areas in energy networks and foreseeing expediting measures for the relevant permitting procedures of PCIs. The Regulation in question was amended by Regulation (EU) No 1391/2013, so as to define the Union list of projects of common interest. Furthermore, Regulation (EU) No 1316/2013 establishes a mechanism for the facilitating of funding, the Connecting Europe Facility (CEF) aiming at the support of priority projects from 2014-2020 in the sectors of energy, transport and telecommunications.

The provisions of Regulation No 617/2010, which was substituted by Regulation (EU) No 256/2014, contribute to the effective implementation of the above, which in turn request that Member States notify the Commission of investment projects in energy infrastructure within the European Union. Regulation (EU) no. 347/2013 (TEN-E) was repealed by Regulation (EU) 2022/869 of 30 May 2022 on guidelines for trans-European energy infrastructure, which entered into force on 23.6.2022 in order to fully align with the objectives of the Green Deal. The new Regulation contains a strengthened framework for cross-border cooperation to accelerate the implementation of offshore networks as a key element of the energy transition, a strengthened focus on infrastructure categories such as smart electricity grids, an expanded scope to include hydrogen networks, as well as mandatory sustainability assessment for all eligible projects. It is also envisaged that during a transition period dedicated hydrogen infrastructure converted from natural gas can be used to transport or store a pre-defined mixture of hydrogen with natural gas or biomethane. The transition period will end on 31 December 2029, while any eligibility for Union financial assistance ends on 31 December 2027.

d) Ensuring the functioning (integration) of the internal energy market, which is estimated to create a healthy and safe investment environment which will fund the development of infrastructure as well as provide the possibility to consumers to enjoy “value for money” energy services. The creation of competitive energy markets, taking into consideration the particularities of each Member State (eg. SGEI), as well as security of supply requirements, will contribute to the integration of the internal energy market.

The aforementioned policies aiming at the integration of the internal energy market have taken place gradually through consecutive legislative measures (“energy packages”) adopted. To date, these legislative packages are as follows:

The 1st energy package (1998-2003), which primarily comprises Directives pertaining to common rules for the internal energy markets for electricity and natural gas, established the national regulatory authorities and introduced the right of Third Party Access (TPA), as well as the obligation for accounting and operational unbundling. It is noted that each Member State was allowed to choose on its own the necessary regulatory measures as well as the market design depending on the particular structural and operational conditions. The national regulatory authorities were given the ever so important role of market supervision and monitoring of compliance with the above principles and of regulation of the electricity supply tariffs. In this context, Directive 98/30/EC concerning common rules for the internal market in natural gas was issued.

The 2nd energy package (2003-2009), comprising mostly Directives on common rules for the internal electricity and gas markets and Regulations on conditions for access to the network for cross-border exchanges in electricity and for access to the natural gas transmission networks, attempted to extend the results of the 1st energy package by introducing the right of consumers to freely choose and easily switch their supplier, as well as the obligation of legal separation between the activities of generation/supply and transmission or distribution. Specifically, Directive 2003/55/EC andRegulation (EC) No 1775/2005, were issued for natural gas, the latter of which sets the technical rules for access to the transmission networks, as well as the rules for capacity allocation and congestion management.

The 3rd energy package (2009-to date). Despite the important progress accomplished in the energy sector, obstacles were still noticed relating to healthy competition in the wholesale gas and electricity markets, due to the fact that the markets remained primarily national with relatively limited cross-border trade and high concentration levels. In order for the European Commission to detect the obstacles to the development of effective competition in these markets, the European Commission launched in 2005 the Energy Sector Inquiry, which was completed in 2007. Based on the results of this sector inquiry and in order to tackle the identified problems in the gas and electricity market, the 3rd energy package was adopted, which mainly contains Directives on common rules for the internal market in electricity and the internal market in natural gas, a Regulation establishing the Agency for Cooperation of the Energy Regulators (ACER), as well as Regulations on conditions for access to the network for cross-border exchanges in electricity and for access to the natural gas transmission networks. The main amendments brought about by this new legislative package consist of the ownership unbundling of the transmission activities from the generation/supply activities, the reinforcement of responsibilities and independence of the regulatory authorities and the cooperation among regulators, system operators and the European Commission, as well as the enhancement of transparency of information. In particular, with respect to natural gas, the 3rd energy package comprises the following:

a) Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, which is amended by virtue of Directive 2019/692/EU having as an objective to ensure that the rules governing the EU's internal gas market also apply to gas transmission systems between a member state and a third country, up to the border of the member state's territory and territorial sea.

b) Regulation (EC) No 715/2009 on the conditions for access to the natural gas transmission networks and repealing Regulation (EC) 1775/2005, which contains measures on congestion management and provides for the establishment of the European Network of Transmission System Operators for Gas (ENTSO-G), and

c) Regulation (EC) No 713/2009 establishing an Agency for the Cooperation of Energy Regulators, which is repealed as of July 4th 2019 with the entry into force of the new Regulation (EU) 2019/942.

The aforementioned 3rd energy package is supplemented by a series of Directives and Regulations, primarily the following:

– Directive 2003/96/EC concerning the restructuring of the Community framework for the taxation of energy products and electricity (under revision).

– Directive 2008/92/EC concerning a Community procedure to improve the transparency of gas and electricity prices charged to industrial end-users, which obliges Member States to ensure that the relevant prices and pricing mechanisms are announced to Eurostat twice per year.

– Regulation (EU) No 1227/2011 on wholesale energy market integrity and transparency (known as “REMIT” Regulation), according to which ACER is vested with the responsibility of monitoring energy wholesale natural gas and electricity markets through the collection and processing of data related to market transactions. ACER is also given the responsibility of investigation of possible abusive market practices, as well as the coordination of appropriate penalties for breaches of the provisions of REMIT, the application of which is the responsibility of the Member States. REMIT was supplemented by the provisions of Implementing Regulation (EU) No 1348/2014 on data reporting, implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011, and amended under the new Regulation (EU) 2024/1106 (REMIT II). [For further information please see relevant “Requirements of REMIT” sub-section of the “Regulatory Framework” section.]

– Commission Decision 2010/685/EUamending Chapter 3 of Annex I to Regulation (EC) No 715/2009 concerning the technical information necessary for network users to gain effective access to the system.

– Commission Decision 2012/490/EU amending Annex I to Regulation (EC) No 715/2009, regarding congestion management procedures on the natural gas transmission networks (CMP), effective since September 2012, which were supplemented by Commission Decision (EU) 2015/715.

– Regulation (EU) No 984/2013 establishing a Network Code on Capacity Allocation Mechanisms in Gas Transmission Systems and supplementing Regulation (EC) No 715/2009, which was repealed by Regulation 2017/459/EU (CAM) in force as of April 2017

– Regulation (EU) No 312/2014 establishing a network code on balancing in gas transmission networks (BAL), in force as of 1 October 2015.

– Regulation (EU) No 703/2015 of the Commission establishing a network code on interoperability and data exchange rules (Interoperability), in force since 1 May 2016.

– Regulation 2017/460/EU establishing a network code on harmonised transmission tariff structures for gas (TAR), the provisions of which shall apply as of 31 May 2019.

e) "Fit for 55" package

The European Commission approved on 14.7.2021 a set of measures (known as the "Fit for 55" package) with the aim of turning the ambitions of the Green Deal into legislation. The package of measures is a series of proposals to revise legislation on EU climate, energy, land use, transport and taxation policies to adapt them so as to achieve a reduction of net greenhouse gas emissions by at least 55 % by 2030, compared to 1990 levels. The proposals will enable the necessary acceleration of greenhouse gas emission reductions over the next decade. They combine a) implementing emissions trading in new sectors and tightening the existing EU emissions trading system, b) increasing the use of renewable energy sources (increased target to produce 40% of energy from RES by 2030), c) higher energy efficiency, d) faster development of low emissions transport means (reduction of average emissions of new cars by 55% from 2030 and by 100% from 2035 compared to 2021 levels.

As part of the "Fit for 55" package, in accordance with the above, the following basic legislations were enacted:

  1. Greenhouse gas emissions trading system within the Union - ETS (ETS)

    On May 10, 2023, Directive (EU) 2023/959 was issued to amend Directive 2003/87/EC on the establishment of a greenhouse gas emission allowance trading system within the Union. The Directive in question, which came into force on 30.5.2023, creates a new Emissions Trading System, the ETS II, which operates in parallel with the ETS, expanding its scope to cover CO2 emissions from fuel combustion in buildings, road transport and additional operators (mainly small industries and commercial buildings not covered by the existing ETS). The aim of this Directive is to reduce emissions by 42% by 2030 compared to 2005. The obligated parties (as regulated entities) are the fuel providers and not the final consumers and they will be required to buy and deliver allowances to cover their emissions. The start of operation of the new ETS is planned for 2027, however the regulated entities must by 1.01.2025 have issued a Greenhouse Gas Permit in order to carry out the activity of Annex III of the Directive.

    Simultaneously with Directive (EU) 2023/959, Regulation (EU) 2023/957 was issued to amend Regulation (EU) 2015/757 regarding the introduction of provisions for the inclusion of maritime transport activities in the EU emissions trading system and for the monitoring, reporting and verification of additional greenhouse gas emissions, including CH4 and N2O emissions, as well as emissions from additional types of ships, i.e. offshore activity. This Regulation applies from 5.6.2023, however certain provisions apply from 1.1.2024.

    In connection with the above, relevant secondary Regulations were passed, such as Implementing Regulation (EU) 2023/2122 of October 12, 2023 amending Implementing Regulation (EU) 2018/2066 on the monitoring and reporting of greenhouse gas emissions by implementation of Directive 2003/87/EC with application from 1.1.2024 and Delegated Regulation (EU) 2023/2904 of 25 October 2023 amending Delegated Regulation (EU) 2019/1122 supplementing Directive 2003/87/EC as regards the functioning of the Union Registry, of which article 1 points 21), 22), 25) and 28) point c) apply from 1.1.2025 and article 1 point 30 point b) applies from 1.1.2027.

  2. Directive for the promotion of energy from RES - RED III

    On October 18, 2023, Directive (EU) 2023/2413 was issued to amend Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/EC regarding the promotion of energy from renewable sources, and the repeal of Directive (EU) 2015/652, which entered into force on 20.11.2023, which member states should transpose into their national legislation by 21.5.2025. The general objective of this Directive is to increase the share of renewable energy in total EU energy consumption to 42.5% by 2030 with an additional indicative top-up of 2.5% to enable the 45% target to be reached. In particular, the following are foreseen per sector:

    For the Transport sector, Member States will be able to choose between a binding target of a 14.5% reduction in transport greenhouse gas intensity from the use of renewable energy sources by 2030 or a binding share of at least 29% of renewable energy sources in final energy consumption in the transport sector by 2030. The new rules set a binding combined sub-target of 5.5% for advanced biofuels (generally derived from non-food-based feedstocks) and renewable fuels of non-biological origin (mainly renewable hydrogen and hydrogen-based synthetic fuels) in the share of renewable energy supplied to the transport sector. Under this target, there is a minimum requirement of 1% of renewable fuels of non-biological origin (RFNBO) in the share of renewable energy supplied to the transport sector in 2030.

    For Industry, renewable energy use is projected to increase annually by 1.6%, and 42% of hydrogen used in industry should come from RFNBOs by 2030 and 60% by 2035.

    For buildings, heating and cooling, the new rules set an indicative target of at least a 49% share of renewable energy in 2030. The targets for renewable heating and cooling will be gradually increased, with a binding increase of 0.8% per year nationally until 2026 and 1.1% from 2026 to 2030. The minimum annual average applicable to all Member States is supplemented by additional indicative increases calculated specifically for each Member State.

    Finally, the new Directive provides for the acceleration of the licensing procedures for renewable energy projects. Member States will design acceleration zones for RES projects where said projects will be subject to simplified and fast permitting procedures. RES development is also considered to be in the "overriding public interest", which will limit the grounds for legal objections to new installations.

  3. Directives for Energy Efficiency and Energy Performance of Buildings (EED & EPBD)

    In September 2023, Directive (EU) 2023/1791 was issued on energy efficiency and the amendment of Regulation (EU) 2023/955, which entered into force on 20.10.2023 and application from 12.10.2025.

    The revised Energy Efficiency Directive significantly increases the EU's energy efficiency ambition and establishes "energy efficiency first" as a fundamental principle of EU energy policy, giving it legal status for the first time. In practice, this means that energy efficiency must be taken into account by EU countries in all relevant policies and major investment decisions made in the energy and non-energy sectors.

    This Directive increases the EU's energy efficiency target, making it binding on EU countries to collectively ensure an additional 11.7% reduction in energy consumption by 2030, compared to the EU reference scenario projections for 2020. As a result, total energy consumption in the EU by 2030 should not exceed 992.5 Mtoe for primary energy and 763 Mtoe for final energy.

    EU countries are required to achieve cumulative end-use energy savings for the entire reference period (from 2021 to 2030), equivalent to new annual savings of at least 0.8% of final energy consumption in 2021-2023, at least 1.3 % in 2024-2025, 1.5% in 2026-2027 and 1.9% in 2028-2030.

    Related to the Energy Efficiency Directive, Directive (EU) 2024/1275 on the energy performance of buildings was issued on 8.5.2024, with entry into force from 28.5.2024, which defines the framework for the Member States to reduce emissions and energy use in buildings in the EU, from homes and workplaces to schools, hospitals and other public buildings. The revised Directive sets ambitious targets for reducing the overall energy use of buildings across the EU, taking into account national specificities.

    Each Member State will adopt its own national pathway to reduce the average primary energy use of residential buildings by 16% by 2030 and by 20-22% by 2035. For non-residential buildings, 16% of the worst performing buildings should be renovated by 2030 and 26% of the same buildings by 2033. Member States will be able to exempt certain categories of residential and non-residential buildings from these obligations, including historic buildings or vacation homes.

    The revised Directive makes 'zero emissions' the standard for new buildings, i.e. all new residential and non-residential buildings must have zero on-site emissions from fossil fuels, from 1 January 2028 for public buildings and from 1 January 2030 for all other new buildings, subject to special exceptions. The Directive also contains new provisions for the phasing out of fossil fuels for heating buildings and the enhancement of the development of solar energy installations, considering national conditions.

  4. CO2 emissions for passenger & light commercial cars and new heavy vehicles

    Regulation (EU) 2023/851 amending Regulation (EU) 2019/631 as regards the strengthening of performance standards for CO2 emissions from new passenger cars and new light commercial vehicles was published on 25 April 2023. The aforementioned Regulation, which is binding and applies immediately in all member states, entered into force on 15.5.2023. It sets a CO2 reduction target of 100% in 2035, as well as an intermediate CO2 reduction target of 55% in 2030 (50% for light commercial vehicles).

    Regarding Life Cycle CO2 Emissions, it is envisaged that by 31.12.2025, the Commission will publish a report setting out a methodology for the assessment/reporting of Life Cycle CO2 Emissions. By the same date, the Commission will adopt delegated acts to supplement the regulation "setting out a common Union methodology for the assessment and consistent reporting of data on the full life cycle CO2 emissions of passenger and light commercial vehicles".

    Also, an integral part of the package of measures on adaptation to the 55% target of the Fit for 55 package, is the revision of the Regulation for the standards for CO2 emissions of heavy commercial vehicles, with the publication on 6.6.2024 of Regulation (EU) 2024/ 1610 on the strengthening of CO2 emission performance standards for new heavy vehicles, which will apply from 1.7.2024. The new rules maintain the existing 2025 target of 15% reduction in emissions for heavy trucks over 16 tonnes. In line with the EU's climate targets for 2030 and beyond, the regulation sets the following new targets:

    • reduction of emissions by 45% from 2030 (up from 30%)

    • reduction of emissions by 65% from 2035

    • reduction of emissions by 90% from 2040

    The above targets will apply to medium trucks, heavy trucks over 7.5 tonnes and coaches, as well as the corresponding commercial vehicles from 2035 onwards.

  5. Regulation for the development of alternative fuel infrastructures - AFIR

    Regulation (EU) 2023/1804 (AFIR ) on the development of alternative fuel infrastructure and repealing Directive 2014/94/EU was published on 22.9.2023 and applies from 13.4.2024. The Regulation in question sets mandatory development targets in relation to electric recharging and hydrogen refueling infrastructures regarding the road sector, the land-based supply of electricity to seaports and inland navigation ports, and the supply of electricity to parked aircraft. It also provides for the deployment of a minimum number of recharging and refueling infrastructures across the EU under full price transparency, common minimum payment methods and consistent customer information across the EU, ensuring adequate and user-friendly alternative fuel infrastructure for road, marine and air transport.

  6. FuelEU Maritime Regulation

    Regulation (EU) 2023/1805 (FuelEU) on the use of renewable and low-carbon fuels in maritime transport and amending Directive 2009/16/EC was also published on 22.9.2023 with application from 1.1.2025, with the exception of articles 8 and 9, which apply from 31.8.2024. The main objective of this Regulation is to increase the demand and the consistent use of renewable and low-carbon fuels, as well as the reduction of greenhouse gas emissions from the shipping sector, while ensuring the smooth operation of maritime traffic and avoiding distortions in the internal market.

    The new Regulation includes measures to ensure that the greenhouse gas emission intensity of the fuels used by the shipping sector will gradually decrease over time, by 2% in 2025 to up to 80% by 2050. A special incentive scheme to support the adoption of renewable fuels of non-biological origin (RFNBO) with high decarbonisation potential, while excluding fossil fuels from the Regulation's certification process. There are also provisions for passenger ships and container ships to use shore-based electricity from 2030 for all electricity needs while berthed in major EU ports, as well as a voluntary pooling mechanism under the which ships will be allowed to combine their compliance balance with one or more other ships, with the group having to meet the greenhouse gas emission intensity limits on average. Finally, there are time-limited exceptions for the special treatment of excessively remote regions, small islands and areas that are economically highly dependent on their connectivity.

  7. Methane Regulation

    Regulation (EU) 2024/1787 on the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942 was published on July 15, 2024, with application from August 8, 2024. This Regulation imposes on the natural gas, oil and coal industries the obligation to properly measure, monitor, report and verify their methane emissions according to the highest monitoring standards, and to take measures to reduce them, by regularly submitting reports to the competent authorities on the quantification and measurements of methane emissions at the source level. The new Regulation also obliges oil and gas companies to carry out regular surveys of their equipment to detect and repair methane leaks on EU territory within specific deadlines, as well as prohibiting routine venting and flaring and restricting emergency venting and flaring in unavoidable circumstances, such as for safety reasons or in case of equipment malfunction.

    In addition, this regulation addresses methane emissions associated with oil, gas and coal imports by establishing a methane transparency database in which data submitted by EU importers and operators will be made publicly available and requires the Commission to compile methane performance profiles of countries and companies so that importers can make informed choices about their energy imports. The Commission will also put in place a global monitoring tool for methane emitters and a rapid alert mechanism for super-emitting events. Finally, from January 2027 it is envisaged that new oil, gas and coal import contracts can only be concluded if exporters apply the same monitoring, reporting and verification obligations as EU producers, specifying a methane intensity methodology and maximum levels that should be met for those contracts.

  8. Hydrogen and Decarbonized Gas Package

    The update of EU rules to decarbonise natural gas markets and promote hydrogen, known as the "Hydrogen and Decarbonised Gas Package" is a particularly important piece of legislation in the "Fit for 55" Package to implement the objectives of the European Green Deal. This package of measures consists of Directive (EU) 2024/1788 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 and Regulation (EU) 2024/1789 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, which was approved in May 2024, following a relevant proposal from the Commission in December 2021. The legislative texts in question were published on July 15 2024 in the Official Journal of the EU with the Regulation being applicable from 5 February 2025, while the Member States must incorporate the provisions of the Directive into their national law by August 5, 2026.

    By transposing the provisions into national law, they aim to facilitate the uptake of renewable and low-carbon gases, including hydrogen, while ensuring security of supply and energy affordability for all EU citizens.

    The above legislation provides for the following main provisions:

    • Dedicated infrastructure and hydrogen market

    The revised rules create a level playing field, based on EU-wide rules, for the hydrogen market and infrastructure and remove barriers for their development. The right conditions are also being created for the repurposing of some of the existing natural gas infrastructure for hydrogen, which will result in cost savings while supporting decarbonization. In addition, the European Network of Network Operators for Hydrogen (ENNOH) is established which will ensure the necessary focus on the development of dedicated hydrogen infrastructure in the EU and facilitate the efficient transport of hydrogen outside the EU. In addition, the Directive introduces a system of terminology and certification of low-carbon hydrogen and low-carbon fuels, complementing the revised Renewable Energy Directive EU/2023/2413).

    • Renewable and low-carbon gases

    The revised rules give renewable and low-carbon gas better access to markets and infrastructure, facilitating the growing replacement of fossil gas, in line with the objectives of the REPowerEU plan. Provisions are in place to ensure greater transparency and better use of free capacity at LNG terminals and gas storage facilities, allowing for more flexible gas trade. It also provides that long-term fossil gas contracts cannot run beyond 2049. These measures are expected to pave the way for the import of renewable and low-carbon gas from outside the EU, allowing it to enter the existing natural gas network and support the decarbonisation of the EU gas market.

    • Integrated network design

    The new package aims to ensure more integrated network planning between electricity, natural gas and hydrogen networks to make the development of energy infrastructure more cost-effective and enable the cross-border exchange of information on the use of transmission systems.

    • Promote consumer empowerment

    The recast Directive strengthens the rights and protection of consumers in the natural gas market, aligning them with those already established in the EU electricity market rules. This is done so that consumers enjoy a consistent, safe and user-friendly experience in both sectors ensuring that:

    • consumers receive better information about offers, as well as their contracts and bills, including information that allows them to make renewable and low-carbon choices;
    • they will be able to choose the best deal using reliable comparison tools, easily switch suppliers and gain more control over their gas consumption through smart metering systems,
    • are better protected in the event of a dispute with their supplier, and to be able to turn to out-of-court dispute mechanisms, such as the energy ombudsman.

    There are also special provisions for vulnerable consumers and those affected by energy poverty, who will be particularly protected against gas supply disconnections, including during the planned phase-out of fossil gas. In addition, it sets clear criteria for when EU countries can intervene to set prices and sets out conditions under which Member States can take swift action in the event of a gas price crisis, ensuring enhanced consumer protection.

    9. • Improving energy security and supply

    The hydrogen and gas decarbonisation package amends the Security of Gas Supply Regulation (EU/2017/1938) and aims to extend the scope of the Regulation to include renewable and low-carbon gases in the natural gas network, while adapting to new risks such as cyber threats. In addition, the amendments operationalize and extend the solidarity mechanism, which ensures that EU countries provide each other with "solidarity gas" even in the event of a major emergency, ensuring that a set of formal rules apply when EU countries have not signed bilateral agreements. Ultimately, changes to the existing regulatory framework aim to increase the EU's preparedness, resilience and strategic autonomy.

    Also, within the framework of the "Fit for 55" Package, the following regulations were issued:

    • Regulation (EU) 2023/956 of 10 May 2023 establishing a Carbon Border Adjustment Mechanism (CBAM). which is valid from 17.5.2023 and applies from 1.10.2023.

    • Regulation (EU) 2023/955 of 10 May 2023 for the establishment of a Social Fund for the Climate and for the amendment of regulation (EU) 2021/1060 with entry into force from 26.5.2023 and application from 30.6.2024.

    • Regulation (EU) 2023/857 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, effective from 16.5.2023.

    • Regulation (EU) 2023/839 of 19 April 2023 amending Regulation (EU) 2018/841 as regards the scope, simplification of reporting and compliance rules, and setting Member States targets for 2030, and Regulation (EU) 2018/1999 on improving monitoring, reporting, progress monitoring and review, with effect from 11.5.2023.

f) REPowerEU plan

As a result of the Russian invasion of the Ukraine on 24 February 2022 and the resulting excessively high gas and electricity prices, the European Commission proposed a series of actions and countermeasures to help EU countries and citizens cope with the increasing prices, while phasing out its dependence on Russian fossil fuels. Thus, on 18 May 2022, the REPowerEU plan was published, presenting a comprehensive set of actions and resources to achieve the goals for energy savings, clean energy production and diversification of energy supplies.

In the context of the REPowerEU plan, a series of legislation was enacted in the form of emergency measures to address the energy crisis, as follows:

  1. Gas storage - Regulation (EU) 2022/1032 amending Regulations (EU) 2017/1938 and (EC) No 715/2009, which entered into force on 1 July 2022 and required the filling of gas storage facilities of EU countries to 80% by 1 November 2022 and to 90% for the following years.
  2. Saving gas - Regulation (EU) 2022/1369 on coordinated measures to reduce gas demand, which entered into force from 9 August 2022 to 31 March 2023, while according to Regulation (EU) 2023/706, the measures were extended for one more year, i.e. until 31 March 2024.
  3. Emergency intervention to tackle high prices in the electricity sector – Regulation (EU) 2022/1854, issued on 6 October 2022 and including measures to reduce electricity demand, to reduce electricity costs for consumers and proposes a temporary revenue cap for electricity producers using lower-cost technologies such as renewables, nuclear and lignite.
  4. Solidarity - coordinated natural gas purchasing - Regulation (EU) 2022/2576 issued on 19 December 2022 provided a legal framework for the EU Energy Platform (AggregateEU) to support EU countries in preparing for the winter 2023/ 24 and in particular for the filling of gas storage facilities.
  5. Market Correction Mechanism (MCM) - Regulation (EU) 2022/2578 establishing a mechanism to protect Union citizens and the economy from excessively high prices. The temporary mechanism entered into force on February 15, 2023, with a duration of one (1) year. It provides for the MCM to be automatically activated when the front-month TTF derivative settlement price exceeds €180/MWh for 3 working days and when the TTF price is €35 higher than the reference price for LNG in the world markets for the same 3 working days. Market corrections are monitored by the Agency for the Cooperation of Energy Regulators (ACER) and published on the ACER website.

    On 31 March 2023, the Commission extended the application of the Market Correction Mechanism to other trading hubs outside the TTF, in accordance with Implementing Regulation (EU) 2023/736 with effect from 1 May 2023.

  6. Acceleration of the deployment of renewable energy – Regulation (EU) 2022/2577. The temporary rules came into force from 23 December 2022 for an implementation period of 18 months.
  7. Recovery and Resilience Plans – Regulation (EU) 2023/435 amends Regulation (EU) 2021/241 as regards funds for REPowerEU in the Recovery and Resilience Plans, as well as Regulations (EU) No 1303/2013, (EU) 2021/1060 and (EU) 2021/1755 and Directive 2003/87/EC. This Regulation, which entered into force on 28 February 2023, aims to improve the capacity of the Recovery and Resilience Plans to effectively address the objectives of the REPowerEU plan and to contribute to energy security, the diversification of the Union's energy supply, the increasing of the uptake of RES and energy efficiency, increasing energy storage capabilities and the required reduction in dependence on fossil fuels before 2030. It sets out specific targets and reforms to be included in Member States' existing recovery and resilience plans as part of REPowerEU special funds. In addition, the regulation provides for specific sources of funding for the relevant measures. It also offers additional funding opportunities to accelerate EU industry's transition to net-zero or low-carbon technologies and to boost investment in new production capabilities for clean technologies.

g) Net-Zero Industry Act (NZIA)

This act was originally announced by the Commission as part of the Green Deal industrial plan presented on 1 February 2023, which set out how the EU would strengthen its competitive advantage by increasing the Union's production capacity for net zero emissions technologies and products needed to meet the ambitious climate targets. As a result of this, Regulation (EU) 2024/1735 was published on 28 June 2024 concerning the establishment of a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724, with entry into force from 29 June 2024, while certain provisions shall apply at a later date.

The main measures of the act are summarized as follows:

• It establishes a benchmark for the production capacity of strategic zero-emission technologies to cover at least 40% of the EU's annual development needs by 2030. The benchmark provides predictability, certainty and long-term messages to manufacturers and investors and enables monitoring of progress. To support carbon capture and storage projects and increase the availability of CO2 storage sites in Europe, NZIA is also targeting 50 million tonnes of annual CO2 storage injection capacity in EU geological formations by 2030.

• It improves the conditions for investment in net zero emission technologies by simplifying and speeding up licensing procedures, reducing administrative burdens and facilitating access to markets. Public authorities should consider sustainability, resilience, cyber security and other qualitative criteria in clean technology procurement processes as well as auctions for RES development. Member States will be able to support a range of zero-emission technologies, such as solar, wind, heat pumps, nuclear, hydrogen, batteries and grid technologies, by establishing "strategic projects" that will benefit from priority status at national level, shorter licensing timelines and streamlined procedures.

• Energy-intensive industries, such as steel, chemicals or cement, which produce components used in net zero emission technologies and invest in decarbonization can also be supported through the measures of the act. The creation of net zero emission accelerator valleys will further facilitate the creation of cooperative formations of net zero emission industrial activity in the EU.

• It includes measures to invest in education, training and innovation by setting up net zero emission industry academies to train 100,000 workers within three years by supporting the mutual recognition of professional qualifications.

Accessibility by WAH