The EU has given Cyprus and Malta, two isolated member states, until December 31, 2029, to directly connect to the trans-European gas network.

To this end, the EU has granted an exemption by classifying their energy projects as Projects of Common Interest (PCI).

In January 2022, the European Commission approved €657 million in funding for the connection between Greece and Cyprus, with a total project budget of €2.5 billion.

The rationale for approving the project is that the undersea electric transmission cable will enable these countries to leverage opportunities in green development, contributing to environmental protection.

According to the relevant European regulation, "an interconnection for each of these member states retains the status of a project of common interest, with all related rights and obligations."

However, it is emphasized that the exemption is maintained when the interconnection:

1. Is in the development or planning stage as of June 23, 2022.

2. Has been granted project of common interest status under Regulation (EU) No 347/2013.

3. Is necessary to ensure the permanent connection of the said member states to the trans-European natural gas network.

It is noted that "these projects ensure future capacity access to new energy markets, including hydrogen."

According to the relevant regulation, project implementers—such as the Transmission System Operator in Cyprus—must provide sufficient evidence on how the interconnections will facilitate access to new energy markets, including hydrogen, in line with the Union’s overall energy and climate policy objectives.

Specifically, this evidence includes:

• Assessment of supply and demand for renewable or low-carbon hydrogen.

• Calculation of the reduction in greenhouse gas emissions enabled by the project.

The European Commission will regularly verify the assessment, calculations, and timely implementation of the project.

In addition to the specific criteria for EU financial assistance, "the interconnections should be designed to ensure access to future energy markets, including hydrogen, and should not lead to extending the lifespan of gas-related assets." They should also ensure the functionality of neighboring networks at a cross-border level.

Eligibility for EU financial assistance expires on December 31, 2027.

Each request for EU financial assistance for such works must demonstrate the objective of converting the asset into a dedicated hydrogen asset by 2036, if market conditions permit, through a roadmap with a precise timeline.

The exemption is valid until Cyprus or Malta connects directly to the trans-European gas network or until December 31, 2029, whichever is earlier.