Europe Agreed not to Finance New Oil and Gas Projects

Europe Agreed not to Finance New Oil and Gas Projects News

European Union countries have agreed on the need to stop financing new cross-border oil and gas projects from the Union budget, the EU Council said in a statement.

The energy ministers of the union states met Friday. They “reached a common approach to revising the Trans-European Energy Networks (TEN-E) regulations,” the release said.

“The goal of the revised TEN-E rules is to modernize, decarbonize and interconnect the EU’s cross-border energy infrastructure to help the union meet its climate neutrality goals by 2050,” the release said.

TEN-E rules determine which projects can be financed with EU funds. The EU is currently reviewing the categories of infrastructure eligible for such support. Earlier EC put forward its proposals, the Council has agreed on its position, but negotiations with the European Parliament on the final text of the amendments, which will go to the final approval of the Union and the EP deputies, are still pending.

The European Commission proposed in principle not to finance cross-border oil and gas projects from the EU budget via the TEN-E mechanism. The Council generally agreed, but proposed some exceptions.

“The Council decided in its position to stop supporting new gas and oil projects,” the release said.

However, for example, it would be possible to fund those gas projects that would involve a full transition to hydrogen pumping by the end of 2029.

“During the transition period through Dec. 31, 2029, certain hydrogen assets converted from (natural gas assets – ed.) may be used to transport or store a predetermined mixture of hydrogen with natural gas or biomethane,” the release said.

Projects that can be allocated budget funding will need to demonstrate how the assets will cease to be natural gas assets and become specialized hydrogen assets by the end of this transition period, the release said.

Projects related to Malta and Cyprus may also be an exception.

“In the case of Cyprus and Malta, which are still not connected to the Trans-European Gas Network, projects in the planning and establishment phase (which have previously been given the opportunity to receive EU funding – ed.) … will retain their status until the connection is completed,” the release said.