Belgian parliament adopts pioneering law on hydrogen transport

On 6 July 2023, the Belgian parliament adopted the so-called “Hydrogen Act” which aims to establish a dedicated regulatory framework for hydrogen pipeline networks ahead of the planned revision of the EU gas market legislation contained in the EU’s hydrogen and decarbonised gas market package. The legislation will enter into force within ten days following publication in Belgium’s official journal. This alert outlines the main elements of the Hydrogen Act.

Designation of a single hydrogen network operator (HNO)

One of the key features of the Hydrogen Act is the designation of a single HNO for the entire Belgian territory, to be responsible for the operation of the hydrogen transport infrastructure, the network development plans, and the commercial relations with network users.

Applications to be certified and appointed as the HNO must be submitted within 90 business days after publication of the Hydrogen Act in Belgium’s official journal.

The HNO will be designated following a procedure outlined in the Hydrogen Act, on the basis of several evaluation criteria including:

• The quality of the business plan, detailing the financial, technical, material, and human resources to be dedicated to the development of the hydrogen network subject to third party access;
• The candidate’s experience with the construction and maintenance of gas transport infrastructure, as well as its experience with (or in the absence of any prior experience, capabilities to manage) the operation of a network subject to third party access;
• The territorial coverage, location, and characteristics of the pipelines owned or to be acquired by the candidate;
• The candidate’s contribution to European and Belgian climate ambitions, including the reduction of greenhouse gas emissions; and
• The candidate’s plan to ensure the balancing and flexibility of the energy system, including all energy carriers.

The HNO will be appointed for a 20-year term, renewable five years before the end of the term.

Role of the HNO

The HNO’s responsibilities will include to:

• Operate and develop the hydrogen network in a safe, reliable, efficient, and economically responsible manner;
• Provide nondiscriminatory and open access to the hydrogen transport network at regulated tariffs (determined in line with a tariff methodology to be developed by the Belgian Federal Commission for Electricity and Gas Regulation (CREG));
• Develop a network development plan, and
• Establish and control quality standards of the hydrogen transported in the network.

The HNO will have to comply with strict (vertical and horizontal) unbundling conditions in order to guarantee its independence from network users and prevent any discrimination against certain users, as well as to prevent cross-subsidisation.

Existing networks

The Hydrogen Act provides for transitional measures to take into account existing hydrogen pipelines in Belgium. Operators of existing pipelines will be able to continue to perform their current contracts and have the possibility of applying to designate the HNO as an independent operator, subject to specific conditions.  

Subsidies

The minister of Energy will be able to allocate funds to the HNO for the development of the infrastructure within four months of receipt of the application if the following conditions are met:

• The amount requested falls under the development plan;
• The plan accounts for future growth in volume;
• The refurbishment of existing pipelines,
• There is a solid business plan; and
• The funds allocated must not exceed 50% of the total investment.

Finally, the CREG is designated as the competent regulator, with similar responsibilities as for the gas and electricity markets.

The Hydrogen Act will need to be supplemented by royal decrees and ministerial orders to allow the regulatory framework to evolve in line with the development of the hydrogen market.

How can we help?

Our sustainability experts have thorough knowledge of the regulatory framework, including on the funding schemes such as the Innovation Fund, the LIFE Programme, Important Project of Common European Interest (IPCEI), and the Connecting Europe Facility (CEF). We can provide tailored and expert advice on how to develop and obtain funding for your hydrogen project in line with these regulations.