Portugal draft proposal allows methane gas pipelines to receive EU funding until 2030

The draft text, seen by Climate Home News, waters down proposals made by the EU Commission last year – a move campaigners say would lock in fossil fuel infrastructure

The European gas pipeline will carry Russian gas to Germany and the Czech Republic (Photo: Paul Langrock/GreenPeace)

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The European Union could continue funding methane gas pipelines and gas-made hydrogen until 2030 under a draft proposal put forward by European Council chair Portugal and seen by Climate Home News. 

The review of regulations known as Ten-E was supposed to align the EU’s energy infrastructure funding rules with the bloc’s increased climate ambition.

But the draft proposal presented by Portugal, which forms the basis for discussions between member states, introduced loopholes for methane gas pipelines to continue to receive funding until the end of the decade.

The draft text waters down an earlier proposal made by the European Commission, which ruled out methane gas projects as eligible for funding.

Campaigners have denounced the plans to use methane gas as a bridge fuel in the energy transition. E3G analyst Elisa Giannelli said the International Energy Agency’s recent net zero scenario “clarified once for all that gas cannot be considered a ‘transition fuel’ as gas consumption globally is expected to peak by 2025.”

She added: “The TEN-E regulation is a stress test for Europe’s credibility on its climate neutrality commitments”.

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Tara Connolly, gas campaigner at Global Witness, said Portugal was trying to “satisf[y] the lowest common denominators, in order to get a deal at any cost”.

“Make no mistake this is absolutely a failure on behalf of the Portuguese presidency to reach a progressive deal with member states that is fit for the climate emergency the world is facing,” she said.

The Ten-E regulations were introduced in 2013 to enable EU member states to work together on cross-border energy projects.

In 2020, the European Commission ordered a review of the rules to reduce support for fossil fuel infrastructure like oil and gas pipelines and shift funding to electricity grids, wind power and hydrogen infrastructure.

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In December 2020, the European Commission outlined its proposal which included making methane gas projects ineligible, except for methane gas-produced hydrogen.

The European Council, which represents member states and is currently chaired by Portugal, met in early May to discuss its position.

Eleven member states, mainly in Western Europe, signed a declaration calling for fossil fuels to be excluded. However, nine countries, mainly in Eastern Europe, signed a joint statement arguing that gas projects which have already entered the permit granting process should continue to be eligible for funding until 2030 “since all these projects contribute to the energy transition towards climate neutrality”.

France did not sign either statement. It has succesfully sought several Eastern European leaders’ support for pro-nuclear EU policies, leading campaigners to suspect a tit-for-tat deal has been agreed between France and Czech Republic, Hungary, Poland, Romania and Slovakia.

Portugal’s proposal says Malta’s Melita and Cyprus’s EastMed gas pipelines should continue to be eligible for support so that both islands can be connected to Europe’s gas network.

The draft text also allows gas pipelines to be modified to transport both hydrogen as well as methane gas — a process known as “blending retrofit”, which was ruled out by the Commission. Hydrogen produced either from renewables or fossil fuels are considered under the proposal.

Campaigners argue such retrofits are a waste of public money and an attempt to prolong the life of methane gas pipelines.

Connolly told Climate Home News that blending expensive hydrogen into methane gas was like mixing champagne and water. She added that gas pipelines were not usually in the same place where hydrogen pipelines are needed.

The proposals will be to discussed by energy ministers on 11 June.

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