Update: Belgian Hydrogen Transportation Law is out and applications are now open
04 Sep 2023
On the 25th July 2023, Belgium published in the Belgian Official Gazette a law on the transportation of hydrogen through pipelines.
As discussed in our previous newsflash, hydrogen has the potential to play a vital role in decarbonising for various sectors, including transportation, industry, and energy production. This new legislation reflects Belgium's commitment to fostering a hydrogen-based economy and underscores the importance of a well-regulated and efficient hydrogen transport network for achieving these goals.
Let's see how the law fits into this ambition.
Key takeaways from the new hydrogen law
In 2021, the federal government unveiled an ambitious strategy to position itself as a prominent leader in the hydrogen market. A critical point in the strategy has been a third pillar dedicated to establishing a robust hydrogen market via the development of a hydrogen transport network. This has now been translated into law, with the following key takeaways:
a. The CREG
The Commission for Electricity and Gas Regulation (hereafter “CREG”) is entrusted as the independent regulatory authority responsible for overseeing hydrogen transport. The CREG will ensure the effective implementation of the hydrogen law and also monitor compliance.
b. Authorisation to transport, use or exploit hydrogen
Any construction, use or the operation of hydrogen transport infrastructure requires authorisation. The law sets out the procedure to obtain such an authorisation. After adoption of the upcoming Ministerial Decree designating the Hydrogen Transport Network Operator (as detailed later in this newsflash), only this operator will be eligible to obtain hydrogen transmission authorisation.
c. Appointment of the network operator
The law gives an important role to the Hydrogen Transmission Network Operator (‘waterstofvervoersnetbeheerder’ in Dutch and ‘gestionnaire de réseau de transport d'hydrogène’ in French). Article 9 et seq describes the procedure on how the Hydrogen Transmission Network Operator is selected and certified.
Any company can apply within the specific deadline. The CREG assesses the candidates for conformity and confers a certificate to those who comply with these specified requirements. The CREG then delivers its opinion on the potential operators, on the basis of which the Council of Ministers takes a decision by Ministerial Decree.
The law also has six evaluation criteria, set out by law, allowing candidates to target focus areas and assess their chance of success. It lays out conditions the Hydrogen Transport Network Operator must meet for appointment, with the CREG monitoring its ongoing compliance with certification conditions. In the event of a breach of any of the certification conditions, the certification and appointment of the Hydrogen Transmission Network Operator can be revoked.
The appointment of a single transmission network operator in Belgium can be attributed to three primary reasons:
Due to the limited size of the Belgian territory, having multiple competing operators would result in a suboptimal network development.
Having a single operator ensures greater efficiency..
The centralisation guarantees a coherent vision for the growth of the hydrogen transportation network.
Belgium’s long-term goal is to develop and establish a unified and integrated hydrogen transportation network. A designated network operator will play a crucial role in achieving this objective.
d. Duties of the Hydrogen Transmission Network Operator
The appointed Hydrogen Transmission Network Operator has a number of responsibilities imposed by the law – with these as most important:
Managing, operating and developing the hydrogen transport network in a safe, reliable, efficient and economically viable manner. The operator must furthermore ensure network capacity to accommodate the gradual increase in long-term hydrogen transport demand
The periodic preparation and updating of a network development plan every two years
Providing access to the hydrogen transport network and services for all users in a non-discriminatory and transparent way. Access can only be refused on the basis of technical elements relating to the capacities and operation of this network.
e. Tariffs
Another key point is the tariffs. Connection, use and access to the hydrogen transport network will be subjected to regulated tariffs. A tariff methodology will be adopted and tariffs must be first approved by the Commission.
Basic rules are yet to be determined. The methodology will be published on the website of the Energy Commission.
f. Existing transportation routes
The law establishes a specific regime for the management of existing transportation networks. Existing operators, other than the designated Hydrogen Transport Network Operator, are allowed to continue managing their network.
However, any owner of an existing infrastructure may submit an application to appoint the Hydrogen Transport Network Operator as the independent operator of their transportation facility. The law foresees in an application procedure and delineates the rights and duties of both parties once the Hydrogen Transport Network Operator takes charge of the facility.
In short, owners of existing infrastructure may choose to continue operating their own network or request the appointment of the Hydrogen Transport Network Operator for their own network. If they decide to opt for the latter, some duties will be transferred to the Hydrogen Transport Network Operator, but owners will receive fair compensation for the use of their facility.
What’s next?
Now that the law has been published, interested candidates will have until 30 November 2023 to forward their application as the Hydrogen Transport Network Operator to the Minister of Energy.
The Commission for Energy and Gas Regulation will then have 60 workdays to make its recommendation about the candidates after application procedure is closed. Following that, the Directorate-General Energy of the FOD-SPF Economy has 15 workdays to render its own advice to the Minister of energy.
Following the two rounds of advice, the Council of Ministers has 15 workdays to adopt a Ministerial Decree appointing the Hydrogen Transmission Network Operator.
Conclusion
Belgium wants to position itself as a leader in the hydrogen market and hence adopting the hydrogen transport law is key to this.
The law establishes the need for one Hydrogen Transmission Network Operator with the responsibility to develop, manage and operate the hydrogen transport network. Interested candidates have until 30th November 2023 to submit their application to the Minister of Energy. The final decision regarding who will be the Hydrogen Transmission Network Operator is expected early to the middle part of 2024.
Hadrien Bosly
