Cross-Border Hydrogen Trade Legal Frameworks

1. Introduction

Cross-border hydrogen trade means the movement and commercial supply of hydrogen from one country to another through pipelines, ships, terminals or other transport infrastructure. As hydrogen becomes important for decarbonising industries such as steel, chemicals, shipping and heavy transport, countries are developing legal frameworks for international hydrogen markets.

The legal framework is more complicated than ordinary energy trade because hydrogen can be produced in different ways. For example, renewable hydrogen may be produced using renewable electricity, while low-carbon hydrogen may be produced from natural gas with carbon capture. Therefore, rules are needed to determine its origin, carbon intensity, quality, transportation and eligibility for government support.

The EU's 2024 hydrogen legislation expressly aims to create an integrated hydrogen market and facilitate unhindered cross-border hydrogen flows. (Eur-Lex)

2. EU Hydrogen Legal Framework

The central EU instruments are Directive (EU) 2024/1788 and Regulation (EU) 2024/1789.

Directive 2024/1788 establishes common rules for the transport, supply and storage of hydrogen, including access to hydrogen networks and the development of an interconnected EU hydrogen system. (Eur-Lex)

Regulation 2024/1789 provides complementary rules concerning hydrogen-network development and the functioning of the internal market. (Eur-Lex)

Together, these instruments create a legal foundation for a future European hydrogen market.

3. Cross-Border Hydrogen Infrastructure

Hydrogen may cross borders through dedicated pipelines or other infrastructure.

The Directive specifically defines a hydrogen interconnector as a hydrogen network crossing or spanning a border between Member States, or connecting a Member State with a third country. (Eur-Lex)

This creates legal questions concerning:

construction permissions;

environmental approval;

network ownership;

third-party access;

tariffs;

safety;

hydrogen quality;

capacity allocation; and

cross-border regulatory cooperation.

For hydrogen infrastructure connected to a third country, Article 53 of Directive 2024/1788 provides for international agreements where necessary to ensure consistency between the rules applying to the interconnector and EU hydrogen-network rules. (Eur-Lex)

4. Third-Party Access

A major principle of the EU framework is third-party access.

Article 35 of Directive 2024/1788 provides for regulated third-party access to hydrogen networks based on published tariffs that are applied objectively and without discrimination. Until the end of 2032, Member States may use negotiated third-party access under specified conditions. (Eur-Lex)

This is important because an infrastructure owner should not automatically be able to exclude competing hydrogen producers or suppliers from using a cross-border network.

The objective is to create a competitive market rather than a system controlled by a small number of infrastructure owners.

5. Hydrogen Quality and Certification

Another major legal challenge is determining what type of hydrogen is being traded.

Cross-border trade may require rules concerning:

renewable hydrogen;

low-carbon hydrogen;

greenhouse-gas emissions;

sustainability;

production method;

chain of custody; and

guarantees or certification of origin.

Without common standards, a country could classify hydrogen as “green” while another country uses different criteria.

Therefore, certification and traceability are essential for cross-border hydrogen markets.

6. Tariffs and Market Access

Cross-border hydrogen transport also requires rules on network tariffs.

If Country A produces hydrogen and sends it through Country B to Country C, several questions arise:

Who pays the transmission charge?

Which regulator approves the tariff?

Can the network operator discriminate between users?

How is cross-border capacity allocated?

The EU framework gives national regulatory authorities powers concerning hydrogen-network tariffs and their methodologies and requires cooperation on cross-border issues. (Eur-Lex)

7. Third-Country Trade

International hydrogen trade will increasingly involve countries outside the EU.

For example, hydrogen could potentially be produced in North Africa or another neighbouring region and transported into Europe.

Article 53 of Directive 2024/1788 recognises this issue and provides a framework for international agreements governing hydrogen interconnectors between EU Member States and third countries. (Eur-Lex)

This creates a multi-level governance structure:

International agreement
↓
EU hydrogen legislation
↓
National hydrogen law
↓
Regulator
↓
Network operator
↓
Hydrogen producer/supplier

8. Competition and Non-Discrimination

Cross-border hydrogen markets also require competition rules.

Directive 2024/1788 requires Member States to avoid undue barriers to cross-border hydrogen trade and requires transparent, proportionate and non-discriminatory treatment concerning network connection, market access and other relevant matters. (Eur-Lex)

This becomes particularly important where existing energy companies own both hydrogen production facilities and hydrogen infrastructure.

Competition law may therefore interact with energy regulation to prevent discriminatory access or exclusionary behaviour.

9. Relevant Case Laws

Because dedicated hydrogen markets are relatively new, there is currently limited EU case law dealing directly with cross-border hydrogen trading. Therefore, older gas and electricity cases are important for understanding the legal principles that are likely to influence hydrogen regulation.

Federutility and Others, Case C-265/08

The CJEU considered State intervention in the natural-gas market and the conditions under which governments may regulate energy prices.

Relevance: The case is useful for hydrogen because it demonstrates that State intervention in energy markets must operate within the principles of necessity and proportionality.

VEMW and Others, Case C-17/03

This case concerned preferential access to cross-border electricity transmission capacity.

The Court considered whether national arrangements could give certain electricity traders preferential access to cross-border transmission capacity.

Relevance: The principle of non-discriminatory access to cross-border energy infrastructure is highly relevant to future hydrogen pipelines and interconnectors.

Commission v Spain, Case C-400/08

The case concerned restrictions affecting access to the Spanish gas market.

Relevance: It demonstrates the importance of removing unjustified barriers to entry and maintaining effective competition in interconnected energy markets.

These cases do not directly establish hydrogen law, but they provide important legal principles concerning energy-market access, infrastructure regulation, competition and cross-border trade.

10. Major Legal Challenges

The future hydrogen market faces several legal challenges:

Different National Rules

Different countries may establish different definitions and certification requirements.

Infrastructure Regulation

New hydrogen pipelines require substantial investment and clear rules on ownership, access and tariffs.

Cross-Border Certification

A certification system must allow importing countries to verify how hydrogen was produced.

Third-Country Relations

International agreements will be necessary where hydrogen infrastructure connects EU territory with non-EU countries.

Regulatory Coordination

National regulators must cooperate with each other and with ACER on cross-border matters. Directive 2024/1788 specifically requires such cooperation. (Eur-Lex)

11. Conclusion

Cross-border hydrogen trade requires a legal framework covering production standards, certification, transport, infrastructure access, tariffs, safety, environmental requirements, competition and international cooperation.

The EU's Directive 2024/1788 and Regulation 2024/1789 represent an important move toward a dedicated hydrogen market. The Directive specifically seeks to facilitate cross-border hydrogen flows and establishes rules for hydrogen networks and interconnectors. (Eur-Lex)

For PhD-level energy law, the key issue is that hydrogen regulation is developing from traditional gas-law principles toward a new integrated legal regime combining energy law, climate law, infrastructure regulation, competition law and international trade law.