With the adoption of the 2024 EU hydrogen and gas decarbonisation package, ACER is tasked with carrying out a periodic cost comparison assessing the efficiency of gas transmission system operators (TSOs) across the EU. 

To kickstart this work, ACER engaged a consultant to propose a methodology to benchmark the efficiency of gas TSOs. ACER has taken into account the previous (voluntary) benchmarking studies of gas TSOs, and has consulted stakeholders extensively, including an ACER public consultation, a workshop and engaged experts to conduct an independent assessment (Expert Review) of the proposed methodology.  

The consultancy study, published today, provides general guidance for ACER in designing the methodology and procedures for phase II (data collection and validation) and phase III (modelling) of the ACER efficiency comparison. Some elements of the methodology have been adapted based on the input received from third parties.

Why does the cost-efficiency of gas TSOs matter?

Ultimately, gas consumers pay the costs of natural gas transmission networks through their bill. The TSOs’ allowed revenue is set by the national regulatory authority (NRA) and is recovered from network users through network tariffs, in line with the EU-wide Network Code on Harmonised Transmission Tariff structures.

Benchmarking compares the costs of a TSO (a monopoly) to other operators in the EU. ACER’s efficiency comparison, which is mandatory for all EU TSOs, will help ensure that TSOs’ costs and the resulting tariffs across Europe are efficient. 

Why is TSO cost-comparison increasingly relevant in a decarbonised gas context?

The gas sector is evolving, with lower gas demand, the rise of renewable gases and planning for hydrogen. This may require new investment while the decreasing use of existing gas infrastructure is already driving gas network tariff increases across Member States. This ACER tool aims to provide efficiency scores in a reliable and transparent manner, reflecting different national realities and allowing for different regulatory approaches.

What’s next?

• January 2026: The second phase of the ACER efficiency comparison will start. ACER will request TSOs to submit the data that will be used for modelling in the third phase, as well as carry out a validation process to remove any reporting errors and ensure a high data quality. As part of the validation, TSOs or NRAs are expected to audit the reported data. ACER will consult with TSOs on the data that will be requested and the overall process.
• Between late Q4 2026 – early Q1/2027: The third phase will be launched to focus on the modelling of the ACER efficiency comparison. Stakeholders will be consulted on the model specifications and process in the course of 2027.
• By 5 August 2027: Completion of the first ACER efficiency comparison. Following the first publication, ACER should repeat the calculation every four years. 

Further updates will be provided along these process steps. 

ACER’s 2025 European hydrogen markets Monitoring Report looks at the latest sector developments and highlights the main regulatory and market challenges for the EU.

This year’s edition shows progress in electrolysers build-out and in advancing the EU’s regulatory framework. Yet, renewable hydrogen costs in 2024 remained four times higher than those of conventional hydrogen. This cost gap, together with incomplete national transposition of EU rules, is hindering market development. To overcome this, lower regulatory risks and more targeted funding are needed. 

What are the key findings? 

• Market growth remains insufficient to meet EU and national targets. Despite a 51% increase in electrolyser capacity to 308 MW in 2024, deployment remains way behind the 6 GW target for 2024 and 40 GW for 2030.
• Renewable hydrogen remains costly (four times higher than hydrogen from fossil fuels), with uncertain near to mid term cost reduction prospects.
• Delays in transposing EU rules at national level persist. Only 2 Member States have transposed the amended Renewable Energy Directive.
• A decarbonised electricity sector is key to renewable hydrogen. Electricity supply costs (excluding grid tariffs) may account for up to 50% of renewable hydrogen’s production costs.
• Rising electricity network tariffs may add pressure on costs. ACER’s 2024 Monitoring Report on electricity infrastructure development shows that electricity network costs could rise by 50-100% by 2050, also depending on how investments will align with evolving electricity grid demand. As electricity tariffs represent a significant share of renewable hydrogen’s production costs, this trend poses a substantial risk.
• Network development should align with evolving demand to reduce forecasted risks. Hydrogen networks are key to expanding the market, but infrastructure should be built gradually to match actual demand development.
• Low-carbon hydrogen could support market development, yet cost and technical uncertainties should be carefully assessed.
• The European Commission has already allocated over €20 billion to hydrogen through various programmes, and Member States have announced numerous additional support schemes. Accelerating the allocation of funding to advanced projects is key to increasing scale-up.

What are ACER’s recommendations?

• Accelerate the national transposition and implementation of the amended Renewable Energy Directive to ensure regulatory certainty and accelerate market development.
• Implement the (2024) Hydrogen and Gas Decarbonisation legislative package without delay to facilitate the deployment of infrastructure and a well-functioning hydrogen market.
• Prioritise and target funding towards projects in hard-to-abate sectors that are ready to transition to renewable and low-carbon hydrogen.
• Facilitate renewable hydrogen production through faster permitting and grid connection for both electrolysers and renewable electricity projects.
• Speed up decarbonisation of the power sector to lower electricity costs and enhance electrolyser utilisation.
• Enable flexibility in the electricity market, rethink electricity grid tariffs and grid incentives, as they can optimise electrolyser location and performance.
• Assess the risks of methane-based low-carbon hydrogen, including its underlying costs, infrastructure uncertainties and lock-in effects.
• Align hydrogen network development with market realities to manage market uncertainties and reduce the risk of stranded assets.

What’s next?

Register for ACER webinar: Progress in Europe’s hydrogen markets (Tuesday 9 December 2025 at 11:00 CET).

On 4 November 2025, the EU DSO Entity submitted its updated statutory documents to the European Commission and ACER. This revision follows the Hydrogen and Decarbonised Gas Market Package adopted in 2024, which extends the Entity’s membership to natural gas and hydrogen distribution system operators (DSOs). 

ACER already provided an Opinion on the previous version of the statutory documents in 2024. It will now review the updated submission and consult stakeholders before delivering its new Opinion to the Commission. 

What is the EU DSO Entity?

The EU DSO Entity was created in 2019 by the Clean Energy Package to facilitate cooperation among European electricity DSOs. The 2024 Regulation broadened the Entity’s scope to include natural gas and hydrogen DSOs, making it necessary to update and resubmit the Entity’s statutes, rules of procedure and other statutory documents to ensure fair and balanced representation of all participating operators. 

This update reflects the EU’s integrated approach to energy networks, supporting system efficiency and cooperation across transmission and distribution. ACER’s role is to ensure a fair and balanced representation across all operators considering the interests of distribution system users (e.g. generators, prosumers and consumers, aggregators, suppliers, and storage operators).

What are the next steps? 

To inform its Opinion, ACER will conduct a consultation to gather inputs from organisations representing all stakeholders, particularly distribution system users (including consumers).

The consultation will run from 21 November to 19 December 2025.

After receiving the proposal, ACER has four months to provide its Opinion to the European Commission.

This report on gas network use provides a comprehensive overview of capacity booking and usage trends in the EU, exploring how diversified supply, demand shifts and evolving capacity booking strategies are reshaping gas flows across the EU.

This monitoring report compares gas capacity use and booking data from 2021 to mid-2025 and analyses the main market shifts triggered by the energy crisis in 2022 (e.g. phase-out of Russian natural gas, increase in liquefied natural gas (LNG) imports, and lower gas demand). It also examines the impact of ending Russian gas transit via Ukraine as of 1 January 2025 on flow dynamics and capacity use across Southeast Europe.

What are the key findings? 

The EU’s integrated gas system has proven resilient to the energy crisis, reconfiguring its gas flows in response to changing supply and demand patterns. 

• Europe’s reliance on Russian gas pipeline imports has fallen from circa 40% to 6% of total imports since 2021.
• Since the end of 2021, gas flows have reversed direction at 40% of gas interconnection points across the EU, driven by the phasing out of Russian pipeline gas.
• Lower gas demand and increasing LNG’s supply reduced transit flows in some countries, leading to fewer capacity bookings and putting upward pressure on tariffs.
• Capacity bookings are adapting to new gas market conditions. Many long-term legacy contracts are expiring or have been terminated due to the Russian invasion of Ukraine. Instead shippers are now securing capacities on alternative routes through auctions underpinned by the EU-wide capacity allocation mechanism (CAM) network code.
• Lower pipeline congestion at EU level, but some supply bottlenecks persist. Infrastructure upgrades and lower gas demand have eased the peak congestion that affected Northwest Europe in 2022. Since 2024, high network use in Southeast Europe (including increased gas volumes to Ukraine in 2025 following the end of Russian gas transit), created significant congestion risks at several interconnection points in the region.

What are ACER’s recommendations?

• Transmission system operators (TSOs) should enhance transparency and coordination in gas capacity optimisation.
• National regulators should ensure a full and consistent application of the EU rules (CAM network code) without exceptions to maintain a transparent, predictable, and standardised capacity allocation process, fostering competition and integration of EU gas market.
• Future gas infrastructure investment by Member States should be targeted to solve persistent bottlenecks, align with the EU’s energy and climate goals and ensure security of supply. Regulators must ensure transparent and efficient distribution of congestion revenues to reduce and stabilise tariffs for European network users.

What are the next steps?

ACER will provide its next key developments in European gas wholesale markets report in early 2026. See the Q3 2025 monitoring report, also published this week.  

Published today, ACER’s latest report on key developments in European gas wholesale markets examines key trends in gas supply, demand and market prices during the final months of the gas summer season (July to September 2025). The analysis helps inform policies aimed at ensuring secure and competitively priced gas in the EU. 

What trends did ACER monitoring find? 

• Wholesale prices and volatility declined, marking one of the calmest periods for European gas markets in recent years. Higher gas imports, stable consumption and orderly storage filling contributed to this stability.
• Gas storage: Injections into underground storage exceeded levels of the previous two summers. European stocks reached 82% capacity, below levels at the start of the last three heating seasons, leaving EU markets more reliant on imports this winter.
• LNG imports: Liquefied natural gas (LNG) imports rose by 38% year-on-year amid high storage demand and lower Russian pipeline supply. Stable demand from other major buyers and rising global LNG production contributed to lower prices despite higher import volumes.
• EU gas market integration drove gas flows in the right direction to Central and Eastern Europe: As LNG’s share of supply grew, gas flows were redirected eastward to markets with limited or no direct LNG access, reflecting wholesale market signals (from lower- to higher-priced hubs).

ACER releases two reports assessing whether the proposed reference price methodologies for the Croatian and Finnish natural gas transmission tariffs comply with the EU Network Code on Harmonised Transmission Tariff Structures.

The reports are addressed to:

• the Croatian national regulatory authority (NRA), Hrvatska energetska regulatorna agencija (HERA); and
• the Finnish natural gas transmission system operator (TSO), Gasgrid Finland Oy (Gasgrid).

ACER finds that Croatia’s proposal makes only minor adjustments to the previous well-functioning methodology (last updated in 2019), while Finland’s proposal retains its existing approach (2020) without addressing some of ACER’s earlier recommendations.

What is proposed?

Croatia proposes to:

• Keep the current postage stamp reference price methodology, with a 60/40% split between entry and exit points.
• Phase out the current tariff discount at the Krk LNG terminal entry point to the transmission system.
• Continue recovering all transmission revenues through capacity-based tariffs.
• Pre-set tariffs for a five-year period, with different tariff levels each year.

Finland proposes to:

• Keep the current postage stamp reference price methodology at domestic exit points.
• Remain in the Finnish-Estonian-Latvian (FinEstLat) market area, applying common entry tariffs and zero tariffs at interconnection points within the area.
• Establish a commodity-based connection capacity charge to recover costs fairly from users that consume gas only during peak periods. 
• Maintain the flow-based charge.
• Apply two non-transmission tariffs: a datahub charge and the Balticconnector underutilisation fee (charged when network users cut back their planned gas flows at short notice, beyond an allowed limit, on days of congestion).

What are ACER’s key findings and recommendations? 

Croatia 

After analysing the consultation document, ACER concludes that:

• The proposed methodology meets EU requirements on transparency, avoidance of cross-subsidisation, non-discrimination, volume risk and prevention of cross-border trade distortions.
• Compliance with the requirements on cost-reflectivity cannot be fully assessed, as it is unclear how the applied economic efficiency justification parameter affects the cost-reflectivity of the allowed revenue.
• The tariff methodologies for non-transmission services (the connection service and the 24 proposed non-standard services) lack sufficient details.

ACER recommends the Croatian NRA to:

• Ensure that the economic efficiency justification parameter does not compromise the principle of cost-reflectivity.
• Clarify how non-yearly bookings are handled in tariff setting.
• Align the tariff period with the Network Code’s requirements.

Finland

After analysing the consultation document, ACER concludes that: 

• The proposed methodology meets EU requirements on non-discrimination, volume risk and prevention of cross-border trade distortions.
• It partially meets the transparency requirements.
• Compliance with the requirements on cost-reflectivity and avoidance of cross-subsidisation cannot be fully assessed, mainly due to a lack of clarity on the effects of the market merger.
• The proposed connection capacity charge does not meet commodity charge criteria due to multiple factors, including its partial application to non-system user entities (e.g. distribution operators and their end-users).

ACER recommends the Finnish TSO to:

• Reconsider the new connection capacity charge to ensure it meets commodity charge criteria.
• Categorise the Balticconnector underutilisation fee as a balancing service, since it falls within the scope of the Network Code on Gas Balancing.

What are the next steps?

ACER encourages the Croatian NRA and the Finnish TSO to take these recommendations into account before adopting the final tariff methodologies.

See all ACER reports on national tariff consultation documents. 

ACER publishes today its first Recommendation on inter-temporal cost allocation mechanisms for financing hydrogen infrastructure. To ensure the recommendation is well-informed, ACER conducted a public consultation on the topic in spring 2025. 

What is inter-temporal cost allocation and why an ACER recommendation?

The EU aims to build a cost-effective hydrogen network to meet its climate goals. However, high infrastructure costs and demand uncertainty pose significant investment challenges, especially in the early stages of market development.

To address this issue, the EU Hydrogen and Decarbonised Gases Regulation (2024) grants Member States the authority to allow hydrogen network operators to recover infrastructure costs gradually over time through inter-temporal cost allocation mechanisms. These aim to ensure a fair and balanced distribution of costs between early and future consumers, ensuring that the former are not disproportionately burdened.

The regulation also assigns new hydrogen-related tasks to ACER, including issuing a recommendation to guide the development and implementation of inter-temporal cost allocation mechanisms. ACER’s Recommendation provides practical advice to support the rollout of hydrogen networks and ensure fair cost-sharing over the long term. 

What does ACER recommend? 

ACER’s Recommendation identifies key investment risks in hydrogen infrastructure and suggests ways to address them. It offers high-level guidance on designing fair and effective inter-temporal cost allocation mechanisms to support the development of the hydrogen market. ACER also highlights the need for Member States to promptly establish clear hydrogen regulatory frameworks and develop flexible national rules to accommodate the future EU-wide hydrogen network codes.

Given the early stage of the hydrogen market and the lack of established best practices, ACER does not yet propose a single, standardised EU-wide approach. Instead, it calls for:

• Regulatory authorities to:
  • ensure that inter-temporal cost allocation mechanisms and national market rules are developed in a coordinated manner;
  • strengthen cross-border coordination to avoid market fragmentation in the initial stage of the hydrogen market; and
  • establish clear and robust mechanisms that guarantee full cost recovery and fair cost distribution over time to support market growth.
• Network operators and planning bodies to:
  • ensure hydrogen network development is based on transparent, data-driven and realistic assumptions.

What are the next steps? 

ACER will review and update its Recommendation at least every two years, incorporating more refined guidance as the market evolves. The next publication is planned for 2027.

Today, ACER publishes its fifth report on cross-border cost allocation (CBCA) decisions for electricity and gas infrastructure projects.

Covering 50 decisions made between 2014 and 2024, the report provides insights into how these decisions, issued by national regulators, determine the cost distribution of major cross-border projects and support project development.

How cross-border cost allocation works

Cross-border cost allocation is a mechanism designed to fairly distribute the investment costs of projects of common interest (PCIs) and projects of mutual interest (PMIs) among the countries involved. It aims to support project implementation, especially in cases where some countries would otherwise bear significantly higher costs than the benefits the project provides.

Project promoters submit investment requests to national regulatory authorities, who review them and issue CBCA decisions to determine how project costs should be shared among involved countries. This cost-sharing arrangement is required for projects to receive financial support through the Connecting Europe Facility (CEF), a major funding programme that supports the development of strategic infrastructure across Europe. 

ACER monitors all submitted investment requests and decisions taken by national regulators and regularly reports on emerging trends.  

What trends did ACER monitoring find? 

ACER’s report shows:

• Fewer decisions overall: The number of CBCA decisions fell by around 65% in the second half of the monitoring period (2019-2024). This reflects a drop in the number of PCIs included in the EU project lists, partly due to completion of major energy infrastructure projects, but also the phase-out of natural gas and Brexit, which made several projects ineligible for inclusion in the PCI lists.
• Costs stay national in most cases: Member States usually agree to cover their own costs, as each one benefits sufficiently from the project.
• Connecting Europe Facility (CEF) is the key driver: Access to grants, not the need to share costs, is the main reason project promoters submit investment requests. 
• No CBCA decisions yet for hydrogen: The sector is still in an early stage of development, but with hydrogen projects becoming eligible for inclusion in the PCI and PMI lists since 2023, CBCA decisions are expected in the coming years.

ACER’s 2025 retail energy country sheets offer a concise overview of the national electricity and gas markets across EU Member States and Norway. For the first time, the country sheets cover both sectors, presenting: 

• market and competition metrics for electricity and gas; 
• consumer trends (including contract types, contract switching rates and bill breakdown); 
• progress towards enabling more flexible consumers (through smart meter roll-out, prosumer participation, deployment of electric vehicles and heat pumps, and biomethane production); and
• a high-level assessment highlighting each market’s strengths, weaknesses, opportunities and threats (SWOT analysis). 

ACER has also updated its retail pricing dashboard, which shows monthly changes in household energy prices across EU Member States and Norway from January 2019 to June 2025.

What are the main findings in retail markets?

Electricity market

• Smart meters, a key enabler for demand-side flexibility, are largely in place across the EU, but roll-out levels vary among EU Member States and Norway. In half of EU Member States, deployment has reached 80%, while in 7, deployment remains below 20% (or no data was provided). 
• Although 2024 saw an increased number of hours with low wholesale electricity prices (below €5/MWh), fixed price and/or regulated contracts still dominate in 15 Member States at the household level. This widespread uptake limits consumers’ exposure to real-time price signals, preventing cost savings and hindering more innovative and flexible contracts. The limited adoption of dynamic-price contracts suggests that demand-side flexibility potential remains untapped.
• In 21 Member States, prosumers account for between 1% and 10% of households. The highest shares are observed in Belgium (22%) and the Netherlands (30%). 

Gas market

• 82% of residential energy consumption is used for space and water heating, underlining the importance of energy efficiency and building renovation strategies to support decarbonisation.
• A decline in gas demand has been recorded in 21 Member States since 2022, while biomethane production remains relatively low.

Market structure

• Both electricity and gas retail markets show moderate to high concentration across the EU, meaning a small number of suppliers hold a large share of the national market. 
• 20 Member States either recorded low switching rates (below 10%) or did not provide data, indicating limited competition or low consumer engagement.

The country sheets complement ACER’s retail Monitoring Report (coming in November).

Retail prices: Latest trends from ACER’s dashboard 

ACER’s retail pricing dashboard highlights the main trends in household electricity and gas prices. 

• Electricity prices across Europe stabilised by June 2025, ending the decline observed since early spring. Spain and Portugal recorded the sharpest monthly rises (+7% and +6%, respectively), followed by more moderate increases in Greece, the Netherlands, Italy and Austria. In contrast, prices declined in Norway (-7%), Estonia (-3%), and in Belgium, Latvia, Sweden and Lithuania (-2%). Most other countries recorded no change. On an annual basis, EU household electricity prices rose by approximately 3%.

• Retail gas prices also remained largely stable, with minor monthly changes: Belgium and Portugal registered small increases (+1%), while Italy recorded the largest decrease (-4%), followed by France and Latvia (-2%), and the Netherlands, Estonia and Austria (-1%). While retail gas prices remained unchanged month-on-month in most Member States, retail offers were approximately 7% higher than those available during the same period last year. 

What are the main trends in wholesale gas markets? Prices remained elevated year-on-year but showed little monthly change, despite volatility driven by global trade and security shocks. More information is available in ACER’s monitoring report on key developments in gas wholesale markets report, published today.

Published today, ACER’s latest report on key developments in European gas wholesale markets (Q2 2025) examines key trends in prices, supply and storage during the early months of the gas summer season. The analysis supports policy discussions on enhancing secure and competitively priced gas in Europe.

What trends did ACER monitoring find? 

• Gas wholesale prices and volatility: Average wholesale gas prices fell by over 20% compared to Q1 2025, following a high-price winter. Price volatility eased, but remained relatively high, while regional price differences widened.
• LNG imports: Liquefied natural gas (LNG) imports rose by more than a third year-on-year, supported by competitive hub prices, slack demand in Asia and expanded US liquefaction capacity.
• Pipeline imports: No major changes were observed except for Russian supply to the EU, which dropped by 45% year-on-year following the expiry of transit contracts via Ukraine. Deliveries now reach the EU only through the TurkStream pipeline.
• Gas storage: Gas injections increased by 75 TWh year-on-year, helping to reduce the gap in storage levels compared to previous years. This follows a relatively tight end-of-winter, when stocks were lower than in 2023 and 2024. 

Looking ahead

If current LNG inflows and storage injection levels continue, Europe is likely to enter winter with healthy reserves. Still, risks remain: extreme weather, disruptions to major supply sources, or geopolitical instability could alter the trajectory. On the supply side, the expected expansion of global LNG production in late 2025 and 2026 may help ease pressure.