Bundesrat adopts draft legislation amending the LNG Acceleration Act

The Bundesrat has adopted the revised Act to Accelerate the Use of Liquefied Natural Gas (LNG Acceleration Act) to include forward-looking rules on energy supply and specify practical provisions on the sustainable, climate-neutral retrofitting of LNG terminals.

Federal Minister for Economic Affairs and Climate Action Robert Habeck said: "We are pursuing two goals by amending the LNG Acceleration Act. Firstly, the amendment substantially contributes to securing the energy supply, not least in the coming winter. At the same time, proof of ‘green readiness’ needs to be provided for land-based LNG terminals during the authorisation procedure. This is to ensure that investments are made in a sustainable manner and that investors will be able to convert the facilities from LNG to hydrogen."

The previous version of the LNG Acceleration Act had already contained a provision that the operation of terminals with liquefied natural gas (LNG) can be authorised only until 31 December 2043 and that the subsequent operation will be permitted only for climate-neutral hydrogen and its derivatives. The new requirements ensure that the subsequent use of these terminals for hydrogen and its derivatives is enshrined in the legislation on authorisations.

The goal is to ensure the continued use of this permanent LNG infrastructure by providing for a climate-neutral alternative early on, at the latest by the 31 December 2043 deadline, for the relevant approval. To this end, components of facilities which cannot be retrofitted at all or only at disproportionately high costs need to be designed from the outset to make sure that they can also be used for the operation on the basis of hydrogen and its derivatives. Proof already needs to be provided during the authorisation procedure for the LNG terminal. This is to avoid "stranded investments" and support the establishment of a forward-looking hydrogen infrastructure.

The revised Act also includes important provisions to further ensure the feed-in of liquefied natural gas at the sites on the German coast and to further step up preparatory measures. To this end, the annex to the Act comprising the list of project sites has been updated. As Germany will continue to need gas for a secure supply of energy, Mukran has been added to the Act’s project list. The intention is to move the FSRU currently based in the port of Lubmin across to Mukran, a designated commercial and industrial zone, so that there will still be an FSRU on the Baltic coast. Following an intensive assessment and evaluation process, this site is considered preferable to other alternatives. Applicable standards of substantive law will, however, not be lowered. This means that especially the requirements pursuant to environmental, nature conservation and water legislation remain in force and are taken into account by the authorities at Länder level during the authorisation procedure.

Prior to the Bundesrat’s approval, the Bundestag had adopted the amended Federal Government’s draft legislation. It has been expressly stipulated that FSRUs will be replaced by permanent land-based LNG terminals as soon as their operation is secured. This means that the shift from FSRUs to land-based terminals is now anchored in the legislation. At the same time, whilst operators of land-based LNG terminals currently need to show that they can operate on the basis of ammonia, it is clarified that from 2035 they can apply to operate using hydrogen or another hydrogen derivative.

Furthermore, a provision to facilitate the designation of land for use by wind energy by municipalities has been included in the Act to implement the decisions taken by the coalition committee. This provision will enter into force six months after its announcement, taking account of the requirements set out in Article 72 paragraph 3 sentence 2 of the Basic Law.

After the adoption by the Bundesrat, the revised LNG Acceleration Act can enter into force next week.