The Commission, in its communication of 11 December 2019 entitled ‘The European Green Deal’ (the ‘European Green Deal’), set out a new growth strategy that aims to transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy, where the climate neutrality objective is met by 2050 at the latest and where economic growth is decoupled from resource use. In its communication of 17 September 2020 entitled ‘Stepping up Europe’s 2030 climate ambition – Investing in a climate-neutral future for the benefit of our people’, the Commission proposed to increase the greenhouse gas emissions reduction target to at least 55 % by 2030. That ambition was endorsed by the European Council on 11 December 2020 and the impact assessment accompanying that communication confirms that the energy mix of the future will be very different from the one of today and underpins the necessity to review and if necessary to revise the energy legislation. The current energy infrastructure investments are clearly insufficient to transform and build the energy infrastructure of the future. That also means infrastructure needs to be in place to support the European energy transition, including rapid electrification, scaling up of renewable and fossil fuel free electricity generation, the increased use of renewable and low-carbon gases, energy system integration and a higher uptake of innovative solutions.
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The current binding Union level target for renewable energy for 2030 of at least 32 % of final energy consumption and a headline Union level target for energy efficiency of at least 32,5 % will be revised as part of the Union’s enhanced ambition enshrined in the Regulation (EU) 2021/1119 of the European Parliament and the Council (4) and the European Green Deal.
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The Paris Agreement adopted under the United Nations Framework Convention on Climate Change (5) (the ‘Paris Agreement’) sets out a long-term goal to hold the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1,5 °C above pre-industrial levels, and stresses the importance of adapting to the adverse impacts of climate change and making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. On 12 December 2019, the European Council endorsed the objective of achieving a climate-neutral European Union by 2050, in line with the objectives of the Paris Agreement.
(4)
Regulation (EU) No 347/2013 of the European Parliament and of the Council (6) lays down guidelines for the timely development and interoperability of priority corridors and areas of trans-European energy infrastructure in order to achieve the energy policy objectives of the Treaty on the Functioning of the European Union (TFEU) to ensure the functioning of the internal energy market, security of supply and competitive energy markets in the Union, to promote energy efficiency and energy saving and the development of new and renewable forms of energy, and to promote the interconnection of energy networks. Regulation (EU) No 347/2013 puts in place a framework for Member States and relevant stakeholders to work together in a regional setting to develop better-connected energy networks with the aim to connect regions currently isolated from European energy markets, strengthen existing and promote new cross-border interconnections, and help integrate renewable energy. By pursuing those objectives, Regulation (EU) No 347/2013 contributes to smart, sustainable and inclusive growth and brings benefits to the entire Union in terms of competitiveness and economic, social and territorial cohesion.
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The evaluation of Regulation (EU) No 347/2013 has clearly shown that the framework has effectively improved the integration of Member States’ networks, stimulated energy trade and hence contributed to the competitiveness of the Union. Projects of common interest in electricity and gas have strongly contributed to security of supply. For gas, the infrastructure is now better connected and supply resilience has improved substantially since 2013. Regional cooperation in regional groups and through cross-border cost allocation is an important enabler for project implementation. However, in many cases the cross-border cost allocation did not result in reducing the financing gap of the projects, as intended. While the majority of permitting procedures have been shortened, in some cases the process is still long. The financial assistance from the Connecting Europe Facility, established by Regulation (EU) No 1316/2013 of the European Parliament and of the Council (7), has been an important factor as grants for studies have helped projects to reduce risks in the early stages of development, while grants for works have supported projects addressing key bottlenecks that market finance could not sufficiently address.
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In its resolution of 10 July 2020 on the revision of the guidelines for trans-European energy infrastructure (8), the European Parliament called for a revision of Regulation (EU) No 347/2013, taking into account, in particular, the Union’s 2030 targets for energy and climate and its 2050 climate neutrality objectives and the energy efficiency first principle.
(7)
The trans-European energy networks policy is a central instrument in the development of an internal energy market and necessary to achieve the objectives of the European Green Deal. To achieve higher levels of greenhouse gas emission reductions by 2030 and climate neutrality by 2050 at the latest, Europe will need a more integrated energy system, relying on higher levels of electrification based on additional renewable and low-carbon sources and the decarbonisation of the gas sector. The trans-European energy networks policy can ensure that the Union energy infrastructure development supports the required energy transition to climate neutrality in line with the energy efficiency first principle and technological neutrality while considering the potential for emission reduction in the end use. It can also ensure interconnections, energy security, market and system integration, and competition that benefits all Member States, as well as energy at an affordable price for households and undertakings.
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While the objectives of Regulation (EU) No 347/2013 remain largely valid, the current trans-European energy networks framework does not yet fully reflect the expected changes to the energy system that will result from the new political context and in particular the upgraded Union 2030 targets for energy and climate and the 2050 climate neutrality objective under the European Green Deal. Therefore, among other aspects, both climate mitigation and climate adaptation objectives need to be adequately reflected in the revised trans-European energy networks framework. Besides the new political context and objectives, technological development has been rapid in the past decade. That development should be taken into account in the energy infrastructure categories covered by this Regulation, the selection criteria for projects of common interest as well as the priority corridors and areas. At the same time, the provisions of this Regulation should not affect a Member State’s right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply, in accordance with Article 194 TFEU.
(9)
Directives 2009/73/EC (9) and (EU) 2019/944 (10) of the European Parliament and of the Council provide for an internal market for energy. While there has been very significant progress in the completion of that market, there is still room for improvement by better utilising existing energy infrastructure, integrating the increasing amounts of renewable energy, and system integration.
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The Union’s energy infrastructure should be upgraded in order to prevent technical failure and to increase its resilience against such failure, natural or man-made disasters, adverse effects of climate change and threats to its security, in particular as regards European critical infrastructures pursuant to Council Directive 2008/114/EC (11).
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The Union’s energy infrastructure should be resilient to the unavoidable impacts that climate change is expected to create in Europe in spite of the mitigation efforts. Hence, strengthening the efforts on climate adaptation and mitigation, resilience building, disaster prevention and preparedness is crucial.
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The development of trans-European energy infrastructure should take into account, where technically possible and most efficient, the possibility of repurposing existing infrastructure and equipment.
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Security of supply, as a main driver behind the adoption of Regulation (EU) No 347/2013, has been significantly improved through projects of common interest. Moreover, the Commission’s impact assessment accompanying the Commission communication of 17 September 2020 entitled ‘Stepping up Europe’s 2030 climate ambition –Investing in a climate-neutral future for the benefit of our people’ expects the consumption of natural gas to be reduced significantly because its non-abated use is not compatible with carbon neutrality. On the other hand, the consumption of biogas, renewable and low-carbon hydrogen and synthetic gaseous fuels is expected to increase significantly towards 2050. For gas, the infrastructure is now better connected and supply resilience has improved substantially since 2013. The planning of energy infrastructure should reflect this changing gas landscape. However, not all Member States are yet connected sufficiently to the European gas network and island Member States in particular continue to face significant challenges in terms of security of supply and energy isolation. Although 78 % of gas projects that are projects of common interest are expected to be commissioned by the end of 2025, a number of them are experiencing significant delays, including due to permitting problems. This Regulation should therefore not negatively affect projects of common interest that have not yet been completed on the date of its entry into force. Therefore, projects of common interest included in the fifth Union list of projects of common interest established pursuant to Regulation (EU) No 347/2013, for which an application file has been accepted for examination by the competent authority should be able to maintain their rights and obligations as regards permitting for a period of four years after the date of entry into force of this Regulation.
(14)
The importance of smart electricity grids, which do not always include the crossing of a physical border, in achieving the Union’s energy and climate policy objectives was acknowledged in the Commission communication of 8 July 2020 entitled ‘Powering a climate-neutral economy: An EU Strategy for Energy System Integration’ (the ‘EU Strategy for Energy System Integration’). The criteria for that category should be simplified, should include technological developments regarding innovation and digital aspects and should enable energy system integration. Furthermore, the role of projects promoters should be clarified. Given the expected significant increase in power demand from the transport sector, in particular for electric vehicles along highways and in urban areas, smart grid technologies should also help to improve energy network related support for cross-border, high-capacity recharging to support the decarbonisation of the transport sector.
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The EU Strategy for Energy System Integration also underlined the need for integrated energy infrastructure planning across energy carriers, infrastructures, and consumption sectors. Such system integration starts from the point of departure of applying the energy efficiency first principle and taking a holistic approach in policy and beyond individual sectors. It also addresses the decarbonisation needs of the hard to abate sectors, such as parts of industry or certain modes of transport, where direct electrification is, currently, technically or economically challenging. Such investments include hydrogen and electrolysers, which are progressing towards commercial large-scale deployment. The Commission communication of 8 July 2020 entitled ‘A hydrogen strategy for a climate-neutral Europe’ (the ‘Hydrogen Strategy’) gives priority to hydrogen production from renewable electricity, which is the cleanest solution and is most compatible with the Union’s climate neutrality objective. In a transitional phase however, other forms of low-carbon hydrogen are needed to more rapidly decarbonise existing hydrogen production, focusing on a diverse range of clean technologies, and to kick-start an economy of scale.
(16)
Moreover, in its Hydrogen Strategy the Commission concluded that, for the required deployment of hydrogen, a large-scale infrastructure network is an important element that only the Union and the internal market can offer. There is currently very limited dedicated infrastructure in place to transport and trade hydrogen across borders or to create hydrogen valleys. Such infrastructure should consist of a significant extent of assets converted from natural gas assets, complemented by new assets dedicated to hydrogen. Furthermore, the Hydrogen Strategy set a strategic goal to increase installed electrolyser capacity to 40 Gigawatts (GW) by 2030 in order to scale up the production of renewable hydrogen and facilitate the decarbonisation of fossil-fuel dependent sectors, such as industry or transport. Therefore, the trans-European energy networks policy should include new and repurposed hydrogen transmission infrastructure and storage as well as electrolyser facilities. Hydrogen transmission and storage infrastructure should also be included in the Union-wide ten-year network development plan so as to allow a comprehensive and consistent assessment of their costs and benefits for the energy system, including their contribution to sector integration and decarbonisation, with the aim of creating a hydrogen backbone for the Union.
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Moreover, a new infrastructure category should be created for smart gas grids to support investments which integrate a plurality of low-carbon and particularly renewable gases such as biogas, biomethane, and hydrogen, in the gas network and help manage a resulting more complex system, building on innovative digital technologies.
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Achieving climate neutrality by 2050 at the latest assumes that there will still be industrial processes that emit carbon dioxide. Such carbon dioxide is considered to be unavoidable when its production cannot be avoided despite optimisation, for example through energy efficiency or electrification integrating renewables. The development of carbon dioxide infrastructure should lead to a significant net reduction of otherwise unavoidable emissions in the absence of reasonable alternatives. Carbon dioxide capture is covered by Directive 2010/75/EU of the European Parliament and of the Council (12) for the purpose of carbon dioxide streams originating from the installations covered by that Directive, and for the purpose of geological storage pursuant to Directive 2009/31/EC of the European Parliament and of the Council (13).
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Regulation (EU) No 347/2013 required a candidate project of common interest to prove a significant contribution to at least one criterion from a set of criteria in the process for the elaboration of the Union list of projects of common interest, which could have, but did not need to, include sustainability. That requirement, in line with the specific needs of the internal energy market at the time, enabled development of projects of common interest which addressed only security of supply risks even if they did not demonstrate benefits in terms of sustainability. However, given the evolution of the Union’s infrastructure needs, the decarbonisation goals and the European Council conclusions adopted on 21 July 2020, according to which Union expenditure should be consistent with Paris Agreement objectives and the ‘do no harm’ principle of the European Green Deal, sustainability in terms of the integration of renewable energy sources into the grid or the reduction of greenhouse gas emissions, as relevant, should be assessed in order to ensure that trans-European energy networks policy is coherent with the Union’s targets for energy and climate and 2050 climate neutrality objectives, taking into account the specificities of each Member State in reaching the climate neutrality objective. The sustainability of carbon dioxide transport networks is addressed by total expected project life-cycle greenhouse gas reductions and the absence of alternative technological solutions to achieve the same level of carbon dioxide reduction.
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The Union should facilitate infrastructure projects linking the Union’s networks with third-country networks that are mutually beneficial and necessary for the energy transition and the achievement of the climate targets, and which also meet the specific criteria of the relevant infrastructure categories pursuant to this Regulation, in particular with neighbouring countries and with countries with which the Union has established specific energy cooperation. Therefore, this Regulation should include in its scope projects of mutual interest where they are sustainable and able to demonstrate significant net socioeconomic benefits at Union level and at least one third country. Such projects should be eligible for inclusion in the Union list of projects of common interest and projects of mutual interest (the ‘Union list’) provided that the policy framework has a high level of convergence and is supported by enforcement mechanisms, and should demonstrate a contribution to the Union’s and the third countries’ overall energy and climate policy objectives in terms of security of supply and decarbonisation.
A high level of convergence of the policy framework should be presumed for the European Economic Area or Energy Community Contracting Parties or can be demonstrated in the case of other third countries through bilateral agreements that include relevant provisions on climate and energy policy objectives on decarbonisation and further assessed by the appropriate regional group with the support of the Commission. In addition, the third country with which the Union cooperates in the development of projects of mutual interest should facilitate a similar timeline for accelerated implementation and other policy support measures, as provided for in this Regulation. Therefore, projects of mutual interest should be treated in the same manner as projects of common interest, with all provisions relative to projects of common interest applying also to projects of mutual interest, unless otherwise specified. Significant net socioeconomic benefits at Union level should be understood as improving interoperability and the functioning of the internal market, going beyond one Member State. As regards projects for storage of carbon dioxide, only projects necessary to allow the cross-border transport and storage of carbon dioxide should be eligible, provided that standards and safeguards preventing any leaks and concerning climate, human health and ecosystems as regards the safety and effectiveness of the permanent storage of carbon dioxide are at least at the same level as in the Union. It should be presumed that the European Economic Area meets those standards and safeguards.
(21)
Projects of mutual interest should be considered to be an additional tool to expand the scope of this Regulation to third countries beyond those projects of common interest that contribute to implementing an energy infrastructure priority corridor or area as set out in Annex I. Therefore, where a project with a third country contributes to implementing an energy infrastructure priority corridor or area, it should be eligible to apply for the status of a project of common interest under this Regulation. By the same principle, electricity interconnection projects with third countries that had attained the status of project of common interest under Regulation (EU) No 347/2013 may be selected as projects of common interest, provided that they undergo the selection process and that they fulfil the criteria for projects of common interest.
(22)
Furthermore, to achieve the Union’s 2030 targets for energy and climate and its 2050 climate neutrality objective, the Union needs to significantly scale up renewable electricity generation. The existing energy infrastructure categories for electricity transmission and storage are crucial for the integration of the significant increase in renewable electricity generation in the power grid. In addition, that requires stepping up investment in offshore renewable energy with the aim of reaching at least 300 GW of offshore wind generation installed in line with the Commission’s offshore renewable energy strategy set out in the Commission communication of 19 November 2020 entitled ‘An EU Strategy to harness the potential of offshore renewable energy for a climate neutral future’. That strategy includes radial links connecting new offshore wind capacities, as well as hybrid integrated projects. Coordinating long-term planning and development of offshore and onshore electricity grids should also be addressed. In particular, offshore infrastructure planning should move away from the project-by-project approach towards a coordinated comprehensive approach ensuring the sustainable development of integrated offshore grids in line with the offshore renewable potential of each sea basin, environmental protection and other uses of the sea. There should be an approach based on voluntary cooperation between Member States. Member States should remain responsible for approving the projects of common interest which are related to their territory and the related costs.
(23)
Relevant Member States should be able to assess the benefits and costs of the priority offshore grid corridors for renewable energy and carry out a preliminary cost-sharing analysis at priority offshore grid corridor level to underpin joint political commitments for offshore renewable energy development. The Commission, together with the Member States and the relevant transmission system operators (TSOs) and national regulatory authorities, should develop guidance for a specific cost-benefit and cost-sharing for the deployment of the integrated offshore network development plans which should enable Member States to carry out an adequate assessment.
(24)
The Union-wide ten-year network development plan process as basis for the identification of projects of common interest in the categories of electricity and gas has proven to be effective. However, while the European Network of Transmission System Operators for Electricity (the ‘ENTSO for Electricity’), the European Network of Transmission System Operators for Gas (the ‘ENTSO for Gas’) and TSOs have an important role to play in the process, more scrutiny is required, in particular as regards defining the scenarios for the future, identifying long-term infrastructure gaps and bottlenecks and assessing individual projects, to enhance trust in the process. Therefore, due to the need for independent validation, the Agency for the Cooperation of Energy Regulators (the ‘Agency’) and the Commission should have an increased role in the process, including in the process for drawing up the Union-wide ten-year network development plans pursuant to Regulations (EC) No 715/2009 (14) and (EU) 2019/943 (15) of the European Parliament and of the Council. The Union-wide ten-year network development plan process should benefit from the objective, science-based input from an independent scientific body such as the European Scientific Advisory Board on Climate Change and should be organised in the most effective manner.
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In carrying out their tasks preceding the adoption of the Union-wide ten-year network development plans, the ENTSO for Electricity and ENTSO for Gas should conduct an extensive consultation process involving all relevant stakeholders. The consultation should be open and transparent and should be organised in a timely manner to allow for stakeholders’ feedback in the preparation of key phases of the Union-wide ten-year network development plans, such as the scenario development, infrastructure gaps identification and the cost-benefit analysis methodology for project assessment. The ENTSO for Electricity and the ENTSO for Gas should give due consideration to the input received from stakeholders during consultations and should explain how they took that input into account.
(26)
In line with the conclusions of the 2020 Energy Infrastructure Forum, it is necessary to ensure that all relevant sectors, such as gas, electricity, and transport, are considered in an integrated perspective in the planning processes of all onshore and offshore, transmission and distribution infrastructure. In order to comply with the Paris Agreement and to achieve the Union’s 2030 climate objectives, the 2040 offshore energy development objectives, and in line with the Union’s objective to achieve climate neutrality by 2050 at the latest, trans-European energy networks framework should rely on a smarter, more integrated, long-term and optimised ‘one energy system’ view through deployment of a framework that enables greater coordination of infrastructure planning across various sectors and creates an opportunity to optimally integrate various coupling solutions involving various network elements between various infrastructures. This should be secured by developing a progressively integrated model that enables consistency between single-sector methodologies based on common assumptions and reflects interdependencies.
(27)
It is important to ensure that only infrastructure projects for which no reasonable alternative solutions exist may receive the status of project of common interest. To that end, the energy efficiency first principle should be taken into account in the infrastructure gaps identification report developed in line with this Regulation and the work of the regional groups in establishing the regional lists of proposed projects. In line with the energy efficiency first principle, all relevant alternatives to new infrastructure for ensuring future infrastructure needs, that could contribute to addressing the infrastructure gap identification, should be considered.
The regional groups, assisted by the national regulatory authorities, should consider the assumptions and outcomes of the infrastructure gaps assessment developed in line with this Regulation and ensure that the energy efficiency first principle is fully reflected in the selection process for projects of common interest. In addition, during project implementation, project promoters should report on the compliance with environmental legislation and demonstrate that projects do ‘no significant harm’ to the environment within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council (16). For existing projects of common interest having reached sufficient maturity, this will be taken into account during project selection for subsequent Union list by the regional groups.
(28)
To ensure voltage and frequency stability, particular attention should be given to the stability of the European electricity network under the changing conditions, especially in view of the growing share of flexibility options, such as sustainable energy storage, and renewable electricity. Efforts to maintain and ensure a satisfactory level of planned low-carbon energy production, in order to ensure security of supply for citizens and businesses, should be given particular priority.
(29)
Following close consultations with all Member States and stakeholders, the Commission has identified 14 trans-European energy infrastructure priorities, the implementation of which is essential for the achievement of the Union’s 2030 targets for energy and climate and its 2050 climate neutrality objective. Those priorities cover various geographic regions or thematic areas in the field of electricity transmission and storage, offshore grids for renewable energy, hydrogen transmission and storage, electrolysers, smart gas grids, smart electricity grids, and the transport and storage of carbon dioxide.
(30)
Projects of common interest should comply with common, transparent and objective criteria in view of their contribution to the energy policy objectives. In order to be eligible for inclusion in the Union lists, electricity, and hydrogen projects should be part of the latest available Union-wide ten-year network development plan. As hydrogen infrastructure is not currently included in the Union-wide ten-year network development plan, that requirement for hydrogen projects should apply only from 1 January 2024 for the purposes of the second Union list that will be established pursuant to this Regulation.
(31)
Regional groups should be established for the purpose of proposing and reviewing projects of common interest, leading to the establishment of regional lists of projects of common interest. In order to ensure broad consensus, those regional groups should ensure close cooperation between Member States, national regulatory authorities, project promoters and relevant stakeholders. In the context of that cooperation, national regulatory authorities should, where necessary, advise the regional groups, inter alia, on the feasibility of the regulatory aspects of proposed projects and on the feasibility of the proposed timetable for regulatory approval.
(32)
In order to increase the efficiency of the process, cooperation between the regional groups should be strengthened and further encouraged. It is necessary that the Commission play an important role in facilitating that cooperation with a view to addressing the possible impact of projects on other regional groups.
(33)
A new Union list should be established every two years. Projects of common interest that have been completed or that no longer fulfil the relevant criteria and requirements as set out in this Regulation should not appear on the following Union list. For that reason, existing projects of common interest that are to be included in the following Union list should be subject to the same selection process for the establishment of regional lists and for the establishment of the Union list applied to proposed projects. However, the administrative burden should be reduced to the extent possible, for example by using information submitted previously and by taking account of the annual reports of the project promoters. To that end, existing projects of common interest that have made significant progress should benefit from a streamlined inclusion process in the Union-wide ten-year network development plan.
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Projects of common interest should be implemented as quickly as possible and should be closely monitored and evaluated, while duly observing the requirements for stakeholder participation and environmental legislation and keeping the administrative burden for project promoters to a minimum. The Commission should nominate European coordinators for projects facing particular difficulties or delays. The progress in the implementation of the specific projects as well as the fulfilment of the obligations pertaining to this Regulation should be taken into account in the selection process for subsequent Union lists for those projects.
(35)
The permit granting process should neither lead to administrative burdens which are disproportionate to the size or complexity of a project, nor create barriers to the development of the trans-European networks and market access.
(36)
The planning and implementation of Union projects of common interest in the areas of energy, transport and telecommunication infrastructure should be coordinated to generate synergies where it is feasible from an overall economic, technical, environmental, climate or spatial planning point of view and with due regard to the relevant safety aspects. Thus, during the planning of the various European networks, it should be possible to give preference to integrating transport, communication and energy networks in order to ensure that as little land as possible is taken up. A common vision of the networks is necessary for energy system integration in the various sectors, whilst ensuring, where possible, that existing or disused routes are reused, in order to reduce to a minimum any negative social, economic, environmental, climate and financial impact.
(37)
Projects of common interest should be given priority status at national level to ensure rapid administrative treatment and urgent treatment in all judicial and dispute resolution procedures relating to them. They should be considered by competent authorities as being in the public interest. For reasons of overriding public interest, projects which have an adverse impact on the environment should be authorised where all the conditions set out in Directive 2000/60/EC of the European Parliament and of the Council (17) and Council Directive 92/43/EEC (18) are met.
(38)
It is essential that stakeholders, including civil society, be provided with information and be consulted, in order to ensure the success of projects and to limit objections to them.
(39)
In order to reduce complexity, increase efficiency and transparency, and help enhance cooperation among Member States, there should be a competent authority or authorities integrating or coordinating all permit granting processes.
(40)
In order to simplify and expedite the permit granting process for offshore grids for renewable energy, unique points of contact should be designated for cross-border offshore projects on the Union list reducing administrative burden for project developers. The unique points of contact should reduce complexity, increase efficiency and speed up the permit granting process for offshore transmission assets often crossing many jurisdictions.
(41)
Despite the existence of established standards ensuring the participation of the public in environmental decision-making procedures, which apply fully to projects of common interest, additional measures are still required under this Regulation to ensure the highest possible standards of transparency and public participation in all relevant issues in the permit granting process for projects of common interest. Where already covered by national rules under the same or higher standards as in this Regulation, the pre-consultation ahead of the permitting procedure should become optional and avoid duplication of legal requirements.
(42)
The correct and coordinated implementation of Directives 2001/42/EC (19) and 2011/92/EU (20) of the European Parliament and of the Council and where applicable, of the United Nations Economic Commission for Europe Convention on access to information, public participation in decision-making and access to justice in environmental matters (21), signed in Aarhus on 25 June 1998 (the ‘Aarhus Convention’), and of the Convention on environmental impact assessment in a transboundary context (22), signed in Espoo on 25 February 1991 (the ‘Espoo Convention’), should ensure the harmonisation of the main principles for the assessment of environmental and climate effects, including in a cross-border context. The Commission has issued guidance to support Member States in defining adequate legislative and non-legislative measures to streamline the environmental assessment procedures for energy infrastructure and to ensure the coherent application of environmental assessment procedures required under Union law for projects of common interest. Member States should coordinate their assessments of projects of common interest, and provide for joint assessments, where possible. Member States should be encouraged to exchange best practice and administrative capacity-building in the permit granting processes.
(43)
It is important to streamline and improve the permit granting process, while respecting, to the extent possible and with due regard to the principle of subsidiarity, national competences and procedures for the construction of new energy infrastructure. Given the urgency of developing energy infrastructures, the simplification of the permit granting process should set a clear time limit for the decision of the relevant authorities regarding the construction of the project. That time limit should stimulate a more efficient definition and handling of procedures, and should under no circumstances compromise the high standards for the protection of the environment in line with environmental legislation and public participation. This Regulation should establish maximum time limits. However, Member States can strive to achieve shorter time limits where feasible and, in particular, as regards projects such as smart grids, which may not require as complex a permitting process as that for transmission infrastructure. The competent authorities should be responsible for ensuring compliance with the time limits.
(44)
Member States should be able to include in comprehensive decisions, where appropriate, decisions taken in the context of negotiations with individual landowners to grant access to, ownership of, or a right to occupy, property in the context of spatial planning, which determines the general land use of a defined region, including other developments such as highways, railways, buildings and nature protection areas and which is not undertaken for the specific purpose of the planned project and granting of operational permits. In the context of the permit granting process, a project of common interest should be able to include related infrastructure to the extent that it is essential for the construction or functioning of the project. This Regulation, in particular the provisions on permit granting, public participation and the implementation of projects of common interest, should apply without prejudice to Union and international law, including provisions to protect the environment and human health, and provisions adopted under the Common Fisheries Policy and Integrated Maritime Policy, in particular Directive 2014/89/EU of the European Parliament and of the Council (23).
(45)
The costs of the development, construction, operation and maintenance of projects of common interest should in general be borne fully by the users of the infrastructure. The cost allocation should ensure that end-users are not disproportionately burdened, especially if that could lead to energy poverty. Projects of common interest should be eligible for cross-border cost allocation where an assessment of market demand, or of the expected effects on tariffs, indicates that costs cannot be expected to be recovered by the tariffs paid by the infrastructure users.
(46)
The discussion of the appropriate allocation of costs should be based on the analysis of the costs and benefits of an infrastructure project carried out on the basis of a harmonised methodology for energy-system-wide analysis, using all relevant scenarios established in the framework of the Union-wide ten-year network development plans prepared pursuant to Regulations (EC) No 715/2009 and (EU) 2019/943, and reviewed by the Agency and additional scenarios for network development planning, allowing a robust analysis of the contribution of the project of common interest to the Union energy policy of decarbonisation, market integration, competition, sustainability and security of supply. That analysis can take into consideration indicators and corresponding reference values for the comparison of unit investment costs. Where additional scenarios are used, those should be consistent with the Union’s 2030 targets for energy and climate and its 2050 climate neutrality objective and should be subject to a comprehensive consultation and scrutiny process.
(47)
In an increasingly integrated internal energy market, clear and transparent rules for cost allocation across borders are necessary in order to accelerate investment in cross-border infrastructure and in projects with a cross-border impact. It is essential to ensure a stable financing framework for the development of projects of common interest while minimising the need for financial support, and at the same time to encourage interested investors, with appropriate incentives and financial mechanisms. In deciding on cross-border cost allocation, national regulatory authorities should allocate efficiently incurred investment costs, as relevant in view of their national approaches and methodologies for similar infrastructure, across borders in their entirety and include them in the national tariffs, and, afterwards, if relevant, determine whether their impact on national tariffs could represent a disproportionate burden for consumers in their respective Member States. The national regulatory authorities should avoid the risks of double support for projects by taking into account actual or estimated charges and revenues. Those charges and revenues should be taken into account only in so far as they relate to the projects, and are designed to cover the costs concerned.
(48)
There is a need for cross-border projects that have a positive effect on the Union’s power grid, such as smart electricity grids or electrolysers, without involving a physical common border.
(49)
The internal energy market legislation requires that tariffs for access to networks provide appropriate incentives for investment. However, several types of projects of common interest are likely to have externalities that might not be fully captured in, and recovered through, the regular tariff system. In applying the internal energy market legislation, national regulatory authorities should ensure a stable and predictable regulatory and financial framework with incentives for projects of common interest, including long-term incentives, that are commensurate with the level of specific risk of the project. That framework should apply in particular to cross-border projects, innovative transmission technologies for electricity allowing for the large scale integration of renewable energy, of distributed energy resources or of demand response in interconnected networks, and energy technology and digitalisation projects, which are either likely to incur higher risks than similar projects located within one Member State or which promise higher benefits for the Union. Moreover, projects with high operational expenditure should also have access to appropriate incentives for investment. In particular, offshore grids for renewable energy, which serve the dual functionality of electricity interconnectors and connecting renewable offshore generation projects, are likely to incur higher risks than comparable onshore infrastructure projects, due to their intrinsic connection to generation assets which brings regulatory risks, financing risks such as the need for anticipatory investments, market risks and risks pertaining to the use of new innovative technologies.
(50)
This Regulation should apply only to the granting of permits for projects of common interest, public participation therein and their regulatory treatment. Member States should nevertheless be able to adopt national provisions to apply the same or similar rules to other projects that do not have the status of projects of common interest within the scope of this Regulation. As regards the regulatory incentives, Member States should be able to adopt national provisions to apply the same or similar rules to projects of common interest falling under the category of electricity storage.
(51)
Member States that currently do not attribute the highest possible national significance to energy infrastructure projects as regards the process of permit granting, should be encouraged to consider introducing such a high national significance, in particular by evaluating whether that would lead to a quicker permit granting process.
(52)
Member States that do not currently have in place accelerated or urgent judicial procedures applicable to energy infrastructure projects should be encouraged to consider introducing such procedures, in particular by evaluating whether that would lead to the quicker implementation of such projects.
(53)
Regulation (EU) No 347/2013 has demonstrated the added value of leveraging private funding through significant Union financial assistance to allow the implementation of projects of European significance. In the light of the economic and financial situation and budgetary constraints, targeted support, through grants and financial instruments, should continue under the multiannual financial framework, in order to maximise the benefits to Union citizens and to attract new investors into the energy infrastructure priority corridors and areas set out in an annex to this Regulation, while keeping the budgetary contribution of the Union to a minimum.
(54)
Projects of common interest should be eligible for Union financial assistance for studies and, under certain conditions, for works pursuant to Regulation (EU) 2021/1153 of the European Parliament and of the Council (24) in the form of grants or in the form of innovative financial instruments to ensure that tailor-made support can be provided to those projects of common interest which are not viable under the existing regulatory framework and market conditions. It is important to avoid any distortion of competition, in particular between projects contributing to the achievement of the same Union priority corridor. Such financial assistance should ensure the necessary synergies with the Structural Funds, in order to finance smart energy distribution networks, and with the Union renewable energy financing mechanism established by Commission Implementing Regulation (EU) 2020/1294 (25), pursuant to Article 33(1) of Regulation (EU) 2018/1999 of the European Parliament and of the Council (26).
A three-step logic should apply to investments in projects of common interest. First, the market should have the priority to invest. Second, if investments are not made by the market, regulatory solutions should be explored, the relevant regulatory framework should be adjusted if necessary, and the correct application of the relevant regulatory framework should be ensured. Third, where the first two steps are not sufficient to deliver the necessary investments in projects of common interest, it should be possible to grant Union financial assistance where the project of common interest fulfils the applicable eligibility criteria. Projects of common interest may also be eligible under the InvestEU programme, which is complementary to grant financing.
(55)
The Union should facilitate energy projects in disadvantaged, less connected, peripheral, outermost or isolated regions so as to enable access to the trans-European energy networks in order to accelerate the decarbonisation process and reduce dependency on fossil fuels.
(56)
Where there is no TSO in a Member State, the references to TSOs throughout this Regulation should apply mutatis mutandis to distribution system operators (DSO).
(57)
Grants for works related to projects of mutual interest should be available under the same conditions as for other categories where they contribute to the Union’s overall energy and climate policy objectives and where the decarbonisation objectives of the third country are consistent with the Paris Agreement.
(58)
Regulations (EC) No 715/2009, (EU) 2019/942 (27), and (EU) 2019/943 of the European Parliament and of the Council and Directives 2009/73/EC and (EU) 2019/944 should therefore be amended accordingly.
(59)
Whereas the repurposing of the natural gas infrastructure aims to decarbonise the gas networks, allowing the dedicated use of pure hydrogen, a transitional period could allow for the transport or storage of a predefined blend of hydrogen with natural gas or biomethane. The blending of hydrogen with natural gas or biomethane could be used in the scaling up of the hydrogen production capacity and facilitating the transport of hydrogen. To ensure the transition to hydrogen, the project promoter should demonstrate, including through commercial contracts, how, by the end of the transitional period, the natural gas assets will become dedicated hydrogen assets and how the use of hydrogen will be enhanced during the transitional period. In the context of the monitoring exercise, the Agency should verify the timely transition of the project to a dedicated hydrogen asset. Any financing of those projects pursuant to Regulation (EU) 2021/1153 during the transitional period should be subject to a condition in the grant agreement to repay the financing in the case of a delay of the timely transition of the project to a dedicated hydrogen asset, and to adequate provisions allowing for the enforcement of that condition.
(60)
In line with the European Council conclusions of 4 February 2011 that no Member State should remain isolated from the European gas and electricity networks after 2015 or see its energy security jeopardised by lack of the appropriate connections, this Regulation aims to ensure access to the trans-European energy networks by ending the energy isolation of Cyprus and Malta, that are still not interconnected to the trans-European gas network. That objective should be attained by allowing projects under development or planning that have been granted the status of project of common interest under Regulation (EU) No 347/2013 to maintain their status until Cyprus and Malta are interconnected to the trans-European gas network. Apart from contributing to the development of the renewable energy market, the flexibility and resilience of the energy system, and the security of supply, those projects will ensure access to future energy markets, including hydrogen, and contribute to achieving the Union’s overall energy and climate policy objectives.
(61)
Projects of common interest should not be eligible for Union financial assistance where the project promoters, operators or investors are in one of the situations of exclusion referred to in Article 136 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (28), such as in cases of a conviction for fraud, corruption or conduct related to a criminal organisation. It should be possible to remove a project of common interest from the Union list if its inclusion in that list was based on incorrect information which was a determining factor for that inclusion, or if the project does not comply with Union law. For a project of common interest located in the Member States benefiting from a derogation under this Regulation, those Member States should ensure, when supporting any applications for financing pursuant to Regulation (EU) 2021/1153 for such projects, that the projects do not benefit directly or indirectly persons or entities that are in one of the situation of exclusion as referred to in Article 136 of Regulation (EU, Euratom) 2018/1046.
(62)
In order to ensure the timely development of essential energy infrastructure projects for the Union, the fifth Union list of projects of common interest should remain in force until the first Union list of projects of common interest and projects of mutual interest established pursuant to this Regulation enters into force. Moreover, to enable the development, monitoring and financing of the projects of common interest on the fifth Union list, certain provisions of Regulation (EU) No 347/2013 should also remain in force and produce effects until the entry into force of the first Union list of projects of common interest and projects of mutual interest established pursuant to this Regulation.
(63)
Regulation (EU) No 347/2013 should therefore be repealed.
(64)
In order to ensure that the Union list is limited to projects which contribute the most to the implementation of the strategic energy infrastructure priority corridors and areas set out in an annex to this Regulation, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission to amend the annexes to this Regulation so as to establish and review the Union list, while respecting the right of the Member States to approve projects on the Union list related to their territories. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (29). The Commission, when preparing and drawing up delegated acts, should ensure the simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council. Where they consider this necessary, the European Parliament and the Council may each send experts to meetings of the Commission expert groups dealing with the preparation of delegated acts to which Member States’ experts are invited.
The discussions in the regional groups are instrumental for the Commission to adopt the delegated acts establishing the Union lists. Therefore, it is appropriate, to the extent possible and compatible with the framework of this Regulation, that the European Parliament and the Council be informed about, and may send experts to, the meetings of regional groups in accordance with the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. Taking into account the need to ensure the achievement of the objectives of this Regulation and, in view of the number of projects on Union lists so far, the total number of projects on the Union list should remain manageable, and therefore should not significantly exceed 220.
(65)
Since the objectives of this Regulation, namely the development and interoperability of trans-European energy networks and connection to such networks that contribute to ensuring climate change mitigation, in particular achieving the Union’s 2030 targets for energy and climate and its climate neutrality objective by2050 at the latest, and to ensuring interconnections, energy security, market and system integration, competition that benefits all Member States, and affordable energy prices, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale and effects of the proposed action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives,
