PC_2025_G_01 - Public consultation on inter-temporal cost allocation mechanisms for financing hydrogen infrastructure

Status
Upcoming
Open:
10.03.2025
Close:
31.03.2025
Policy area
Hydrogen
Contact information
Audience
Hydrogen network operators (HNOs), gas transmission system operators (TSOs), gas distribution system operators (DSOs), energy exchanges, energy traders, investors in hydrogen production and consumption technologies, hydrogen users, financing institutions, Member State public authorities, academics, think tanks, civil society and other interested parties.

Contact information

Overview

The EU’s Hydrogen and Decarbonised Gas Market package (2024) aims to support the development of a competitive hydrogen market and the integration of renewable gases into Europe’s energy system. To achieve this, the package extends the role of ACER to include new hydrogen-related tasks. One of these tasks, set out in the Hydrogen and Decarbonised Gas Market Regulation (EU) 2024/1789, requires ACER to issue a recommendation on the methodologies for setting the inter-temporal cost allocation by 5 August 2025 and update it at least every two years. 

What is inter-temporal cost allocation?

Developing a European hydrogen market will require significant infrastructure investment to transport hydrogen from supply sites to end users. However, funding this infrastructure through traditional regulated tariffs (fees paid by network users) can be particularly challenging in the early stages of market development, when hydrogen demand is still low. With few users to share the fees, early network users may face extremely high fees, making hydrogen less affordable and potentially discouraging further demand.

To address this issue, the Regulation on hydrogen and decarbonised gas market grants Member States the authority to allow hydrogen network operators to recover infrastructure costs over time through inter-temporal cost allocation mechanisms. These aim to ensure a fair and balanced distribution of costs between early and future hydrogen consumers, ensuring that the former are not disproportionately burdened. Once developed, these mechanisms must be approved by the respective National Regulatory Authorities (NRAs).

Why we are consulting

ACER’s recommendation will provide guidance to Transmission System Operators (TSOs), Distribution System Operators (DSOs), hydrogen network operators, and NRAs on how to develop and implement these mechanisms effectively.

To ensure its recommendation is informative and effective, ACER will be seeking input from stakeholders on key elements of these mechanisms.

Next steps

This public consultation will run from 10 to 31 March 2025.

ACER will evaluate the feedback received and use it to inform its recommendation, which is expected by 5 August 2025.