EU Countries Meet to Tussle Over Gas Project Funding

BRUSSELS (Reuters) — European Union energy ministers meet in Luxembourg on Friday to debate prolonging EU support for some cross-border natural gas projects, despite the European Commission saying such funding should end to meet 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.

EU energy commissioner Kadri Simson said on Friday she hoped the rules would remove support for fossil fuel projects.

Energy ministers from EU countries will on Friday attempt to agree their position. They must negotiate the final rules with European Parliament.

A proposal for the member states' position, drafted by Portugal and seen by Reuters, would prolong funding for some gas projects.

That has divided the 27 countries, with 11 countries including Germany, Denmark, the Netherlands calling for rules that exclude fossil fuels, including gas.

The TEN-E policy will be a "litmus test" of the EU's pledge to eliminate its net emissions by 2050, those countries said in a paper previously reported by Reuters.

Portugal's proposal said that until 2030 investments to retrofit gas pipelines to carry hydrogen should be allowed to carry natural gas blended with hydrogen.

"This solution enables member states using more polluting energy sources to lower their carbon dioxide emissions, and the gradual injection of renewable gases into the grid," Portugal said in a document shared with countries ahead of Friday's meeting.

It also said 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.

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