EU countries agree to prolong gas project funding, with caveats

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A large European Union flag lies at the centre of Schuman square, outside the European Commission headquarters, on the eve of Europe Day, commemorating the declaration made by Robert Schuman in 1950, in Brussels, Belgium, May 8, 2021. REUTERS/Yves Herman//File Photo

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BRUSSELS, June 11 (Reuters) - European Union energy ministers on Friday agreed to prolong EU support for some cross-border natural gas projects, despite a push from 11 countries and the European Commission who said such funding should end to comply with climate change goals.

The EU's "TEN-E" rules define which cross-border energy projects can be labelled Projects of Common Interest (PCI), giving them access to certain EU funds and fast-tracked permits.

The EU is upgrading the rules to comply with its climate change targets, and in December the European Commission proposed a new version excluding dedicated oil and gas infrastructure. read more

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Energy ministers from EU countries on Friday agreed their position on the rules, which they must negotiate with European Parliament.

Ministers agreed that while new dedicated gas and oil projects should generally not receive support, projects in the island countries of Malta and Cyprus with PCI status should retain it until those countries are fully connected to the European gas network.

That could help ensure the completion of Greece, Cyprus and Israel's Eastmed pipeline to supply Europe with gas from the eastern Mediterranean.

They also said that until 2028, support could go to converting gas pipelines to carry hydrogen, and those projects could continue to carry natural gas blended with hydrogen until 2030.

Those projects should demonstrate how they will shift to carry hydrogen only by the end of this period, the EU council, which represents member states, said in a statement.

"The purpose is to gradually decarbonise this sector and increase the share of renewable gases in the pipelines," the statement said,

Germany, Spain, Austria and Luxembourg did not support the agreement.

Those countries, plus others including Denmark and the Netherlands, had called ahead of the meeting for rules to exclude fossil fuels, including gas. read more

They had said the TEN-E policy will be a "litmus test" of the EU's commitment to eliminate its net emissions by 2050.

Other states, including the Czech Republic and Slovakia, had wanted gas blending to be allowed until 2035.

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Reporting by Kate Abnett; Editing by Angus MacSwan

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